Custom, Excise & Service Tax Tribunal
M/S Essar Oil Ltd vs Commissioners Of Central Excise on 18 October, 2016
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : E/1560/2010 (Arising out of OIA-327/2010/COMMR-A-/CMC/RAJ dated 21/07/2010 passed by Commissioner (Appeals) of Central Excise, Customs and Service Tax-RAJKOT) M/s Essar Oil Ltd : Appellant (s) Versus Commissioners of Central Excise, Customs and Service Tax-RAJKOT : Respondent (s)
Represented by:
For Appellant (s) : Shri P. K. Shetty, Advocate For Respondent (s): Shri J. Nagori, Authorised Representative For approval and signature :
Dr. D. M. Misra, Hon'ble Member (Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No
2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of the order?
Seen
4. Whether order is to be circulated to the Departmental authorities?
Yes CORAM :
Dr. D. M. Misra, Hon'ble Member (Judicial) Date of Hearing / Decision : 18.10.2016 ORDER No. A/11168 / 2016 dated 18.10.2016 Per : Dr. D. M. Misra This is an appeal filed by the appellant against OIA No. 327/2010/COMMR(A)/CMC/RAJ dated 21.07.2010 passed by the Commissioner (Appeals) of Central Excise, Rajkot.
2. Briefly stated the facts of the case are that the appellant had filed refund claim for Rs. 36,30,917/- claiming that the CENVAT credit amount had been wrongly reversed by them during the period from May, 2007 to April, 2008 for the LPG cleared availing exemption under Notification No. 4/2006-CE dated 01.03.2006 to various public sector undertaking who ultimately distributed the same under Public Distribution Scheme (PDS). A show cause notice was issued to them on 27.08.2008 proposing rejection of the refund claim on the ground that the reversal of the credit was in accordance with the provisions of Rule 6 of the CENVAT Credit Rules, 2004. On adjudication, the refund was rejected. Aggrieved by the said order, the appellant filed an appeal before the Commissioner (Appeals), who in rejected their appeal. Hence, the present appeal.
3. Ld. Advocate Shri P. K. Shetty for the appellant argued that at the time of availing of CENVAT credit the appellant were not aware of whether the LPG would be cleared by the public sector undertakings for domestic use or industrial use. It is his contention the exemption Notification No. 4/2006-CE dated 01.03.2006 as amended is conditional one, hence, in view of the judgement of the Honble Rajasthan High Court in the case of Hindustan Zinc Ltd. Vs. Union of India 2008 (223) E.L.T. 0149 (Raj.), ultimately upheld by the Supreme Court reported as 2014 (303) E.L.T. 321 (S.C.), the appellant are not required to reverse the credit on the inputs contained in the LPG cleared for domestic consumption by availing benefit of Notification No. 4/2006-CE dated 01.03.2006.
4. Per contra, the Ld. AR for Revenue submits that the principle laid down in Hindustan Zinc Ltd., is not applicable to the facts of the present case inasmuch as, in the said case, the issue involved was whether the by-product which emerges during the course of manufacture of finished goods, attracts 8% of the value of the by-product or otherwise under Rule 57CC of erstwhile Central Excise Rules,1944. He submits that in the present case, the appellant are well aware of the fact that at the time of clearance of the LPG that whether it was meant for PDS Scheme or for industrial use, and accordingly, they reversed the CENVAT credit availed on inputs/input services attributable to the LPG cleared for domestic purposes by availing benefit of Notification No. 4/2006-CE dated 01.03.2006. In support of his contention, he referred to the correspondences between the department and appellant enclosed at pages 94 to 97 of the appeal paper book. He submits that Clause (viii) of Sub Rule 3(a) of Rule 6 of the CCR, 2004, lays down that proportionate credit attributable to the LPG, on which exemption is claimed, required to be reversed. It is his contention that once the provision under the said Cenvat Credit Rules is unambiguous and clear there is no question of any interpretation as to whether the exemption is conditional or absolute.
5. Heard both sides and perused the records. The short question involved for determination is : whether the appellant is required to reverse the CENVAT credit availed on inputs and input services attributable to LPG cleared by availing exemption under Notification No. 4/2006-CE dated 01.03.2006 during the period May, 2007 to April, 2008 or other wise. The contention of the appellant, in seeking the refund of the credit reversed, during the said period rests on the argument that Rule 6 (3) of CCR, 2004, applies only to goods which are absolutely exempted from payment of duty and not to those goods, which are exempted on fulfilment certains conditions, like the present Notification No. 4/2006 dated 01.03.2006. In support, they have referred to the judgement of the Honble Rajasthan High Court in Hindustan Zinc Ltds case (supra). In my view, the contention of the appellant cannot be acceptable as there is a specific mention of reversal of CENVAT credit attributable to inputs and input services under Rule 6 (3)(a)(viii) of CCR, 2004 where the Appellants fail to maintain separate records. Reading the definition of the exempted goods prescribed at Rule 2(d) of the said CCR Rules,2004 and the said provisions it cannot be said that LPG exempted or chargeable to NIL rate of duty are not required to reverse proportionate CENVAT credit on the inputs attributable to the exempted product. In the present case, the appellant are well aware of the quantum of CENVAT credit on inputs and input services used in our in relation of LPG used for domestic purpose and accordingly reversed the same periodically as per the said Rules. The case laws referred by the Appellant, in my opinion, is not relevant to the facts and circumstances of the present case, in inasmuch as in the said case, the issue involved was whether the by-product, namely, sulphuric acid cleared to fertilizer plants, would be subjected to 8% of the price, as per Rule 57 CC of the erstwhile Central Excise Rules, 1944. The factual matrix of the said case was totally different. In these circumstances, I do not find any reason to interfere with the order of the Ld. Commissioner (Appeals). Consequently, the Order impugned is upheld and the appeal being devoid of merit, accordingly rejected.
(Dictated and pronounced in the Court) (D. M. Misra) Member (Judicial) G.Y. ??
??
??
??
5