Custom, Excise & Service Tax Tribunal
M/S Porritts & Spencer (Asia) Ltd vs C.C.E., New Delhi on 12 September, 2013
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Court No.-3
E/3709/2005-EX[DB]
(Arising out of Order-in-Appeal No.89/CE/Appl/DLH-IV/2005 dated 16.09.2005 passed by Commissioner (Appeals) Central Excise New Delhi.
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would 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 Department Authorities?
Yes
Date of hearing: 12.9.2013
M/s Porritts & Spencer (Asia) Ltd. Appellant
Vs.
C.C.E., New Delhi Respondent
Present for the Appellant: Shri P.K.Mittal, Advocate Present for the Respondent: Shri M.S Negi, DR Coram:Mrs. Archana Wadhwa, Technical Member Honble Mr. Manmohan Singh, Technical Member FINAL ORDER NO.57804/2013 PER: Archana Wadhwa After hearing both the sides, duly represented by Shri P.K. Mittal, Advocate and Shri M.S. Negi, Departmental Representative, we find that the appellant received Capital Goods in their factory in the year 2001 and availed 50% of credit on 31.3.2001 in terms of the provisions under Rules 4(2) of Cenvat Credit Rule 2002. They were entitled to avail the balance 50% of credit in the next subsequent financial year. Accordingly appellant availed the balance credit on 04.12.2001. The dispute in the present appeal is availment of balance 50% of Cenvat credit in the financial year 2001-2002. Revenue contention is that in asmuch as the appellant has not actually installed and used the said goods in the manufacturer of final products, the Cenvat Credit could not have been availed by them on 04.12.2001. It is seen that the appellant had reversed the said credit on 26.02.2003 and availed the same again on 19.3.2004 after the capital goods were installed in the factory on 28.03.2003. There is no dispute of installment of capital goods in subsequent year 2004 and of availment of credit thereafter.
2. The Lower Authority vide impugned order dated 19.11.04 held that in respect of the Cenvat credit which was taken by the appellant on 04.12.2001 and reversed on 26.02.2003, they are liable to pay interest and to imposition of penalty. Accordingly penalty of Rs. 16,73,656/- has been imposed alongwith confirmation of demand of interest to the tune of Rs.4.89 lakhs.
3. After hearing both the sides we find that the disputes relates to interpretation of provisions of Rules 4(2) of the Cenvat Credit Rules. Revenue is not disputing the availability of the balance fifty per cent cenvat credit to the appellant after the installation of the capital goods. It is only the question of timing of availment of credit. Admittedly the capital goods were received by the appellant and were under the in possession. The said rule 4(2)(b) uses the expression "possession and use of the manufacture of final products". Revenue views are that the same should be put to actual use before the availing the credit. We find that the said disputed legal issue was the subject matter of Hon'ble Mumbai High Courts decision in the case of Commissioner of Central Excise, Raigad vs Ispat Industries Ltd. 2012(275) E.L.T. 79 (Bom.) vide which the Revenue appeal was rejected. In view of the above finding of the Hon'ble High Court the expressions possession and use had to be read together and once the goods are received, their actual installation and use may not be insisted upon. As the capital goods were admittedly received by the appellant and were ultimately installed and used in the manufacture of the final product, we are of the view that the appellant was entitled to avail the 50% of credit in the subsequent financial year 2001-2002. Consequently, no interest is liable to be confirmed against them and no penalty is liable to be imposed.
4. Accordingly the impugned order is set aside and appeal is allowed with consequential relief.
(Dictated & pronounced in open Court).
(ARCHANA WADHWA) MEMBER (JUDICIAL) (MANMOHAN SINGH) MEMBER (TECHNICAL) K .Gupta