Commissioner Central Goods And Service Tax vs. M/S Hamdard (Wakf ) Laboratories

Facts

The Commissioner of Central Goods and Service Tax filed two appeals before the High Court challenging a common order of the Tribunal dated November 5, 2021. The appeals concern tax periods mentioned in the Tribunal's order. The core dispute revolves around the reversal of CENVAT credit. The revenue sought to reverse credit on raw materials used in the manufacture of both exempted and non-exempted goods. The respondent-assessee maintained separate accounts for raw materials, except for furnace oil, which was a common input used for generating steam and thus for both exempted and non-exempted goods. The controversy specifically relates to the reversal of CENVAT credit for this common input, furnace oil, when used in the manufacture of exempted goods. The total demand confirmed by the adjudicating authority was Rs. 12,79,85,170/-.

Held

The High Court held that there was no error of law in the impugned order of the Tribunal. The Court found that the Tribunal's order was based on findings of fact. Consequently, the Court concluded that no substantial question of law was involved in the present appeals. The appeals were dismissed on the grounds that the Tribunal's decision was factually sound and legally unassailable. The Court did not delve into the specifics of the CENVAT credit reversal or the application of any particular section or rule, as its decision was based on the absence of a substantial question of law. The operative direction was the dismissal of the appeals.

Key Issues

1. Whether the Tribunal erred in law by upholding the respondent-assessee's claim to retain CENVAT credit on furnace oil, a common input used in the manufacture of both exempted and non-exempted goods, despite its use in exempted goods? Petitioner's Argument: The Commissioner of Central Goods and Service Tax argued that CENVAT credit should be reversed for common inputs used in exempted goods. The appeals were filed against the Tribunal's order which, according to the appellant, contained an error of law. Respondent's Argument: The respondent-assessee contended that they maintained separate accounts for raw materials, except for furnace oil. The Tribunal's order, which is under challenge, appears to have accepted the respondent's position regarding the treatment of furnace oil. The judgment does not explicitly record arguments made by the respondent, but implies their position was upheld by the Tribunal.