Custom, Excise & Service Tax Tribunal
Unichem Laboratories Ltd vs Commissioner Of Central Excise, Mumbai on 5 October, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. E/858/08 (Arising out of Order-in-Appeal No.SRK/303 & 304/RGD/2008 dated 14.5.2008 passed by the Commissioner (Appeals) Central Excise, Mumbai Zone-II For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
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 Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Unichem Laboratories Ltd.
:
Appellants
VS
Commissioner of Central Excise, Mumbai.
Respondents
Appearance
Shri V.S. Sejpal , Advocate for Appellants
Shri Manish Mohan, SDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of hearing : 05/10/2010
Date of decision : /11/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
The appellants are in appeal against the order of Commissioner (Appeals) wherein the refund claim filed by the appellant was denied holding that the appellant has not challenged the order wherein the appellants were directed to reverse the Cenvat credit as held by the Supreme Court in the case of Priya Blue Industries Vs. CC(P) reported in 2004 (172) ELT 145 (S.C.).
2. The facts of the case are that the appellants applied for remission of duty under Rule 21 of the Central Excise Rules 2002 for the goods which were unfit for home consumption and marketing. The appellants reverse the Cenvat credit involved on inputs used for which remission is claimed on 25.7.2006 and 13.11.2006. Later on, relying on the decision of the Larger Bench of this Tribunal in the case of Grasim Industries Vs. CCE, Indore reported in 2007 (208) ELT 336 (Tri.LB) wherein it was held that reversal of credit on inputs is not required as per law, the appellants filed the refund claim of the Cenvat credit reverse by them on 25.7.2006 and 13.11.2006. Thereafter, a show cause notice was issue on 26.7.2007 proposing rejection of refund claim. On 16.10.2007 the refund claim was rejected by the Assistant Commissioner. On appeal the Commissioner (Appeals) also rejected the refund claim with these observations as long as the order under which the credit was reversed was not modified, the refund was not admissible as held by the Supreme Court in Priya Blue Industries (supra). Therefore, the rejection of refund claim has to be upheld. Aggrieved from the said order, the appellant is in appeal before this Tribunal.
3. The learned Advocate appearing on behalf of the appellants submitted in this case the impugned order has been passed without appreciating the fact that the appellant has filed the refund claim on 16.7.2007 much prior to decision of the Commissioner dated 1.10.2007 and the order rejecting the refund claim by the Assistant Commissioner on 16.10.2007 does not relying on the decision of the Commissioner dated 1.10.2007. Hence, the decision of the Commissioner dt. 1.10.2007 have no relevance to the case of rejection of refund claim by the Assistant Commissioner. Further, he submitted that as the refund claim has been filed by the appellant before the order passed by the Commissioner granting remission of duty with the condition of reversal of Cenvat credit under Rule 3(5C) of the Cenvat Credit Rules 2004 have not to be considered by the Commissioner (Appeals). Hence, the impugned order is to be set aside with consequential relief.
4. On the other hand the learned DR submitted that while the Commissioner (Appeals) was hearing the issue before him the order of the Commissioner asking the reversal of the credit to the appellant was not in forced against which no appeal has been filed by the appellant and same has attained finality. In that circumstances, the Commissioner (Appeals) has rightly denied the refund claim hence relying the decision of the Apex Court in the case of Priya Blue (supra).
5. Heard and considered.
6. On careful examination of the submissions made by both the sides and relevant records placed before me I find that in this case the appellant has applied for remission of duty under Rule 21 of the Central Excise Rules, 2002 on 15.6.2006. Thereafter the appellant reverse the Cenvat Credit availed on the inputs used for which remission is claimed on 25.7.2006 and 13.11.2006 which is not in dispute. On 16.7.2006 (when the appellant realized that as per decision of the Larger bench of this Tribunal in the case of Grashim Industries Ltd., the appellant is not required to reverse the Cenvat Credit on the inputs involved) filed the refund claim. While dealing with the said refund claim the adjudicating authority (Assistant Commissioner) denied the refund claim by holding as under:-
I find that the claimant have been granted remission of duty by Commissioner on goods which could not be sold as expired and unfit for human consumption and marketing and has permitted destruction of such goods on the condition that the Cenvat availed on inputs is reversed in terms of sub-rule (5C) of Rule 3 of Cenvat Credit Rules, 2004.
I, also find that the claimant are not entitled to refund of Cenvat credit already reversed especially as permission of remission of duty has been granted to them. In terms of Boards Circular No. 800/33/2004-CX, dt. 1.10.2004, and sub-rule (5C) of Rule 3, of Cenvat Credit Rules, 2004, they are required to reverse the Cenvat credit taken on inputs used in the manufacture of goods, the payment of duty on which is ordered to be remitted under Rule 21 of the Central Excise Rules, 2002.
Against those findings the appellant preferred an appeal before the Commissioner (Appeal) the Commissioner (Appeal), has not gone into the merits of the case but denied the refund claim holding that the order of the Commissioner dated 1.10.2007 directing to the appellant to reversal of credit was not modified. Hence, the refund claim is not maintainable.
7. In fact, when the appellant filed the claim for refund of the reversal of Cenvat credit on inputs, at that time no condition was imposed by the Commissioner while entertaining the remission of duty claim to reverse the Cenvat Credit availed. The application of refund claim was in time and has to be entertained by the Assistant Commissioner in the light of the decision of the Grashim Industries Ltd. (supra), which he failed to do so. On appeal also, the Commissioner (Appeal) failed to consider the contentions of the appellant in light of the decision of this Tribunal in the case of Grashim Industries (supra). Accordingly the impugned order deserves no merit, hence the same is set aside and matter is send back to the adjudicating authority to pass an appropriate order after considering the refund claim filed by the appellants in the light of the decision of Grashim Industries Ltd. (supra) after giving reasonable opportunity to the appellants to present their case.
8. With these observations, the appeal is allowed by way of remand.
(Pronounced in court on /11/2010)
(Ashok Jindal)
Member (Judicial)
Sm
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