Custom, Excise & Service Tax Tribunal
M/S. Heat Shrink Technologies Ltd vs Commissioner Of Central Excise, ... on 19 October, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/3826 to 3828/05 (Arising out of Order-in-Appeal No. BR/126-128/M-IV/05 dt. 18.8.2005 passed by the Commissioner (Appeals) Central Excise, Mumbai-IV ) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see : No 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 : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
======================================================= M/s. Heat Shrink Technologies Ltd. :
Appellant P.R. Shah Y.A. Thomas VS Commissioner of Central Excise, Mumbai-IV :
Respondent Appearance None for Appellant Shri Ashutosh Nath, Assistant Commissioner (A.R) for respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Honble Mr. C.J. Mathew, Member (Technical)
Date of hearing : 19/10/2016
Date of pronouncement : 16/11/2016
ORDER NO.
Per : Ramesh Nair
The fact of the case is that the appellants are manufacturer of Compounds of Ethylene-acted co-polymer, insulating fitting and components falling under Chapter heading 39 & 85 of the Central Excise Tariff Act, 1985 respectively and were availing the Cenvat Credit facility. They clear the manufactured products either for home consumption on payment of duty or for export along with the bought out items in the form of Cable Jointing Kits. Some of the bought-out items like tubings, FRP Rods, Adhesive, Mastic tapes etc. are cleared as insulating fittings under sub-heading 8547.00. The contention of the Revenue is that this removal of bought-out items does not undergo any change and no process amounting to manufacture takes place. Therefore the cable jointing kits are not excisable, hence on the bought-out items, the cenvat credit cannot be allowed for the reason that the same was not used in the manufacture of final product. The adjudicating authority has confirmed the demand and appellate authority has upheld the same. Being aggrieved by the impugned order, the appellants filed appeal before us.
2. None appeared on behalf of the appellant however, the Ld. Counsel for the appellant MS Murthy & Associates filed letter for adjournment and stated that if the Bench may be pleased to dispose of the appeal in my absence by taking into consideration the submissions made in the said letter the appellant has no objection. On going through the letter, we find that in the appellants own case with regard to cable jointing kits and the cenvat credit was allowed on the ground that on the clearance of the same the duty was paid. This decision was reported as Heat Shrink Technologies Ltd. Vs. Collector of Central Excise, Mumbai 2007 (220) E.L.T. 437 (Tri.-Mumbai).
3. Shir Ashutosh Nath, Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that the decision relied upon by the appellants are not applicable as the Honble Supreme Court vide order dt. 3.3.2000 in the appellants own case held that the impugned goods as non excisable. As regard this Tribunal decision in the appellants own case vide order dt. 5.1.2007 an appeal was filed by the Revenue in the Honble Bombay High Court which is pending.
4. We have carefully considered the submissions made by both the sides. We find that the period involved in the present case is July 2003 to March 2004. The issue to be decided is whether the activity of bought out items cleared as cable jointing kits is a manufactured goods, and if not whether the Cenvat Credit on the bought out items is admissible for non manufacturing activity. In this regard, we are of the view that Rule 16 of the Central Excise Rules is directly relevant to the fact of the present case which is reproduced below:-
Rule 16. Credit of duty on goods brought to the factory. -
(1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.
(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.
Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.
(3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by the Commissioner. On the plain reading of the above Rule, it can be seen that on the bought-out items credit can be availed and if the activity is not amount to manufacture on the clearance of the same duty is required to be paid equal to the cenvat credit availed on such bought out items. In view of the above Rule even though if it is admitted that the activity of the appellants is not amount to manufacture, as regard the clearance of cable jointing kits the cenvat credit availed by the appellants is not incorrect. As regard, the Supreme Court decision in the appellants own case referred by the Ld. A.R. It is observed that during the period involved in the said decision Rule 16 of the Central Excise Rules was not existing. Therefore the ratio of the Supreme Court decision is not applicable in the present case. In view of the provisions of Rule 16 of the Rule, in our considered view the appellants act of availing the Cenvat Credit in respect of bought out items i.e. Cable Jointing Kits is clearly admissible. The impugned order is set aside and the appeals are allowed.
(Pronounced in court on 16/11/2016 )
(C.J.Mathew)
Member (Technical)
(Ramesh Nair)
Member (Judicial)
SM.
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Appeal No. E/3826 to 3828/05