Custom, Excise & Service Tax Tribunal
Cce, Jaipur-I vs M/S Hindustan Copper Limited on 28 October, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi. Date of hearing: 18.10.2016 Pronouncement on: 28.10.2016 E/C.O./56952/2013 and Excise Appeal No. 55485 of 2013 (Arising out of order-in-appeal No. 166(RDN)CE/JPR-I/2012 dated 12.11.2012 passed by the Commissioner (Appeals) Central Excise & Customs, Jaipur-I). CCE, Jaipur-I Appellant Vs. M/s Hindustan Copper Limited Respondent
Appearance:
Sh. Yogesh Agarwal, AR for the Revenue Sh. Ankit Totuka, Advocate for the Respondent - Assessee Coram:
Honble Justice (Dr.) Satish Chandra, President Honble Shri B. Ravichandran, Member (Technical) Final Order No. 54594/2016 Per: B. Ravichandran:
The Revenue is in appeal against order dated 12.11.2012 of Commissioner (Appeals), Jaipur. The respondents-assessee are engaged in the manufacture of Copper Cathode and were availing cenvat credit on inputs and capital goods in terms of Cenvat Credit Rules, 2004. They were sending copper concentrate, Cathode (secondary), Anode Scrap etc. for conversion into copper to M/s SWIL Limited, Bharuch on job work basis. The department entertained a view that the respondents-assessee are violating the provisions of Cenvat Credit Rules, 2004 as they are not paying amount equal to cenvat credit attributable to the inputs which were not received back from the job worker. Accordingly, a duty demand of Rs. 47,08,097/- was made on the respondent. The case was adjudicated resulting in confirmation of the said demand. On appeal, the Commissioner (Appeals) vide the impugned order set-aside the demand. Against this order, the Revenue filed the present appeal.
2. We have heard the ld. AR for the Revenue and ld. Counsel for the respondent. The Revenue is contesting the findings in the impugned order on the ground that the copper residue valued at Rs.2,88,48,632/- was never received back by the respondent even after 180 days. As such, it was contended that the duty attributable to that value is recoverable under Rule 14 of Cenvat Credit Rules, 2004. The finding in the impugned order regarding time bar also is contested.
3. To begin with we note that the appeal by Revenue is on frivolous legal grounds with no legal or factual basis.
4. We have perused the impugned order. The findings as recorded by Commissioner (Appeals) relevant, both on merit as well as time bar, is as under:
12. From the above I find that adjudicating authority has held in the impugned order that cenvat credit of Rs. 47,08,097/- was recoverable from the appellant under Rule 14 of the Cenvat Credit Rules, 2004 as alleged in the notice. Whereas, on perusal of the impugned SCN it is not clear as to how much quantity was retained by the job worker and what was amount of cenvat credit involved in the inputs retained. The demand in the present case was worked out on the amount deducted by the appellant from the Tolling charges of job worker, which is not the amount of cenvat credit attributed to the inputs retained by the appellant. Further, I also find that appellant had removed/ sent waste of the copper i.e. Copper concentrate, Liberation Cathode (secondary), Copper bearing jam, ladle skull, flush Furnace & converter slag, Bosch tank dust, Scrubber dust (wire bar plant), Revert and anode scrap etc. for conversion into copper which is classifiable under chapter heading No. 7404.90 of the Central Excise Tariff Act, 1985 and was dutiable at the rate of 16%. The said goods were neither input nor capital goods, these were waste and scrap of the copper and sent to the job worker for conversion. In the instant case cenvat credit involved in the goods sent for job work and retained by the job worker was not worked out by the department as these were neither input nor capital goods. In such a situation department has to charge duty on the value of goods removed for job work without payment of duty under the provisions of Central Excise Rules, 2002 not the Cenvat Credit Rules, 2004. Therefore, I hold that demand of duty under Rule 14 of the Cenvat Credit Rule can only be made for the amount of cenvat involved in the input or capital goods. In the present case demand has been raised on the amount of waste/ residue/ slag retained by the job worker, which should be demanded as per provisions of Central Excise Rules, 2002. Thus the demand is not sustainable as the same has not been made under appropriate provisions of law.
13. The appellant also contended that the period involved in the case was 2004-05 and the SCN has been issued on 16.4.2007 which is beyond the period of limitation and also the SCN has not involved provisions, there is no allegation of suppression of facts with intent to evade duty. In this regard after going through the impugned SCN, I find there is not even a whisper about appellants wilful misstatement, collusion, fraud to attract the proviso to Section 11A(1) of the Act in the SCN. Further, demand has not been raised by invoking the provisions of proviso to Section 11A(1) of the Act. Therefore, I hold that demand is time barred in absence of allegation of suppression of facts being spelt out in the notice.
5. In view of the clear finding that the department did not identify which type of inputs were retained by the job worker it is not at all tenable to invoke Cenvat Credit Rules, 2004 to demand and recover certain amount of credit. We find the proceedings against the respondent are devoid of merit as well as hit by time bar. The present appeal against the impugned order has no merit. Accordingly, the same is dismissed. The Cross-appeal filed by respondent is also disposed of.
(Pronounced on 28.10.2016).
(Justice (Dr.) Satish Chandra) President (B. Ravichandran) Member (Technical) Pant