Custom, Excise & Service Tax Tribunal
M/S Nirma Limited vs C.C.E. & S.T.-Bhavnagar on 3 January, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Zonal Bench 2nd Floor, Bahumali Building, Nr Girdharnagar Bridge, Asarwa Ahmedabad 380 004 Appeal No. : E/10969/2017 Arising out of OIA-BHV-EXCUS-000-APP-269-16-17 dt 27/03/2017 passed by the Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-RAJKOT M/s Nirma Limited - Appellant(s) Vs C.C.E. & S.T.-Bhavnagar - Respondent(s)
Represented by For Applicant(s) : Shri Vikram Singh Jhala, Authorised Signatory For Respondent(s): Shri K J Kinariwala, Authorised Representative CORAM :
Shri M V Ravindran, Hon'ble Member (Judicial) Date of Hearing / Decision : 03/01/2018 ORDER No. A/10106 / 2018 Per : Shri M V Ravindran, This appeal is directed against OIA-BHV-EXCUS-000-APP-269-16-17 dt 27/03/2017 passed by the Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax-RAJKOT.
2. Heard both sides and perused the records.
3. On perusal of the records, it transpires that the issue is regarding the reversal of proportionate Cenvat Credit attributable to the exempted goods manufactured and cleared by the appellant.
4. The appellant herein is a manufacturer of Soda Ash a dutiable product and Common Salt, an exempted product, the appellant utilized the input services of Goods Transport Agency for transportation of coal and lignite to the factory premises; coal and lignite is used for the production of electricity which is used for the manufacturing of Soda Ash and Common Salt. During the audit, it was noticed that they availed Cenvat Credit on the Input Services as indicated herein above, accordingly, audit party raised a demand note for the period 2005-06 to 2011.
5. The appellant on being pointed out, reversed an amount Rs 5,03,789/- for the proportionate credit attributable to manufacture of common salt, alongwith interest. Show cause notice dtd 9.10.2010 was issued for recovery of Cenvat Credit for the period of 2005-06 to 2011 and imposition of penalty. The Adjudicating Authority after due process of law dropped the demands pertains to 2005-06 October 2007 confirmed. demand for the period upto October 2007 - March 2011. The appellant contested the matter before the first Appellate Authority on merit as well as on limitation. The First Appellate Authority rejected the appeal.
6. The Ld representative submits that on merits they are not contesting the demands on merits, but are contesting the same on limitation. As the demands for the period Oct. 2009 to December 2010 is hit by limitation in as much, their factory records were audited by the same auditors three times during the period. The said audit took place during April 2009 and January, 2010. It is his submission that the judgment of the Apex Court in the case of CCE Bangalore vs Pragati Concrete Products Pvt Ltd - 2015(322) ELT.819(SC) is squarely on the point as also judgment of Honble High Court of Karnataka in the case of CCE, Bangalore vs MTR Foods Ltd - 2012(282)ELT.196 (Kar) wherein the law has been settled stating imposition of penalty does not arise in the case where audit of records were conducted.
7. But the Ld DR submits that the audit party may not have been extended the benefit of privilege looking at all producing all these documents and the audit of Cenvat credit is based on EA 2000 audit which may not be considering these points during the course of audit, both the lower authorities have not addressed any findings on the question limitation.
8. On careful consideration of the submission of both sides and records, appellant is contesting demand for the period Oct. 2007 to Dec. 2009 only on the ground of limitation. The claim of Ld DR that the demand for the period by limitation seems to be correct as it is seen from the records that the audit party of the Dept. of Revenue had conducted EA 2000 audit in 2009 and June 2010 and during the course of both the audits, the points as raised in the show cause notice even if arose were not raised. I find that the law is now fairly settled on these points by the decision of the Apex Court in the case of Pragati Concrete Products and MTR Foods Ltd (supra).
9. As against such authoritative binding of Honble High Court and it is surprising to note both the lower authorities has recorded the findings on limitation against the appellant, only on a very flimsy reasoning that the audit party may not have produced all the records. In my view both the authorities have followed the law as has been laid down by the higher judicial forum. It is tantamount to nothing but reaching a conclusion that the impugned order is incorrect and liable to set aside. The impugned order is set aside and the appeal is allowed.
10. For the demand raised for the period Oct.2007 to Dec. 2009 as is contested by the appellant reversed by the appellant on being pointed by the audit has appropriated since the appellant has reversed on being pointed out by the audit party alongwith interest, I find no penalty requires to be imposed on the appellant accordingly the impugned order is set aside.
11. Appeal stands disposed of as indicated above.
(Dictated and pronounced in the open Court) (M V Ravindran) Member (Judicial) swami 4