Custom, Excise & Service Tax Tribunal
Synthite Industries Ltd vs Bangalore-Iv on 21 May, 2024
Excise Appeal No. 1549 of 2012
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE
REGIONAL BENCH, COURT NO. 1
EXCISE APPEAL NO. 1549 OF 2012
(Arising out of Order-in-Original No. 14/2012 dated 30.03.2012
passed by the Commissioner of Central Excise , Bangalore-II.)
SYNTHITE INDUSTRIES LTD
Kumarapatnam - 581123 Appellant
Near Harihar, Haveri District
VERSUS
COMMISSIONER OF CENTRAL EXCISE,
BANGALORE-IV Respondent
Commissionerate, Central Revenue Buildings, Bangalore - 560 001.
Appearance:
Present for the Appellant :Mr. B.N.Gururaj, Advocate Present for the Respondent: Mr. Maneesh CORAM:
HON'BLE MR. D. M. MISRA, MEMBER ( JUDICIAL ) HON'BLE MR. R. BHAGYA DEVI, MEMBER ( TECHNICAL ) DATE OF HEARING: 21.05.2024 DATE OF DECISION: 21.05.2024 FINAL ORDER No. 20468/2024 This is an appeal filed against Order-In-Original No. 14/2012 passed by the Commissioner Central Excise, Bangalore.
2. Briefly stated that the facts of the case are that appellant were manufacturer of Oleoresin Paprika, falling under chapter sub heading 3301 and other products during the relevant period. They have availed CENVAT credit on common input services used in the manufacture of exempted and dutiable products. The Audit party of Page 1 of 4 Excise Appeal No. 1549 of 2012 the Revenue objected that during the course of manufacturer of Oleoresin Paprika, chilli seeds emerges; which are later cleared without payment of duty and that though they have taken CENVAT credit on common input services, and not maintained separate records; therefore, they were required to discharge 10% value of the exempted product viz chilli seeds in accordance with rule 6(3)(i) CCR, 2004.
3. Consequently, Show cause notice issued to them on 20.12.2011 and later corrigendum demanding, a total amount of Rs. 3,04,51,326/- being 10%/5% of the value of the exempted products, namely, chilli seeds classifiable under tariff heading 09042090, for the period 2007-2008 to 2011-2012 with interest and penalty. On Adjudication, the demand is confirmed with interest and penalty. Hence, the present appeal.
4. At the outset the Learned Advocate for the appellant has submitted that the chilli seeds are arised during the course of manufacture is a byproduct, hence, Rule 6 of CCR, 2004 is not applicable to the present case. In support, he referred to the judgment of Hon'ble Supreme Court in the case of Union of India Vs. M/s. DSCL Sugar ltd [2015 (322) E.L.T. 769 (SC)].
5. Further, he submits that before issuance of show cause notice the proportionate credit attributable to exempted final product viz. chilli seeds amounting to Rs. 2,26,436/- along with 24% interest amounting to Rs. 97,627 has been paid on 25.01.12. It is his contention that therefore demanding 5%/10% of the value of the exempted product cannot be sustained in view of the retrospective amendment to the said Rule vide section 72 and 73 of the Finance Page 2 of 4 Excise Appeal No. 1549 of 2012 Act, 2010 and the Notification was issued in 2016. Therefore, the present appeal be allowed.
6. Learned AR for the Revenue reiterated the findings of the Learned Commissioner Appeals, Bangalore.
7. Heard both sides, and perused of records. We find that the short issue involved for determination is whether 5%/10% of the value of the exempted products viz. chilli seeds be leviable, when separate accounts were not maintained during the relevant period, as per Rule 6(3)(i) of CCR, 2004.
8. Undisputedly, the appellant had reversed the proportionate CENVAT credit attributable to exempted products amounting Rs. 2,26,436/- with interest before issuance of show cause notice. Thus demanding 5%/10% value of the exempted products cannot be sustained in view of the judgment of this Tribunal had in the case of M/s. Parle Products Private Limited Vs. The Commissioner of Central Excise in Final Order No. 20383/2024, wherein it is observed as follows:
"8. Since the appellant has reversed the credit with interest availed on inputs and input services attributable to exempted products, accordingly in view of the series of judgments referred to by the learned advocate for the appellant and also in view of the retrospective amendment to the relevant Cenvat Credit Rules, 2004 vide Section 72 and 73 of Finance Act, 2010 and Notification No. 13/2016 - CE(NT) dated 01.03.2016, the demand of 10% of the value of the exempted goods confirmed by the learned Commissioner in the impugned order cannot be sustained."Page 3 of 4 Excise Appeal No. 1549 of 2012
9. In the result, the impugned order is set aside with consequential relief, if any, as per law.
(Order dictated and pronounced in Open Court.) (D. M. MISRA) MEMBER ( JUDICIAL ) (R. BHAGYA DEVI) MEMBER ( TECHNICAL ) Sasidhar Page 4 of 4