Customs, Excise and Gold Tribunal - Ahmedabad
Commr. Of Central Excise And Customs vs Dishman Pharmaceuticals And Chemicals ... on 1 November, 2006
ORDER Archana Wadhwa, Member (J)
1. Being aggrieved with the order passed by the Commissioner (Appeals) vide which he has allowed modvat credit of special excise duty to the respondents, the Revenue has filed the present.
2. As per facts on record, during the period, December 2000 to February, 2002, the respondent received 16 consignments of Hexane on which Basic Excise duties and Special Excise duties were paid, but the respondent took credit of only the Basic Excise duties aggregating to Rs. 3,72,449/- on account of a bonafide impression that credit of only Basic duty was available because SED was not available for discharge of duty on the respondent's final products.
During the March, 2002 to January, 2003, the Special Excise duty was not availed as credit in respect of 22 consignments of Hexane on the same plea. Subsequently, on 21.2.2003, the respondent took credit of Special Excise duties aggregating to Rs. 3,72,449/- and Rs. 4,87,024/- for all the above 16 and 22 consignments respectively on realizing that credit of SED was also available and wrote a letter to the Central Excise Department informing it about the action.
3. On 29.10.2003, two show-cause notices were issued proposing to deny credit of Special Excise duties aggregating to Rs. 3,72,449/- and Rs. 4,87,024/- on the ground that under Rule 4 of Cenvat Credit Rules, 2002, the assessee was required to take Cenvat Credit of inputs immediately on receipt thereof in the factory.
4. The said show-cause notices culminated into two different orders passed by the Deputy Commissioner of Central Excise of disallowing credit along with confirmation of demand. The said orders were appealed against by the assessee and the Commissioner (Appeals) vide his impugned order allowed the same.
Hence the present appeal filed by the Revenue.
5. While allowing the appeal, the Commissioner (Appeals) has observed and held as under:
5. I have carefully gone through the facts of the case and submission made by the appellants and find that the appellants have contended that no time limit is prescribed in the Rule for availing Cenvat Credit, whereas adjudicating authority has observed that under Cenvat Credit Rules, 2002, although no time limit is prescribed for availing Cenvat but it mention that 'As per Sub-rule (1)(g) of Rule 4 the condition is 'The Cenvat credit is respect of inputs may be taken immediately on receipts of inputs in the factory of the manufacturer' and that the idea behind the word "immediately" is that there should not be inordinate delay in availing Cenvat credit but in this case appellant has not taken the credit of only special excise duty immediately on receipts of inputs in the factory although they accounted all the inputs in their account properly. Under the wrong impression of their excise clerk that the special excise duty was not available to them because, this special excise duty is not leviable on their final product. In the case of M/s Stress Crete Pvt. Ltd. v. Union of India the High Court of Madhya Pradesh has held that when the Rule does not prescribe any time limit, credit cannot be denied. Further it appears that it is a procedural lapse, hence Cenvat credit cannot be denied when facts of receipts of inputs by the appellants and duty paid character of the inputs is not disputed as held by the Hon'ble Tribunal in the case of Bajaj Temp Ltd. v. CCE, Pune 1999 (80) ECR 26 (1) & Klockner Supreme Penta Plast Ltd. v. CCE, Indore 1999 (144) ELT 253 (T).
6. As against the above, the Revenue has emphasized the expression "immediately" appearing in Rule 4 of Cenvat Credit Rules, 2002.
7. After considering the submissions made by both sides, I find that apart from the facts that there are judicial and quasi-judicial decisions on the above points, the Board itself has clarified the position vide their letter F. No. 345/2/2000 PRU dt. 29.8.2000. In para 10 of the above clarification, it has been observed that the expression "immediately" is if the manufacturer desires, he can take Cenvat credit on the earliest opportunity when the invoices are received in the factory. This however does not mean, nor is it even intended that if the manufacturer does not take credit as soon as the inputs are received in the, factory, he would be denied the benefit of Cenvat credit, as the interpretation is not tenable."
8. In view of the instant case, the inputs were received by the appellants and duly entered in their RG 23A Part I records and the credit of basic excise duty was taken immediately. The credit of the Special Excise duty was not availed by the appellants on the belief that the same was not available. However, subsequently, realsing their mistake and on finding out that the same was available for the discharge of the Basic excise duty on their final product, they availed credit. As the inputs had already been received by them, and the invoices were available with them, it is only a paper accounting which was required to be done and was done subsequently. In this scenario, there is no chance of any manipulation and wrong availment of credit. This has also been ratio of the Tribunal's decision in the case of Crystal Cable Industries Ltd. v. Commr of Central Excise, Kolkata II and in the case of Stresscrete Pvt. Ltd. v. Union of India . As such, I am of the view that there is no infirmity in the order passed by the Commissioner (Appeals). Appeal filed by the Revenue is accordingly rejected.
(Dictated in the Open Court.)