Cipla Ltd. v. CCE - Taxpublishers.in

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The Tax Publishers2020 TaxPub(EX) 36

CENVAT CREDIT RULES, 2004

Rule 14

Where assessee was manufacturing not only excisable goods, but also non-excisable goods but availed of the Cenvat credit for the entire inputs required to be used for not only excisable goods, but also for non-excisable goods at the threshold and did not reverse the Cenvat credit taken by it, Rule 14 of the Cenvat Credit Rules, thus, was clearly attracted to the facts of this case during the relevant financial years which were subject-matter of this proceeding and it was liable to pay interest under rule 14.

Cenvat credit - Allowability of - Assessee not reversed the Cenvat credit taken by it -

Issue arose for consideration as to whether, under the facts and circumstances, Tribunal was correct and justified in confirming the demand of interest on CENVAT credit alleged to be incorrectly taken, but admittedly not utilized in terms of the provisions of rule 14. Held:Assessee was fully aware that it was manufacturing not only excisable goods, but also non-excisable goods but availed of the Cenvat credit for the entire inputs required to be used for not only excisable goods, but also for non-excisable goods at the threshold and did not reverse the Cenvat credit taken by it, though it had used the inputs also for non-excisable goods. Rule 14 of the Cenvat Credit Rules, thus, was clearly attracted to the facts of this case during the relevant financial years which were subject-matter of this proceeding. Even if assessee had not utilized such Cenvat credit, ultimately, since assessee had admittedly availed of Cenvat credit on the entire inputs knowingly well that the entire inputs would not be used exclusively for excisable goods, it was liable to pay interest under rule 14.

REFERRED : UOI & Ors. v. Ind-Swift Laboratories Ltd. 2011 (265) E.L.T. 3 (SC) : 2011 TaxPub(EX) 347 (SC), Commissioner of Central Excise, Mumbai- I v. M/s. Bombay Dyeing & Mfg. Co. Ltd. 2007 (215) E.L.T. 3 (S.C.) : 2007 TaxPub(EX) 1928 (SC), Finolex Industries Limited v. The Commissioner of Central Excise [Central Excise Appeal No. 70 of 2018, dt. 23-10-2018], Hindutan Petroleum Corpn. Ltd. v. The Commissioner of CGST & Central Excise, Navi Mumbai Commissionerate [Central Excise Appeal No.78 of 2018, dt. 15-10-2018], The Commissioner of Central Excise, Pune-I v. M/s. GL & V. India (P) Ltd. 2105 (321) ELT 611 (Bom) : 2015 TaxPub(EX) 1428 (Bom), The Commissioner of Central Excise, Madurai v. M/s. Strategic Engineering (P) Ltd. 2014 (310) ELT 509 (SC) : 2014 TaxPub(EX) 2026 (SC),

FAVOUR : Against the assessee

A.Y. :

IN THE BOMBAY HIGH COURT