Custom, Excise & Service Tax Tribunal
Cce, Panchkula vs Alpha Drugs & Pharmaceuticals on 13 June, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
SCO 147-148, SECTOR 17-C, CHANDIGARH-160017
SINGLE MEMBER BENCH
Court-II
Appeal No.E/1625/2009
(Arising out of OIA No.1124/ANS/PKC/09 dt.6.5.2009 passed by the CCE(Appeals), Delhi-III, Gurgaon)
Date of hearing: 14.02.2017
Date of Decision:13.06.2017
CCE, Panchkula Appellant
Vs.
Alpha Drugs & Pharmaceuticals Respondent
Present for the Appellant: Shri Satyapal, AR Present for the Respondent: Shri R.k.Phillips, Advocate Coram: Honble Mr.Devender Singh, Member (Technical) FINAL ORDER NO. 61061/2017 PER: DEVENDER SINGH M/s.Alpha Drugs and Pharmaceuticals, Plot No.176, Sector-3, Karnal has been engaged in the manufacture of medicines falling under CETH 3004 of Central Excise Tariff Act, 1985 and has been availing the benefit of Cenvat Credit Rules, 2004. The party first defaulted in payment of Central Excise duty in the month of March, 2005 and subsequently on 12 occasions. They had defaulted in payment of Central Excise duty amounting to Rs.46,20,549/- during the period March, 2005 to June, 2006. As per the Central Excise Rules prevalent at that time, an order dated 01.06.2005 was issued by the then jurisdictional Assistant Commissioner requiring the party to pay the Central Excise duty on consignment basis trough PLA at the time of clearance of goods for two months or till the payment of defaulted amount whichever is later. As per Rule 8(3) of Central Excise Rules, 2002 as was in force at that time, the party was restricted for utilization of Cenvat credit till the default amount is paid or 2 months from the date of order, whichever is later. The party could not pay the Central Excise duties within the stipulated time and similar orders were issued for subsequent defaults on 28.7.2005 and 08.12.2005 respectively. Thus total duty amounting to Rs.46,20,549/- and interest thereon remained unpaid due to default.
2. On account of failure to pay the defaulted amount of Central Excise duty and interest, the recovery proceedings were initiated against the party.
3. As a result of recovery proceedings, an amount of Rs.41,518/- was recovered by adjustment from the refund claim of the party. The party deposited Rs.5 lacs, Rs.10 lacs, Rs.9.94 lacs and Rs.20,92,136/- on 17.03.08, 13.05.08, 27.05.08 and 31.10.08 respectively, against the defaulted amount. The said party also paid interest of Rs.16,61,224/- in respect of defaulted amount on 11.11.08.
4. Due to default in payment of Central Excise duty, the party was restricted not to utilize the Cenvat credit, during the period of default. As on 31.03.08 the party was having unutilized Cenvat credit of Rs.20,85,030/- as balance.
5. The respondent filed a refund claim of Rs.20,85,030/- for refund of unutilized Cenvat credit lying as on 31.03.2008 vide their application dated 06.05.06 received in the division office on 08.05.08. As they did not submit original duty paying documents in support of their claim and also did not mention the provisions of Central Excise Law. Under which the refund claim has been filed, the refund claim was returned in original to the party for rectification of defects. The party vide their application dated 26.09.2008 received in the division office on 30.09.08 re-submitted claim along with the RG-23A Part II account, mentioning that the claim has been filed under section 11B of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004, as amended and made applicable to units which are closed/that cannot use Cenvat credit. Aggrieved by the said order, the respondent went in appeal before the Commissioner (Appeals) who vide Order-in-Appeal No.124/ANS/PCK/2009, dated 06.05.2009 allowed the appeal of the party. Aggrieved from the same, the Revenue has filed this appeal.
6. Heard both parties at length and examined the records.
7. I find that the Commissioner (Appeals) has recorded in para 5 of the said order that the facts are not in dispute and that the contention put forth by the appellant are also not disputed as is revealed by the impugned order.
8. From the statement of facts and grounds of appeal of the Revenue, I find the following grounds which are disputing the facts:
1.3 During the period of default, the party even intended to sell the factory as is evident from letter No. HSIIDC/STATE: KLP: 2007:13562 dt.21.09.2007 of M/s. Haryana Industrial Development Corporation Limited, Panchkula, addressed to the party. In event of sale or transfer of the factory to some other person, the utilized Cenvat credit could be utilized by the transferee for payment of central excise duty on the final product, in terms of Rule 10 of the Cenvat Credit Rules, 2004. There was no restriction by the central excise department for payment of duty utilizing the Cenvat credit after full and final payment of the defaulted amounts, along with interest. The Commissioner (Appeals) overlooked this aspect.
1.4 The party had mis-represented the facts before the Commissioner (Appeals), regarding surrendering of their central excise registration. In fact due to defaults in payment of central excise duty, there were Govt. arrears pending recovery from the party and as such, the case of the party was not ripe for surrendering of central excise registration in terms of declaration prescribed under clause (6) of the notification No.35/2001-CE (NT) dt.26.6.01 (as amended), issued under Rule 9 of the Central Excise (No.2) Rules, 2001. An important part of the surrender of central excise registration is the declaration by the registrant and that there is no govt. due pending against the registrant and that there is no demand pending against them under the Central Excise Act, 1944. Whereas in the instant case Govt. due to the tune of Rs.46,20,549/- (collected from the customers but not deposited with the Govt.) were pending recovery against the party. This fact was not taken into consideration by the Commissioner (Appeals).
9. From the above, it is clear that the relevant facts in this case are clearly disputed and need proper verification. Accordingly, the matter needs to be re-examined afresh by the Commissioner (Appeals) in order to verify and establish the facts. If needed the Commissioner (Appeals) may go through the relevant records from the field office so that that disputed question of facts are settled first and then pass a reasoned order after giving fair opportunity to both sides to present their case.
10. The appeal is disposed of by way of remand.
(pronounced in the court on 13.06.2017) (DEVENDER SINGH) MEMBER (TECHNICAL) mk 4