Customs, Excise and Gold Tribunal - Mumbai
Hindustan Coca-Cola Beverage Pvt. Ltd. vs Commissioner Of Customs And Central ... on 20 February, 2003
ORDER J.H. Joglekar, Member (T)
1. These two applications relate to two appeals both arising out of the order. These are, therefore, taken up together for disposal. The applicants manufacture aerated water and fruit pulp or fruit juice based drink bearing the brand name "Maaza". From 01/03/2001, "Maaza" was exempted from duty. The applicants were availing of modvat credit on common inputs used in their products as also on the machinery. Rule 57AD of the CE Rules, 1944, provided for maintaining separate accounts of common inputs and for taking credit only on those inputs, which were intended to go into the dutiable products, in the alternative, the exempted products would attract duty at the rate of 8%. The appellants, however, continued to clear "Maaza" without paying such duty.
2. Show cause notice was issued seeking recovery of Rs. 59,37,801/-under Rule 57AD(2) (b) read with 57AH of the Central Excise Rules, 1944. 50% of the modvat credit availed on capital goods of Rs. 34,55,840/- was also sought to be recovered, in terms of 57AH of the said Rules read with Section 11A of the Central Excise Act, 1944. Penalty was alleged under Rule 173Q.
3. After hearing the assessee, the Commissioner passed the impugned order. The assessee cited Tribunal judgment in the case of Pushpam Forgings v. Commissioner Mumbai-VII. The Commissioner held that the law having been extensively reworded, the Revenue had the authority to make such recovery and of the ratio of the judgment did not apply. In preference to recovering the quantum of modvat credit utilized, he choose to recover duty at the rate of 8% in terms of Rule 57AD (2) (b) He declined to reduce the amount on the ground that Octroi duty were also required to be deducted by quoting the wording of the same Rule which provided for deduction of only sales tax and other taxes.
4. As regards the denial of credit on capital goods, the assessee claimed that right was vested with them under Rule 57AC which could not be taken away by 57AD. The Commissioner held otherwise and confirmed both the demands. He imposed a total penalty of Rs.87,72,298/- on the assessee and also penalty of R.50,000/- on Shri Kapoor. Hence, the appeals and the present applications.
5. Shri Nankani relies upon the Kerala High Court judgment in the case of Premier Tyres Ltd., (2001 (130) ELT 417 (Ker). In this case modvat credit was taken at the time when the final goods were dutiable but which were later exempted from duty. It was held that the credit could not be reversed on this ground.
6. It was his plea that what is prescribed to be paid under Rule 57AD (2) (b) of the rules is neither the duty of excise nor Cenvat credit and therefore, the provisions of Rule 57AH do not empower the recovery of duty. He stated that these rules are later incarnations of Rule 57CC and 571, which had come to the notice of the Tribunal in the cited case of Pushpam Forgings.
7. He further submitted that the credit attributable to the inputs after 01/02/2000, was not utilized by them and that part of it was reversed, it was his further submission that the Commissioner had not permitted reduction on account of octroi duty.
8. As regards the capital goods credit, he stated that a number of judgment placed before the Commissioner had not been considered by him and in this manner he arrived at a wrong conclusion.
9. On perusal of the proceedings we find that a prima facie case has been made out by the applicants. We, therefore, grant the prayer and waive the pre-deposit of duty confirmed and penalty imposed.