Custom, Excise & Service Tax Tribunal
Cce, Panchkula vs Ballarpur Industries Ltd on 26 July, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH-160017 COURT NO.1 Appeal No.E/57658/2013-(SM) [Arising out of the Order-in-Appeal No. 73/SVS/PKL/2013 dated 07.02.2013 passed by the CCE (Appeals), Delhi-III, Gurgaon.) Date of Hearing/Decision: 26.07.16 For Approval & signature: Honble Mr.Ashok Jindal, Member (Judicial) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes CCE, Panchkula Appellants Vs. Ballarpur Industries Ltd. Respondent
Appearance Sh. Vijay Gupta, AR- for the appellant Ms. Karati Somani, Advocate - for the Respondent CORAM: Honble Mr.Ashok Jindal, Member (Judicial) FINAL ORDER NO: 61011/2016 PER: ASHOK JINDAL The Revenue is in appeal against the impugned order.
2. The facts of the case are that the respondent is manufacture of paper and clearing the same on payment of duty and the factory gate in reel form after cutting centres the reel to the job worker. The paper is converted into sheets and transferred to the depot, thereafter, the respondent is paying duty of reel at the time clearing from the factory gate. Revenue is of the view that as cutting is done after clearance of the goods at the factory gate, therefore, the service tax paid by the job worker on cutting charges is not admissible to the respondent as cenvat credit. In these set of facts, a show cause notice was issued to the respondent to deny credit of service tax paid for conversation of paper reel into paper sheet. The matter was adjudicated, cenvat credit was availed by the respondent is denied consequently, duty was demanded along with interest and equivalent amount of penalty was imposed. On appeal before the Ld. Commissioner (A), the ld. Commissioner (A) has made the categorically observation that the respondent has included cutting charges in the assessable value of the paper reel form from the factory gate and allowed cenvat credit on cutting charges. Aggrieved from the said order of the Ld. Commissioner (A) Revenue is in appeal before me.
3. The ld. AR submits that the respondent is clearing paper in reel form from their factory gate and paying duty thereon. After clearance of the goods process of cutting take place and goods have been cleared on higher price from the depot and the respondent is not paying duty on the value at which the paper sheet has been cleared from their factory gate, therefore, the respondent is not entitled to take cenvat credit on cutting charges which is in reel form. He further submits that the price at which the reel is sent to the cutting centres is higher than the value at which same is being sold at the factory to the independent buyer. In that circumstances, the respondent is not entitled to take cenvat credit.
4. On the other hand the Ld. Counsel for the respondent submits that the cutting charges has been included in the assessable value of paper in reel form cleared from their factory gate , therefore, they are entitled to avail cenvat credit on cutting charges. To support this contention in true my attention to O-I-O 23-59/ADC/AKG/PKL/2010-2011 dated 30.11.2010 show that the cutting charges had been included in the assessable value of clearance paper in reel form of their factory gate.
5. Heard the parties and considered the submissions.
6. On careful consideration of the submission made by both the sides, the short issue involved in the matter is that whether the respondent is entitled to avail Cenvat credit on cutting charges or not?
7. In this case the respondent is including cutting charges in the assessable value of clearance paper in reel form from factory gate. In that circumstances, I hold that the respondent is entitled to avail cenvat credit of service tax paid on cutting charges, therefore, I do not find any infirmity in the impugned order. The same is upheld. The appeal filed by the Revenue is dismissed.
(dictated and pronounced in the open court) Ashok jindal Member (Judicial) rt