Order Date – 16 February 2023

Parties: Mahindra & Mahindra Ltd Vs Commissioner of Central Excise

Facts –

• The Appellant, Mahindra & Mahindra Ltd, at Kandivali with their corporate office at Worli distributing credit of services procured in common for all three factories, and the credit is limited to in proportion to the sales of each of the units.
• It was alleged that during 2007-08 to 2012-13, disallowed credit availed by them pertaining to credit attributable to the other two factories in proportion to production that should, have been excluded from the pool available for distribution.

Issue –

• Whether the credit attributable to the other two factories are allowed?

Order –

• The Tribunal observed that the decision of re Fosroc Chemicals India Pvt Ltd was also about a dispute in which the ‘other cess’ on the output of the units, entitled to the same ‘area based exemption’, was to be computed on the basic excise duty which was exempted.
• The distinction of ‘automobile cess’, in so far as not being a levy under Central Excise Act, 1944 and not levied on basic excise duty, with ‘other cess’, that are exempted owing to exemption of basic excise duty in the decision of the Hon’ble High Court of Bombay, makes the position abundantly clear.
• Nothing further survives in the finding of the adjudicating authority in the impugned order as the discharge of ‘automobile cess’ effaces coverage of rule 6 of CENVAT Credit Rules s, 2004 to the output of the Rudrapur and Haridwar factories. Consequently, the appeal allowed.