THE COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT 1775 Vs. INTERNATIONAL FLAVOURS & FRAGRANCE LTD.

JUDGEMENT

(1.) AGGRIEVED by the order passed by the Tribunal in allowing the appeal filed by the assessee, the Revenue/appellant is before this Court by filing the present appeal. This Court, vide order dated 2.3.2012, while admitting the appeal, framed the following substantial questions of law for consideration : -

(2.) THE respondent is engaged in the manufacture of flavours and fragrances falling under Chapter 29, 32 and 33 of the 1 st Schedule to the Central Excise Tariff Act, 1985. The respondent availed credit of duty paid on inputs utilised in the manufacturing unit. As the inputs have limited shelf life, they were periodically reviewed and the expired inputs are destroyed. For the destroyed inputs, which were not used, the respondent is liable for reversal of credit availed. Accordingly, the respondent reversed the credit of Rs. 2,29,160/ - in respect of inputs destroyed during the years 2006 and 2007. In view of the delay in reversal of the credit, the respondents were liable to pay interest in terms of Rule 14 of the CENVAT Credit Rules, 2004. Accordingly, a show cause notice was issued asking why interest to the tune of Rs. 36,795/ - should not be levied in terms of Rule 14 of the CENVAT Credit Rules. After adjudication, the adjudicating authority passed the order dated 22.12.2008 confirming the demand of interest and imposing penalty equivalent to the credit reversed under Rule 15 of the CENVAT Credit Rules, 2004.

(3.) AGAINST the said order, the respondent/assessee preferred appeal to the Tribunal. The Tribunal, on considering the facts of the case, relying on the decision in the case of Maruti Udyog Ltd. (2007, (214) ELT 173 (P&H)) and Ind -Swift Laboratories Ltd. (2009, (240) ELT 328 (P&H)), allowed the appeal filed by the assessee, against which the appellant/Department has preferred the present appeal.