Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Basti Sugar Mills Co. Ltd on 18 February, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No . 2536 of 2008-SM
Excise Cross Objection No . 32 of 2009-SM
[Arising out of Order-In-Appeal No. 78- CE/ALLD/2008 dated 14.10.2008 passed by Commissioner of Central Excise (Appeals), Allahabad]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2
Whether it should 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 Departmental authorities?
Yes
Commissioner of Central Excise. Appellants
Allahabad (UP)
Vs.
M/s. Basti Sugar Mills Co. Ltd. Respondent,
Appearance:
Shri R K Mishra, AR for the Appellants
Shri P K MIttal, Advocate for the Respondent
Date of Hearing /Decision: 18.2.2014
ORDER NO . FO/ 50644 /2014-SM(Br)
Per Ms. Archana Wadhwa:
Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal.
2. After hearing both sides duly represented by Shri R K Mishra, learned AR appearing for the appellant and Shri P K Mittal, learned advocate appearing for the respondent, I find that the respondents are engaged in the manufacture of sugar and were availing the benefit of Cenvat credit of duty paid on the capital goods. As per the finding of Commissioner (Appeals), wherever the waste and scrap arising out of cenvatable capital goods cleared by the respondents, duty was being paid by them and there was no dispute.
3. However, appellants during the period April 2006 to December, 2006 cleared waste and scrap without payment of duty. As per the appellant waste and scrap has arisen out of accumulated / collected dismantling of machines /machinery tin sheet MS plates, angles and bar etc. on which the Cenvat credit was availed by them. The original adjudicating authority agreed with the assessee that waste and scrap cleared by them was accumulated / collected due to wear and tear and dismantling of the machines but confirmed the demand of Rs. 23,71,358/- by observing that these are the items on which the respondents had availed the Cenvat credit. However, it is seen that instead of actually verifying the fact as to whether the Cenvat credit has been availed on them or not, adjudicating authority has himself observed that strong proof behind this concept is that almost all the sugar units are still taking and availing Cenvat credit on aforesaid items. The said order of the original adjudicating authority was set aside by Commissioner (Appeals). It is seen that respondents took a strong stand before the appellate authority reiterating their statement that capital goods out of which the waste and scrap has arisen were not cenvatable and no Cenvat credit was availed on the same. They also took a plea that the capital goods out of which waste and scrap has arisen were purchased by them before the period of introduction of Cenvat Credit Rules on capital goods.
4. It is seen that Commissioner (Appeals) has not examined the fact as to whether the capital goods out of which the scrap has arisen were cenvatable or not but instead allowed the appeal by following the Tribunals decision in the case of Pushpaman Forgings [2002 (149) ELT 490 (T)] as upheld by Apex Court as reported in [2003 (153) ELT A 89 (SC)]. I find that said decision relate to erstwhile Central Excise Credit Rules and was in respect of non-existence of mechanism for reversal of Cenvat credit. The present proceedings were in respect of Rule 3(5A) of the Cenvat Credit Rules, 2000 and as such, Tribunals decision relied upon by the Commissioner (Appeals) is not applicable to the same as rightly contended by the Revenue.
5. I further find that the issue required to be decided in the present appeal relates to factum of availment of Cenvat credit by the assessee in respect of capital goods out of which waste and scrap has arisen. As per the learned advocate, the onus to prove that such capital goods were Cenvat credit is upon the Revenue, in terms of various decisions of the Tribunal. Reference stand made by him to the Tribunals decision in the case of K M Sugar Mills Ltd. vs. CCE [MANU/CE/0802/2003 = 2004 (164) ELT 40 (Tri-Del)] and many others.
6. I find that inasmuch as the factual position does not stand verified either by the original adjudicating authority or by the Commissioner (Appeals), and the only dispute relates to verification of factual position, which according to the learned advocate stand clarified by him in his reply to the show cause notice, I deem it fit to set aside the impugned order and remand the matter to the original adjudicating authority with directions to verify the appellants claim of non-availment of Cenvat credit in respect of capital goods, out of which waste and scrap has arisen.
7. Revenues appeal is thus allowed by way of remand.
(Dictated & pronounced in the open Court )
( Archana Wadhwa ) Member(Judicial)
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