Customs, Excise and Gold Tribunal - Bangalore
Sri Sarvaraya Sugars Ltd. vs The Commissioner Of Central Excise And ... on 12 October, 2006
Equivalent citations: 2007(116)ECC38, 2007ECR38(TRI.-BANGALORE)
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against the OIO 20/2005 dated 22.11.2005 passed by the Commissioner of Central Excise & Customs, Visakhapatnam.
2. In the impugned order, the Commissioner has demanded a sum of Rs. 1,91,73,507/- being the credit irregularly taken on Molasses used in the manufacture of Rectified Spirit which was chargeable to Nil rate of duty during the period from 1.11.2000 to 28.02.2002 under the provisions of Rule 57AH(1) of the Central Excise Rules, 1944/Rule 12 of the Cenvat Credit Rules, 2001/2002 read with Section 11A of the Central Excise Act, 1944. The contention of the appellant is that Molasses is used for the manufacture of De-natured spirit and rectified spirit in the composite factory having sugar and distillery division. The appellant has reversed 8% of the sale value of the rectified spirit, as the duty is Nil under GET. The appellant contends that having reversed 8% of the credit attributable to exempted/Nil duty product (rectified spirit), credit on Molasses cannot be denied.
3. S/Shri K.S. Ravi Shankar and N. Anand, the learned Advocates, appeared for the appellants and Shri K. Sambi Reddy, the learned JDR, for the Revenue.
4. The learned Advocates pointed out that on the same issue, there was an earlier adjudication OIO No. 1/2002 dated 30.01.2002 and the Deputy Commissioner dropped the demand. The above OIO was appealed by the Revenue but the Commissioner (Appeals) dismissed the same upholding entitlement of the appellant to modvat credit on Molasses used for discharging duty on de-natured spirit after reversing 8% of the sale price of rectified spirits. The above OIA was not carried in appeal by the Revenue before the Tribunal and has attained finality. The department, having accepted the principles laid down in their own case earlier decided, cannot be permitted to take a contra stand in subsequent cases, as held by the Apex Court in para 7 in the case of Jayaswals NECO Ltd. v. CCE, Nagpur 2006 (195) ELT 142(SC). Further, the learned Advocates urged that the issue is no longer res integra as the same has been settled in the following decisions:
(i) CCE, Madurai v. Dharani Sugars & Chemicals Ltd. 2005 (191) ELT 469(Tri-Chennai)
(ii) Kumbhi Kasari SSK Ltd. v. CCE, Pune-II
(iii) Godavari Sugar Mills Ltd. v. CCE, Belgaum 2006 (196) ELT 74(T-Bang.)
(iv) Kothari Sugar & Chemicals Ltd. v. CCE, Trichy 2005 (191) ELT 448(Tri-Chennai) Board's Circular No. 615/6/2002-CX dated 4.2.2002 clarifies that if a composite unit manufactures sugar, molasses and Ethyl Alcohol and procures molasses from outside which are duty paid, credit of duty paid on molasses would be available to pay duty on any finished product manufactured in the same factory. This Circular has been twisted by the Respondent by mis-applying the wrong paragraph instead of para 2(b). This circular is binding on the Revenue as held by the Hon'ble Supreme Court in CCE v. Dhiren Chemicals Industries . During the hearing, the learned Advocates produced the decision of the Hon'ble Apex Court in the case of CCE, Navi Mumbai v. Amar Bitumen & Allied Products Pvt. Ltd. 2006 (202) ELT 213(SC) wherein it is held that when the earlier order of the Tribunal on the same issue is not appealed against by Revenue and has reached finality, appeal against subsequent order on the same question is not maintainable. He said that the ratio of the above decision is squarely applicable to the present case.
5. We have gone through the records of the case carefully. It is seen that the same issue was the subject matter of adjudication earlier and both the lower authorities viz. the Deputy Commissioner and the Commissioner (A) have decided the issue in favour of the appellants. The decision of the Commissioner (Appeals) has not been appealed against by the Revenue. Therefore, the same has become final. Moreover, the appellants have produced Tribunal decisions in their favour. Since the earlier orders on the same issue have attained finality, we hold that the department cannot take a different stand now. In this connection, we would like to reproduce the observations of the Apex Court in the case of CCE v. Amar Bitumen (cited supra).
6. This Court in a catena of cases has consistently taken the view that if an earlier order is not appealed against by the Revenue and the same has attained finality, then it is not open to the Revenue to accept judgment/order on the same question in the case of one assesses and question its correctness in the case of some other assessees. The revenue cannot pick and choose. [See: Union of India and Ors. v. Kaumudini Narayan Dalai and Anr. 2001 (10) SCC 231; Collector of Central Excise, Pune v. Tata Engineering & Locomotives Co. Ltd. ; Birla Corporation Ltd. v. Commissioner of Central Excise 2005 (186) ELT 266(SC); Jayaswals Neco Ltd. v. Commissioner of Central Excise, Nagpur 2006 (195) ELT 142(SC), etc.
7. It was held in Birla Corporation Ltd. (supra) as under:
In the instant case, the same question arises for consideration and the facts are almost identical. We cannot permit the Revenue to take a different stand in this case. The earlier appeal involving identical issue was not pressed and was, therefore, dismissed. The respondent having taken a conscious decision to accept the principles laid down in Pepsico India Holdings Ltd cannot be permitted to take the opposite stand in this case. If we were to permit them to do so, the law will be in a state of confusion and will place the authorities as well as the assessees in a quandary.
8. Accordingly, we affirm the finding recorded by the Tribunal to the effect that the article under consideration would be classifiable under Chapter Heading 59.09 and the assessee would be entitled to the exemption from payment of excise duty under the notifications in question.
6. Following the ratio of the above decision, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)