Custom, Excise & Service Tax Tribunal
M/S. The Andhra Pradesh Paper Mills Ltd vs Cce, Visakhapatnam on 20 May, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 20/05/2010
Date of decision:20/05/2010
Appeal No.E/89-91/09
(Arising out of Orders-in-original No. 50/2008(PVR), No. 51/2008(PVR) & No. 52/2008(PVR) all dated 31/10/2008 passed by CCE&C, Visakhapatnam)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, Member(Technical)
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?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. The Andhra Pradesh Paper Mills Ltd.
..Appellant(s)
Vs.
CCE, Visakhapatnam
..Respondent(s)
Appearance Mr. C. Sravanan, Advocate for the appellant.
Mr. M.M. Ravi Rajendran, JDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2010 Per M.V.Ravindran These three appeals are filed against the Orders-in-original No. 50/2008(PVR), No. 51/2008(PVR) & No. 52/2008(PVR) all dated 31/10/2008. Since The issue involved in all these appeals are common, we take up the appeals for disposal by a common order.
2. The relevant facts that arise for consideration are that the appellants herein have integrated plant basically meant for manufacture of paper and paper board, during the course of which pulp emerges at an intermediate stage. The said pulp which emerges at an intermediate stage attracts nil rate of duty. The said pulp is consumed for the manufacture of dutiable final product within the factory and the appellants are availing cenvat credit on the inputs consumed in the manufacture of the said pulp without any restriction. The appellants have started clearing certain quantity of pulp to their own sister unit without payment of duty. Since the appellants have made home clearances without payment of duty, Revenue harboured an opinion that the appellant is liable to pay 8% / 10% of the value of such pulp cleared to their sister units, as they have availed cenvat credit on the common inputs going into the manufacturing of the said pulp. Show cause notices were issued. Adjudicating authority confirmed the demand of 8% / 10% of the value of the goods cleared by the appellant without payment of duty despite resistence of the assessee on the ground that the provisions of Rule 6(3) of the Cenvat Credit Rules is not applicable to stocks transfers. The adjudicating authority came to the conclusion that the demands raised in the show cause notices need to be confirmed as the appellant has not maintained separate inventory for dutiable and non-dutiable products , hence provisions of Rule 6(3) attracts and coming to such conclusion confirmed demands raised in the show cause notices. Aggrieved by such orders, the appellants are before us.
3. Ld. Counsel appearing on behalf of the appellant submits that the provisions of Section 73 of the Finance Act, 2010 has envisaged that the amount of cenvat credit attributable to the inputs which were consumed in the manufacture and clearance of exempted goods if reversed is enough for the purpose of satisfaction of provisions of Rule 6(3) of the Cenvat Credit Rules, 2004. It is his submission that the said amendment is of retrospective nature. He would submit that the appellant will be able to produce the evidences and necessary certificates from the Chartered Accountant for the correctness of such amounts, hence it is his submission that the impugned orders may be set aside and the matter may be remanded back to the adjudicating authority to consider the issue afresh in the light of the amendment to Section 73 of the Finance Act, 2010.
4. Ld. JDR would also submit that the amendment in the Finance Act is in retrospective nature.
5. We have considered the submissions made by both sides and perused the records. Only the issue to be considered in this case is whether the appellant is required to reverse the amount of cenvat credit taken on the inputs which are used in the manufacture of exempted goods cleared from the factory premises without payment of duty and if such amount is reversed will that be enough for satisfaction of the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004.
6. We note that it is correctly submitted by the ld. Counsel, the provisions of Rule 73 of the Finance Act, 2010 has incorporated in the statute with retrospective effect by an amendment of Rule 6(3) of the Cenvat Credit Rules, 2004. By such retrospective amendment, it is brought on statute that the cenvat credit attributable to the inputs consumed in the manufacture of the final products, which are cleared from the factory premises without payment of duty either by way of exemption or being of nil rate of duty, reversal of such amount is sufficient and such reversal should be done within a period of 6 months from the date of Finance Bill, 2010 received the assent of the Honble President. We find that, if the assessee/appellant is able to do so, he may get the benefit as has been enshrined in the Finance Act, 2010. In view of this, we set aside the impugned orders and remand the matter back to the adjudicating authority to re-consider the issue afresh after following the principles of natural justice.
(Operative portion of this order pronounced on conclusion of the hearing) (P.KARTHIKEYAN) Member (Technical) (M.V. RAVINDRAN) Member (Judicial) Nr ??
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