Custom, Excise & Service Tax Tribunal
M/S. Devashree Ispat Pvt. Ltd vs Cc,Ce&St, Hyderabad-Iii on 20 January, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No.E/162/2012 (Arising out of Order-in-Appeal No.70/2011(H-III)CE dt. 28/08/2011 passed by CC,CE&ST(Appeals-I), Hyderabad) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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? 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? M/s. Devashree Ispat Pvt. Ltd. ..Appellant(s) Vs. CC,CE&ST, Hyderabad-III ..Respondent(s)
Appearance Shri P. Dwarakanath, Consultant for the appellant.
Shri TJS Prabhakaran, Authorised Representative for the respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing:20/01/2016 Date of decision:20/01/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] The appellants are engaged in the manufacture of MS ingots, TMT bars and are registered with Central Excise department. They are availing CENVAT credit facility.
2. It is the case of the appellants that the Range Officer vide letter dt. 12/10/2009 directed the appellants to pay an amount of Rs.10,80,843/- as the credit wrongly availed on structural items treating them as capital goods. In obedience to the direction, the appellants reversed the credit under protest and informed the reversal to department. It is submitted that except a letter from the Range Officer, the appellants were not issued any show-cause notice alleging wrong availment of credit. The appellants were of the view that credit on these items was admissible and that reversal of credit was not necessary. Further, the department had not issued any show-cause notice raising demand of wrongly availed credit though the credit was reversed under protest. The appellants then filed an application for refund of the duty paid along with interest. Upon this a show-cause notice dated 16/09/2010 was issued to them proposing to reject the refund claim alleging that the credit availed on MS items is not admissible. The appellants did not file any reply. The matter was adjudicated and the original authority rejected the refund claim. The appellants filed appeal before the Commissioner(Appeals) who vide the order impugned herein upheld the order of rejection of refund passed by primary authority. Being aggrieved, the appellants have preferred this appeal.
3. The learned consultant Shri Dwarakanath appearing for the appellants submitted that the MS items were used for fabrication of parts / components / accessories of capital goods and credit is admissible. That the availment of credit was not objected to by the department as they have not issued any show-cause notice. The department issued show-cause notice only when appellants filed claim for refund of the amount paid under protest. Appellants produced documents and photographs before the Commissioner(Appeals) to establish that the credit has been rightly availed. It is urged that the refund has been wrongly rejected as there was no show-cause notice alleging wrong availment of credit.
4. Against this the learned AR supported the findings in the impugned order and contended that the refund claim has been rightly rejected.
5. On perusal of records, it is seen that department has not issued any show-cause notice proposing to deny the credit taken on MS items. The appellants reversed the credit pursuant to a letter issued by Range Officer. The same was reversed under protest and thereafter they filed a refund claim. A show-cause notice was then issued proposing to reject the refund claim. It is seen that appellants did not file any reply to this show-cause notice, explaining the use of MS items. The adjudicating authority is seen to have passed the order-in-original that credit is not admissible basing on available records. In such a situation, I am of the view that it is a fit case for remand. The appellant is to be given a chance to file reply and substantiate their contention that credit has been rightly availed on the MS items. The matter is therefore remanded to the adjudicating authority for de novo adjudication, who shall consider the matter in the light of the judgments laid in Mundra Ports & SEZ ltd. Vs. CCE [2015(39) STR 76 (Guj.)] and in India Cements ltd. Vs. CESTAT, Chennai [2015(321) ELT 209 (Mad)] and shall decide the issue of eligibility of credit while considering the issue of refund.
5. The appeal is allowed by way of remand.
(Operative part of this order was pronounced in the court on conclusion of hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Raja.
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