Custom, Excise & Service Tax Tribunal
Ultra Tech Cement Ltd vs Commissioner Of Central Excise ... on 28 May, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order . 20930 / 2014 Application(s) Involved: E/Stay/26877/2013 in E/26534/2013-DB Appeal(s) Involved: E/26534/2013-DB [Arising out of order-in-appeal No. 38-2013 dated 06/02/2013 passed by Commissioner of Central Excise (Appeal-1) , BANGALORE] Ultra Tech Cement Ltd Village Veerapura DODDABALLAPUR, - 561203 KARNATAKA Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax BANGALORE-I NULL POST BOX NO 5400...CR BUILDINGS, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Mr. G. Shivadas, Adv. For the Appellant Mr. Ganesh Haavanur,A.R. For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 28/05/2014 Date of Decision: 28/05/2014 Order Per : B.S.V.MURTHY The factory of Samruddhi Cement Limited which was earlier known as Grasim Industries Ltd., Unit: Birla super Bulk Terminal, leased a factory to M/s Ultratech Cement Ltd. with effect from 01.02.2010. The appellants in their letter dated 01.02.2010 submitted a list containing inputs (as such or contained in process or in finished goods) and inputs in transit as well as capital goods lying in the factory as on the date of leasing out. The appellants also submitted details of balance 50% of CENVAT credit of capital goods still unutilized by them as on the date from which the factory was leased out. In the same letter they also gave details of unutilized credit which would get transferred to M/s Ultratech Cement Ltd. under Rule 10 of CENVAT Credit Rules 2004. Appellants also issued an invoice for all these goods and paid VAT on the same.
2. Taking a view that because the appellants had raised invoice and sold the goods, the CENVAT credit should have been reversed, proceedings were initiated. An amount of Rs. 21,90,655/- with interest has been demanded being the CENVAT credit and penalty equal to this amount has been imposed.
3. The learned counsel on behalf of the appellant submits that the appellants had issued tax invoice only for payment of VAT and mere issuance of tax invoice will not create liability to reverse the credit. Rule 3(5) of CENVAT Credit Rules 2004 is applicable only in situations where there is a physical removal of inputs or capital goods from the factory of the manufacturer. In the present case, it is only a case of leasing out of the inputs and capital goods and no removal has taken place and therefore provisions of Rule 3(5) are not applicable. The credit transferred by the appellant is to the balance 50% of the credit pertaining to capital goods procured by the appellant during 2009-10 and the unutilized credit can be transferred subject to utilization in the subsequent year. The learned counsel relied upon the decision in the case of Dalmia Cements Bharat Ltd. Vs CCE Tiruchirapalli [2008(224)ELT484 (Tri-Che)] to submit that in the case of leasing out of the factory to another company, no liability arises to reverse CENVAT credit since there was no physical removal of such goods. On going through the decision, we find that the same is applicable to the facts of this case.
4. We enquired with the learned A.R. whether he has any contrary decision to the decision cited by the learned counsel and he replied in the negative. We also find that the issue involved lies within a very narrow compass as discussed above and therefore with the consent of both sides, we decide to allow the appeal itself since no more further consideration of the facts or law is required. Accordingly the impugned order is set aside and appeal is allowed with consequential relief if any to the appellant.
(Operative portion of the order has been pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER Pnr...
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