Custom, Excise & Service Tax Tribunal
Jeans Knit Pvt Ltd vs Commissioner Of Central Excise, ... on 13 November, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21218/2017-SM [Arising out of Order-in-Appeal No. 214/2017 dated 15/05/2017 passed by Commissioner of Central Excise , BANGALORE-I( Appeal) ] Jeans Knit Pvt Ltd Regd Office No 21-E-2 II Phase Peenya Industrial Area BANGALORE - 560058 KARNATAKA Appellant(s) Versus Commissioner of Central Excise, Service Tax And Customs Bangalore-II PB 5400 CR BUIDING...QUEENS ROAD, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Mr. N. Anand, Advocate K. S. Ravi Shankar No. 152(18), Race Course Road, Bangalore, - 560001 Karnataka For the Appellant Mr. Parasivamurthy, AR For the Respondent Date of Hearing: 13/11/2017 Date of Decision: 13/11/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22772 / 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 15.7.2017 passed by the Commissioner (A) whereby the Commissioner (A) has rejected the appeal of the appellant.
2. Briefly the facts of the present case are that the appellant is a 100% EOU and engaged in the manufacture and exports of readymade garments falling under Chapter 61, 62 and 65 of CETA, 1985 and is registered with Central Excise. They had earlier availed CENVAT credit of duty paid on various input services and had applied for the refunds of accumulated, unutilized CENVAT credit on various input services under Rule 5 of the CENVAT Credit Rules and Notifications No.5/2006-CE (NT) and No.27/2012-CE (NT) for the period July 2014 to September 2014. Since most of the final products were exported, they were not in a position to utilize the CENVAT credit of service tax paid on various input services. Accordingly, they applied for refund of unutilized credit of Rs.33,79,759/- pertaining to inputs and input services. The Deputy Commissioner of Central Excise, after due process, vide Order-in-Original dated 23.7.2015 sanctioned the refund of Rs.22,25,656/- and rejected an amount of RS.11,54,103/-. He held that Rs.13,535/- is ineligible credit. Remaining amount of Rs.11,40,568/- was rejected on account of the fact that as per ER-2 return, the CENVAT credit availed during the quarter was found to be RS.22,81,894/- whereas the assessee had claimed the refund of Rs.33,79,759/-. The lower authority had taken the ineligible credit on inputs and input services to be Rs.22,81,894/- on the basis of ER-2 return and had applied the same to the formula as per Rule 5 read with Notification No.27/2012-CE NT dated 18.6.2012. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A) who upheld the Order-in-Original.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the facts and documentary evidence on record. He further submitted that both the authorities have rejected the refund claim mainly on the ground that there was discrepancy in the amount of CENVAT credit availed as per refund application filed by the appellant and the credit availed as disclosed in the ER-2 returns. He further submitted that both the authorities have not bothered to appreciate the critical aspect that the appellant had maintained CENVAT credit account in terms of Rule 9 of the CENVAT Credit Rules 2004 and as per the records maintained by the appellant, the total CENVAT credit availed during the period was Rs.34,43,096/- though the appellant had stated only Rs.22,81,894/- in their ER-2 Returns. It is his further submission that the figures stated in ER-2 returns are not sacrosanct and the amounts specified therein sometimes do not match with the CENVAT credit account. He further submitted that both the authorities below should have considered the CENVAT credit account for deciding the claim of refund and not merely relied on ER-2 returns. He also submitted that both the authorities have acknowledged the fact that appellant had reversed total credit of Rs.34,43,095/- while claiming refund under Rule 5 of CENVAT Credit Rules, 2004 (CCR) and this fact has been stated by the applicant in their letter dated 3.2.2015. He further submitted that once the appellant has reversed credit of Rs.34,43,095/- then he is entitled to get the refund of the same amount and in order to prove his case the appellant has also produced the CA certificate as well as the CENVAT credit account register which shows that he has reversed a sum of Rs.34,43,095/- and he has only claimed the refund of Rs.33,79,759/-. The learned counsel placed reliance on the following case laws:
* Cararo Technologies India Pvt. Ltd. vs. CCE: 2015 (39) STR 673 (Tri.-Mumbai) * Serco Global Services Pvt. Ltd. vs. CCE: 2015 (39) STR 892 (Tri.-Del.) * Jagdamba Polymers Ltd. vs. CCE: 2010 (253) ELT 626 (Tri.-Ahmd.)
5. On the other hand, the learned AR reiterated the findings of the impugned order.
6. After considering the submissions of both the parties and perusal of the material on record, I find that the appellant has in fact reversed the CENVAT credit of Rs.34,43,095/- whereas inadvertently in the ER returns, he has shown Rs.22,81,894/-. To explain this discrepancy, he has produced the certificate of CA as well as the CENVAT credit account register maintained by him which clearly shows that he has reversed the credit of Rs.34,43,095/- but the learned Commissioner (A) has observed that the appellant has not given any explanation as to how the ER-2 monthly return and refund application are showing different CENVAT credit availed on input and input services. In my view the certificate issued by the CA as well as the CENVAT credit register clearly shows that the figure shown in the ER returns is wrong and the appellant has filed the refund claim of Rs.33,79,759/- and he has already reversed the credit of Rs.34,43,095/-. Therefore, in view of my discussions above, I find that the impugned order is not sustainable in law. Further, I find that the appellant has given proper explanation of this discrepancy. In view of this, I am of the view that the impugned order is not sustainable in law and the same is set aside by allowing the appeal of the appellant.
(Operative portion of the Order was pronounced in Open Court on 13/11/2017) S.S GARG JUDICIAL MEMBER rv...
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