Custom, Excise & Service Tax Tribunal
Cce, Chennai Iv vs International Flavours & Fragrances ... on 27 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/973 to 983/2006 and E/986 & 987/2006
(Arising out of Orders-in-Appeal Nos. 56 to 65/2006 (M-IV) dated 20.9.2006, No. 67/2006 (M-IV0 dated 25.9.2006 No 71/2006 (M-IV) dated 27.9.2006 and No. 72/2006 (M-IV) dated 27.9.2006 passed by the Commissioner of Central Excise (Appeals), Chennai)
For approval and signature:
Honble Shri P.K. Das, Judicial Member
Honble Shri R. Periasami, Technical Member
1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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 the Members wish to see the fair copy of the Order?
4. Whether order is to be circulated to the Departmental authorities?
CCE, Chennai IV Appellant
Vs.
1. International Flavours & Fragrances India Ltd.
2. International Flavours & Fragrances India Ltd.
3. International Flavours & Fragrances India Ltd.
4. Ilgin Automotive Pvt. Ltd.
5. TI Metal Forming Ltd.
6. Hyundai Motor India Ltd.
7. Hyundai Motor India Ltd.
8. Tube Products of India
9. Chith Chemicals Pvt. Ltd.
10. Hindustan Coca Cola Beverages Pvt. Ltd.
11. TTK Health Care Ltd.
12. L & T Demag Plastics Machinery Ltd.
13. L & T Ltd. Respondents
Appearance Shri P. Arul, Superintendent (AR) for the Appellant S/Shri S. Muthuvenkataraman, M. Karthikeyan Advocates for the Respondents and none for the respondents in Item Nos. 12 and13 CORAM Honble Shri P.K. Das, Judicial Member Honble Shri R. Periasami, Technical Member Date of Hearing: 27.06.2014 Date of Decision: 27.06.2014 Final Order No.40438 to 40450/2014 Per P.K. Das A common issue is involved in all these appeals and therefore all are taken up for disposal.
2. Revenue has filed these appeals against Orders-in-Appeal passed by the Commissioner (Appeals).
3. The facts of the case, in brief, are that the respondents had availed CENVAT credit on inputs and capital goods. They cleared the CENVAT availed inputs and capital goods as such under the cover of invoice as prescribed under the Central Excise Rules, 2002 on payment of an amount equal to the CENVAT availed under Rule 3(4) of the CENVAT Credit Rules, 2002 / Rule 3(5) of the CENVAT Credit Rules, 2004. They debited the amounts in terms of Rule 8 of the Central Excise Rules, 2002 on the 5th day of the following month during which the said clearance was made instead of on the actual date of clearance. The adjudicating authority demanded interest under Section 11AB of the Central Excise Act, 1944 from the date of actual clearance and the date of reversal of the credit. Commissioner (Appeals) set aside the adjudication order.
4. Revenue in these appeals contended that as per Section 11AB of the Act, if any duty of excise was not paid or short-paid, the person liable to pay interest for such belated payment from the date of such clearance.
5. Heard both sides and perused the records.
6. For proper appreciation of the case, the relevant portion of the findings of the Commissioner (Appeals) vide Order-in-Appeal dated 20.9.2006 are reproduced below:-
5. I have carefully gone through the case records and submissions made, written as well as oral. The issue involved in the case is whether facility of payment of duty as provided under Rule 8 of Central Excise Rules, 2002 is available, to the clearance of inputs / capital goods as such from the factory of manufacture. During the impugned period, the appellants had cleared cenvated inputs and capital goods as such to some of their job workers, to the original raw material suppliers and also to their sister concerns in other locations under cover of invoice prescribed under Rule 11 of the Central Excise Rules, 2002. For such clearances, the appellants had paid an amount equal to the CENVAT credit availed, under Rule 3(4) / Rule 3(5) of the CENVAT Credit Rules, 2002/ 2004 by making debit entry in their CENVAT credit account, PLA by 5th of every following months.
6. Honble CESTAT in the case KLRF Textiles Vs. Commissioner of C.Ex. Tirunelveli 2005 (188) ELT 169 (Tri- Chennai) has held that:
After examining the records and hearing both sides, I find that the assessee, during the material period, was paying duty on their goods on a fortnightly basis in terms of Rule 8 of the Central Excise Rules, 2002. According to the fortnightly system of duty payment, the duty for the first fortnight of a calendar month is to be paid on or before the 20th day of that month and that for the second fortnight of the month is required to be paid on or before the 5th day of the succeeding month. On a conjoint reading of the relevant Rules, it is clear that this facility is available not only in respect of final products but also in respect of inputs and capital goods removed as such from the factory of production of final product.
7. The above view has also been affirmed by CESTAT in the case of Commissioner of C.Ex. Raigad Vs. M/s. Pidilite Industries Ltd. 2006-TIOL-649-CESTAT-Mumbai. The relevant portion is reproduced as under:-
The issue under consideration is that whether facility of distinguish payment of duty as provided under Rule 8 of Central Excise Rules, 2002, is available to the clearance of inputs/capital goods as such from the factory of manufacturer.
7. We find that on identical facts, the Honble Madras High Court in the case of CCE, Chennai Vs. SS Lumax Ltd. vide order/judgment dated 10.1.2014 in Civil Appeal No. 1418/2009 rejected the Revenues appeal. The relevant portion of the said judgment is reproduced below:-
The respondent / assessee are the manufacturers of headlamp assembly and motor vehicles part falling under CETA Heading No. 8512 and 8705. The assessee has been availing CENVAT credit on inputs under CENVAT Credit Rules, 2002. During the period from April 2003 to March 2004, the assessee removed inputs as such, on which CENVAT credit was availed and the credit was not reversed on the date of removal. This lead to a demand being issued to the assessee demanding interest of Rs.67,349/- under Section 11AB of the Central Excise Act, 1994 on the ground that if the duty of excise has not been paid or has been short paid, the person liable to pay duty, has to pay interest on such belated payment.
xxxxxx xxxxx xxxx xxxxx
12. Therefore, the expression on the date of such removal is referable to the rate applicable to such goods and it cannot be understood to mean that the duty should be paid at the time of removal in terms of substituted provisions. The expression on the date of such removal stands deleted in the new sub-rule (4) to Rule 3 of CENVAT Credit Rules, 2002, as cited supra.
13. Rule 8 of the CENVAT Credit Rules, 2002, deals with a manner of payment of duty and it states that (1) The duty on the goods removed from the factory or the warehouse during a month shall be paid by the 5th day of the following month. In terms of first proviso to Rule 8, in case of goods removed during the month of March, the duty shall be paid by the 31st day of March. For the purpose of this case, second proviso to Rule 8 would not be of relevance. Thus, in terms of Rule 8(1) r/w sub-rule (4) to Rule 3 of the CENVAT Credit Rules, 2002, the duty shall be paid by the 5th day of the following month and in case, the goods removed during the month of March, the duty shall be paid by the 31st day of March.
14. It is not in dispute that the assessee has paid the duty at the end of the month i.e. much prior to the 5th day of the following month or in case where the removal had taken place in March before 31st March of the relevant year. In such circumstances, it cannot be said that the there has been delay in payment of duty so as to invoke Section 11AB of the Central Excise Act, 1944. Even though the Tribunal has proceeded on the basis that the deposit was made prior to the issuance of show cause notice, on facts, we found, such a contention is not tenable.
8. In view of the above discussion and respectfully following the decision of the Honble High Court, we do not find any reason to interfere with the orders passed by the Commissioner (Appeals). Accordingly, all the appeals filed by Revenue are rejected.
(Dictated and pronounced in open court)
(R. PERIASAMI) (P.K. DAS)
Technical Member Judicial Member
Rex
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