Custom, Excise & Service Tax Tribunal
Commr. Of Central Excise , Kolkata-Iii vs M/S. Texmaco Rail & Engg. Ltd on 13 November, 2014
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Excise Appeal Nos. E/177/09 & E/240/09
(Arising out of the Order-in-Original No. 49/COMMR/CE/KOL-III/2008-09 dated-06/02/2009 passed by the Commissioner of Central Excise, Kolkata-III)
For approval and signature of:
DR. D.M. MISRA, HONBLE JUDICIAL MEMBER
DR. I.P. LAL, HONBLE TECHNICAL MEMBER
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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 ?
Commr. of Central Excise , Kolkata-III
APPELLANT(S)
VERSUS
M/s. Texmaco Rail & Engg. Ltd.
RESPONDENT(S)
AND
Vice Versa
APPEARANCE
Sri S. Sharma, Commr. (A.R.)
FOR APPELLANTS
Sri Pulak Kr. Saha, C.A
FOR THE RESPONDENTS
CORAM:
DR. D.M. MISRA, HONBLE JUDICIAL MEMBER
DR. I.P. LAL, HONBLE TECHNICAL MEMBER
DATE OF HEARING & DECISION : 13.11.2014
ORDER NO.FO/A/75720-75721/2014
Per DR. I.P. LAL
These appeals are filed by the assesse i.e. M/s. Texmaco Rail & Engg. Ltd. and the Revenue against the order of the Commissioner, Central Excise, Kolkata.
2. Brief facts of the case are that the assesse are manufacturer of excisable goods viz. Railway Wagons, Bogie, Container, Tank, Flat Wagons, Pressure Vessels and structural materials falling under Chapter 84, 86 and 73 of CETA, 1985 had cleared 225 Nos. of Bogie, Container, Flat Wagons during the period March, 2008 to September, 2008 to M/s. Container Corpn. of India Ltd. without payment of duty under Served from India Scheme i.e. SFIS after availing benefit of exemption Notification No. 34/2006-CE dated-14/06/2006. Duty involved was debited from the script amount of the buyer i.e. M/s. Container Corporation. It is alleged that as the impugned goods were exempt, the said assesse are not eligible for CENVAT Credit on such quantity of input or input service which is used in the manufacture of the said goods. As the assesse had manufactured and cleared exempted goods and also dutiable goods and no separate accounts for receipt, consumption and inventory of inputs and input services meant for manufacture of dutiable and exempt finished products or in providing output service had been maintained they were required to pay under Rule 6 (3) of CENVAT Credit Rules, an amount equal to 10% of the total price, excluding Sales Tax and other taxes paid on such goods of the exempted final products. Accordingly, a show cause notice was issued. During the adjudication proceedings, the Ld. Commissioner confirmed the demand of Rs.6,35,20,268.00, imposed equal amount of penalty and ordered for interest also. Being aggrieved, the assesse has filed appeal to this Forum. In the present case, the Revenue has also filed an appeal against the above order of the Commissioner against allowing the credit of duty paid on free issue materials i.e. Wheel Sheets which were exclusively used in the manufacture of impugned exempt goods.
3. The Ld. Chartered Accountant appearing for the assesse submitted that the impugned goods were cleared and supplied under SFIS Scheme to M/s. Container Corpn. of India Ltd. following the procedure laid down under Notification No. 34/06-CE dated 14/06/2006. It is submitted that under the above Notification, the goods are exempted subject to the condition, inter alia, that the said SFIS Certificate is produced before the Jurisdictional Central Excise Officer at the time of clearance for debiting of the dues leviable on the said goods and accordingly the clearance of such goods cannot be treated as Exempt in as much as instead of duty payment through account current i.e. PLA or CENVAT Credit A/cs. of the manufacturer, the amount of duty is to be debited from such SFIS Certificate.It is the contention that as the goods cleared under SFIS Scheme are not exempt, the assesse is not liable to pay any amount under Rule 6 (3) of CENVAT Credit Rules. In support, the Ld. C.A. relied on the following case laws:
i) Voltamp Transformers Ltd. Vs. Commr. of Central Excise, Vadodara-2012 (276) ELT 238 (Tri.-Ahmd.)
ii) M/s. Essar Oil Ltd. Vs. CCE, Rajkot-2010-TIOL-1647-CESTAT-AHM.
iii) Universal Power Transformer Pvt. Ltd. Vs. Commr. of Central Excise, Bangalore-2010-TIOL-985-CESTAT, BANG.
He submits that Revenues appeal filed against Tribunals order in case of M/s. Voltmap (Supra) is dismissed by Honble High Court of Gujarat as reported in 2013 (296) ELT A-16 (Gujarat).It is the contention that as the impugned judgment were not available while passing the order, therefore, this Tribunal be pleased to remit the case back to the Ld. Commissioner for fresh decision.
4. As per contra, the Ld. A.R. for Revenue has submitted that the adjudicating authority has held that CENVAT Credit of duty, if any, paid on the free supplied material is to be allowed by the Jurisdictional Assistant Commissioner on production of duty paying documents but this is beyond the scope of the impugned Show Cause Notice. He submits that in the present case the adjudicating authority has allowed the CENVAT Credit on the free supplied materials i.e. Wheel Seats which were exclusively used in the manufacture of the impugned exempt goods and therefore, erred in allowing the said credit. Ld. A.R. submitted that the goods imported under DEPB Scheme, (which is akin to SFIS Scheme) were considered to be exempt as held in the case of:
i) Commr. of Customs Vs. Pasupati Acrylon Ltd. -2013 (296) ELT 182(Guj.)
ii) Gujarat Ambuja Exports Ltd. Vs. Govt. of India-2013 (289) ELT 273 (Guj.) It is submitted that in view of the above facts, the case should be remitted back to the Ld. Commissioner for fresh decision.
5. Heard both sides and perused the records.
6. We find that as per contention of the Ld. C.A., in similar circumstances where the appellant cleared dutiable finished goods by debiting the same under Serve from India Scheme (SFIS), the Tribunal in case of M/s. Voltmp Transformers Ltd. (supra), M/s. Essar Oil Ltd. (Supra) and M/s. Universal Power Transformers Ltd. (Supra) held that benefit of Notification No. 34/06-CE. cannot be equated to exempted goods, and appellant not required to pay an amount equal to 10% of value of goods cleared by availing benefit of said notification. On the other hand, Revenue has assailed the impugned order of the Ld. Commr. on the ground that he has allowed the credit on the duty free materials used in the manufacture of the impugned goods, which were exempt from payment of duty. We find that at the time of passing the order, the case laws cited by the Assessee were not available to the Ld. Commr. and therefore, he had no occasion to examine the facts of the present case, in light of the case laws (cited supra). We also find that Ld. Commr. has not recorded his findings on the issue raised by the Revenue whether the credit could be allowed on the duty paid materials used in the manufacture of impugned exempt goods. Revenue has further contended that while allowing the said credit, the Ld. Commr. has traversed beyond the scope of the show cause notice. Both sides agreed that these issues to be addressed afresh by the adjudicating authority. In view of the facts and circumstances of the case stated above, we are of the opinion that order passed by the Ld. Commissioner requires to be set aside and merits fresh decision after recording his findings on the various issues raised by the assesse and the Revenue. Accordingly, we set aside the impugned order and with the consent of both sides remit the matter to the Ld. Commissioner for deciding all issues afresh.It is needless to mention that a reasonable opportunity of hearing should be afforded to both the parties before passing the fresh order.
7. Consequently, the appeals filed by the Assessee and the Revenue are allowed by way of Remand.
(Operative part of the order already pronounced in the open Court)
Sd/- 09/01/2015 Sd/- 09/01/15
(D.M. MISRA) ( I.P. LAL)
JUDICIAL MEMBER TECHNICAL MEMBER
k.b/-
Excise Appeal Nos. E/177/09 & E/240/09
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