Custom, Excise & Service Tax Tribunal
M/S. Unitech Machines Ltd vs C.C.E. & S.T. Meerut-I on 27 April, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. II Appeal No. E/52231/2014-EX(SM) [Arising out of Order-in-Original No. MRT-EXCUS-000-APP-135-13-14 dated 26.09.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Meerut-I]. For approval and signature: Honble Shri Ashok Jindal, 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? 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? 4 Whether Order is to be circulated to the Departmental authorities? M/s. Unitech Machines Ltd. .Appellants Vs. C.C.E. & S.T. Meerut-I .Respondent
Appearance:
Shri Alok Arora, Advocate for the Appellants Ms. Ranajana Jha, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 27.04.2015 FINAL ORDER NO. 51493/2015-EX(SM) Per Ashok Jindal:
The appellant is in appeal against the rejection of their refund claim by both the lower authorities.
2. The facts of the case are that appellant is manufacturer of motor vehicle part and for smooth functioning of the factory they have obtained plastic bins for movement of goods from one unit to the other. After certain usage of these plastic bins they were not usable. Therefore, they have been written off during the period 2006-2011. An audit was conducted at the premises of the appellant and it was pointed out to the appellant that the Cenvat Credit availed on these plastic bins which have been written off in their books of accounts they are not entitled to take Cenvat Credit. Therefore, they are required to reverse Cenvat Credit. The appellant immediately reversed Cenvat Credit as well as interest. After realizing the appellant is not required to reverse the Cenvat Credit the appellant filed refund claim of Cenvat Credit reversed by them along with interest. To deal with the refund claim a show cause notice was issued to the appellant that is per Rule 3(5)(b) of the Cenvat Credit Rules, 2004 if the capital goods are written off in the books of account before use the appellant is required to reverse Cenvat Credit availed on the said goods. It is further observed in the show cause notice that the refund claim has been filed on 31.10.2012 whereas reversal took place on 31.10.2011. Therefore, same is beyond the period of one year as prescribed under section 113 of the Central Excise Act 1944. Therefore, refund claim is hit by limitation and is time bar. Matter was contested by the appellant before the Adjudicating Authority. Adjudicating Authority hold that refund claim filed by the appellant is within time as per section 11 B of the Central Excise Act 1944 but denied refund claim on the premises that as per Rule 3(5)(b) of the Cenvat Credit Rules 2004, the appellant is not entitled to take Cenvat Credit on plastic bins. Consequently, reversal of Cenvat Credit along with interest is sufficient. On appeal before the Ld. Commissioner (A) the order of adjudication was upheld.
3. Ld. Counsel for the appellant submits that show cause notice issued to them on the ground of limitation and same has been accepted by the Adjudicating Authority that refund claim is within time. Therefore, they are entitled for the refund claim. He further submits that provision of the Rule 3(5)(b) of the Cenvat Credit Rules 2004 are not applicable as they have written off these plastic bins in their books of account after use not before use. Therefore, the provision of Rule 3(5)(b) of the Cenvat Credit Rule 2004 is not applicable. Consequently, they are entitled for refund claim.
4. On the other hand Ld. AR drew my attention to the show cause notice and submits that during the course of audit the appellant has reversed Cenvat Credit along with interest. As per the audit report they have reversed Cenvat Credit and have not disputed the fact that whether they have written off these plastic bins after use or before use. If they intent to do so they could have brought these facts in the knowledge of the Adjudicating Authority at that time and could have came to a conclusion at that very time. She further drew my attention to the order in appeal and submits that under Rule 3(5)(b) of Cenvat Credit Rules 2004 if capital goods have been removed on which credit has been taken after being used whereas capital goods or waste and same is required to be removed on payment of amount equal to the Cenvat Credit availed on such goods reversed by percentage point depends on time of usage of such capital goods. On repeated query from the appellant, appellant has not answered the same. Therefore, there refund claim has been rejected rightly.
5. Heard the parties. Considered the submissions.
6. On perusal of the records I find that show cause notice has been issued to deny the refund claim filed by the appellant on the ground of limitation that their refund claim is barred by limitation under section 11(B) of the Central Excise Act 1994. Said issue has been dealt with before the adjudicating authority during adjudication and it was held that refund claim is not held by bar of limitation. The said order has not been challenged by the Revenue. Therefore, the limitation issue has been settled by the Adjudicating Authority itself. As there is no issue in the show cause notice whether appellant is required to reverse Cenvat Credit or not. Moreover, show cause notice itself clarify as per Rule 3(5)(b) of Cenvat Credit Rules 2004 if the input or capital goods have been written off before use then the provision of said rules is applicable. But in show cause notice itself it is mentioned that these plastic bins have been removed after use. Therefore, I hold that provision under Rule 3(5)(b) of Cenvat Credit Rules 2004 are not applicable to the facts of this case. Both the lower authorities have gone beyond the scope of the show cause notice. Therefore, the impugned order is not sustainable in the eyes of law. Moreover, issue of limitation has already been settled. Therefore, I hold that appellant is entitled for refund claim filed by them.
7. In these terms impugned order is set aside. Appeal is allowed with consequential relief.
(Dictated and pronounced in the open court.)
(Ashok Jindal) Member (Judicial)
Bhanu
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