Custom, Excise & Service Tax Tribunal
M/S.Burn Standard Co. Ltd vs Commissioner Of Central Excise, Salem on 17 May, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/S/73/2009 and E/112/2009
[Arising out of Order-in-Original No.14/2008 (Commissioner) dated 18.11.2008 passed by the Commissioner of Customs and Central Excise, Salem]
For approval and signature:
Honble Smt. JYOTI BALASUNDARAM, Vice-President
Honble DR. CHITTARANJAN SATAPATHY, Technical Member
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 the Members wish to see the fair copy of :
the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities?
M/s.Burn Standard Co. Ltd.
Appellants
Versus
Commissioner of Central Excise, Salem
Respondent
Appearance :
Ms. L. Maithili, Adv.
Shri V.V. Hariharan, JCDR For the Appellants For the Respondent CORAM:
Honble Smt. Jyoti Balasundaram, Vice-President Honble Dr. Chittaranjan Satapathy, Technical Member Date of hearing : 17.05.2010 Date of decision : 17.05.2010 Final Order No.____________ Per Jyoti Balasundaram For the reasons recorded below, we waived pre-deposit of duty of Rs.52,63,061/- confirmed under Rule 14 of the CENVAT Credit Rules, 2004 representing 10% of the price at which the assessees sold Dead Burnt Magnesite and Calcined Magnesite, on the ground that Furnace Oil was a common input used in the manufacture of dutiable and exempted final products and that the assessees had not maintained separate accounts as contemplated under Rule 6(2) of the CENVAT Credit Rules, 2004, and penalty of equal amount imposed under Rule 15 and proceed to hear and decide the appeal itself at this stage, with the consent of both sides.
2. The issue involved in this appeal is whether a demand of 10% of the sale value of exempted goods can be made on the ground that Furnace Oil was used as a fuel both for the manufacture of non-dutiable intermediate goods, namely, Dead Burnt Magnesite which was partly sold in the market and partly consumed in the manufacture of dutiable final products, namely, refractory bricks and ramming mass. The period involved in the present case is Jan. to Mar.08. No CENVAT credit was taken on Furnace Oil used for the manufacture of Dead Burnt Magnesite during the months of Jan. and Feb.08. During the month of Mar.08, although CENVAT credit was taken, proportionate credit was reversed on the basis of actual unit consumption of Dead Burnt Magnesite. With effect from 01.04.2008, the provisions of Rule 6 were amended providing an additional option to an assessee not maintaining separate accounts for common inputs, to reverse the credit attributable to the exempted goods on the basis of the formula set out under Rule 6 (3A) which reads as under:-
3. As per the decision of the Tribunal in Foods, Fats & Fertilisers Ltd. Vs Commissioner of Central Excise, Guntur [2009 (247) E.L.T.209 (Tri.-Bang.)], this amendment being procedural, is held to be retrospective in operation. Further, the Finance Act, 2010 has retrospectively amended Rule 6 of the CENVAT Credit Rules, whereby reversal/payment of proportionate credit attributable to inputs used in the manufacture of exempted goods, either before or after the clearance of such goods is an option available to a manufacturer not maintaining separate records for receipt, consumption and use of common inputs, taking credit on common inputs used for manufacture of dutiable and exempted final products.
4. The reversal of credit for the month of Mar.08 is, therefore, required to be verified on the basis of the formula provided under Rule 6 (3A). For this purpose, we set aside the impugned order and remit the case to the adjudicating authority for carrying out the above verification. He shall pass fresh orders after extending a reasonable opportunity to the assessees of being heard in their defence.
5. The appeal is thus allowed by way of remand.
(Operative portion of the order was pronounced in open court on 17-05-2010) (DR. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM) TECHNICAL MEMBER VICE-PRESIDENT ksr 25-05-2010 ??
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