Custom, Excise & Service Tax Tribunal
M/S. Karamchand Appliances Pvt. Ltd vs Cce, Chandigarh on 11 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 1354 OF 2007-SM [Arising out of Order-in-Appeal No. 33/CE/CHD/2007 dated 15.02.2007 passed by the Commissioner (Appeals), Central Excise, Chandigarh] For approval and signature: Honble Mr. P.K. Das, 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 would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Departmental authorities? M/s. Karamchand Appliances Pvt. Ltd., Appellants Vs. CCE, Chandigarh Respondent
Appearance:
Shri Shekhar Vyas, Advocate for the Appellants;
Shri S.N. Srivastava, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 11th June, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
The relevant facts of the case, in brief, are that the appellants are engaged in the manufacture of Mosquito Repellants & apparatus falling under Chapter 85 & 38 respectively of the schedule to the Central Excise Tariff Act, 1985.
2. They availed Cenvat credit of two Inspection Moulds and sent to Radian Polymers Pvt. Ltd., Ghaziabad for job work. The goods were not returned within 180 days. Therefore, demand was raised for Rs. 1,21,956/- and penalty was imposed of equal amount of duty which were upheld by the Commissioner (Appeals).
3. Learned Advocate on behalf of the appellants submits that Rule 4(5) of Cenvat Credit Rules, 2004 provides reversal of credit if the goods sent to the job worker is received back within 180 days of their being sent to job worker. He submits that there is no need of reversal of credit on goods sent to job worker as per Rule 4(5) (b) of the Rules. He also relied upon the CBEC Excise Manual of Supplementary Instructions 2005. He further relied upon the decision of the Tribunal in the case of CCE & C, Daman, Vapi vs. Guala Closures (I) Pvt. Ltd., reported in 2009 (237) ELT 493 (Tri.-Ahmd.).
4. Learned D.R. reiterates the findings of the Commissioner (Appeals). He submits that the appellants have not received Moulds sent to the job worker within 180 days and attempted to produce the invoices only without receiving the goods. He also submits that the appellants did not claim the benefit of Rule 4(5)(b) of the Rules at the time of detection of discrepancy by the Central Excise officers. He also submits that the appellants issued challan for job work of the moulds showing that the goods will be returned back within 180 days.
5. After hearing both sides and on perusal of the records, I find that there is no dispute that the appellants availed credit on moulds sent to the job worker. Clause (b) of Rule 4(5) of the Rules provides that Cenvat credit shall also be allowed in respect of moulds and dyes sent by the manufacturer of final product to a job worker for the production of goods on his behalf and according to his specification. There is no condition in said clause of the Rule that it will be returned within 180 days. Para 2.5(5) of Chapter 5 of CBEC Excise Manual of Supplementary Instructions 2005 clarifies as under:-
(5) The CENVAT credit is allowed in respect of jigs, fixtures, moulds and dies sent by a manufacturer of final products to a job worker for the production of goods on his behalf and according to his specification. The condition of return within 180 days as per clause (a) of sub-rule (5) is not applicable to such jigs and fixtures, moulds and dies when sent to a job worker for production of goods on behalf of principal manufacturer.
6. In this case there is no dispute that the appellants cleared Dyes to the job worker and in view of CBEC instruction there is no requirement to return the Dyes within 180 days. Therefore, demand of duty and penalty is not sustainable. I also found that in an identical issue the Tribunal in the case of Guala Closures (I) Pvt. Ltd. (supra) held that there is no condition under Rule 4(5) (b) of Cenvat Credit Rules, 2004 that moulds sent by assessee have to be brought back within 180 days and rejected the appeal filed by the Revenue.
7. In view of the above discussion, I find that the impugned order is not sustainable and accordingly, the same is set aside. Appeal is allowed with consequential relief.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK