Custom, Excise & Service Tax Tribunal
M/S. Durferrit Asea Pvt. Ltd vs Cce, Guntur on 23 April, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court I
Date of Hearing:23/04/2010
Date of decision:23/04/2010
Appeal No.E/62/09
(Arising out of Order-in-Appeal No.42/2008(T)CE dt. 18/11/2008 passed by Commissioner(Appeals), Guntur)
For approval and signature:
Honble Mr. M.V.Ravindran, 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?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Durferrit Asea Pvt. Ltd.
..Appellant(s)
Vs.
CCE, Guntur
Respondent(s)
Appearance Mr. V. Ravindran, Consultant for the appellant.
Mr. M. M. Ravi Rajendran, JDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is directed against Order-in-Appeal No.42/2008(T)CE dt. 18/11/2008.
2. The relevant facts that arise for consideration are that the appellants have claimed refund of Rs.77,150/- vide their letter dt. 10/03/2008, as the same was unutilized Cenvat Credit of duty paid by them during the period 1/4/2006 to 31/3/2007, in terms of Notification No.5/2006-CE(NT) dt. 14/3/2006 issued under Rule 5 of Cenvat Credit Rules, 2004. The refund sanctioning authority i.e. the Asst. Commissioner, Cuddapah Division, called for a report from the jurisdictional Range Officer, Cuddapah Range, seeking information as to whether the appellants had actually paid the amount, claimed as refund; whether they were eligible for refund of service tax; whether the refund now claimed was already claimed previously; whether there were any dues to the department; whether the provisions of unjust enrichment were applicable and whether the claim is in order. The Range Officer, in reply, had recommended for rejection of the said refund claim contending that the appellants were not registered for service tax purposes with the Cuddapah Division and that they had not produced any Centralised Service Tax registration; that they had failed to produce any record/register in support of their accumulation of credit. A show cause notice was issued to the appellants by the Asst. Commissioner, Central Excise, Cuddapah Division, asking them as to why their refund claim should not be rejected for the aforementioned reasons leading to violation of Rule 7 of the Cenvat Credit Rules, 2004 read with Rule 9 ibid; and also for violation of Rule 7 of Service Tax Credit Rules. The appellant herein contested the show cause notice and submitted that the Revenue was incorrect as the claim in question was in accordance with their earlier claim made and sanctioned pertaining to period August, 2005 to March, 2006. The adjudicating authority vide Order-in-Original dt.9/6/2008 rejected the refund claim filed by the appellant except for an amount of Rs.4094/-. Aggrieved by such an order, the appellant preferred an appeal before the ld. Commissioner(Appeals). Ld. Commissioner(Appeals), after granting an opportunity of personal hearing, came to the same conclusion and upheld the Order-in-Original.
3. Ld. Counsel appearing on behalf of the appellants submits that the only ground for rejection of refund is that the appellants had not followed the provisions of Rule 7 of the Cenvat Credit Rules, 2004 in as much that there is non-observance of procedure of distribution of credit. He would draw my attention to the Rule 7 of the Cenvat Credit Rules. It is his submission that as far as the appellant is concerned they do not have any other unit other than this EOU and in this unit also they do not have a sale/clearance to DTA. It is his submission that the reasons for accumulation of cenvat credit was because of the above two factors. It is submitted that in the background of the facts and allegation of violation of provisions of Rule 7 and non-observance thereof will not come in the way of the refund of the amount of credit. It is also his submission that the impugned order is contrary to the settled position as for an earlier period, the appellants refund claim on an identical issue was allowed. It is his submission that the impugned order be set aside and the refund be granted.
4. Ld. JDR on the other hand would submit and reiterate the findings of the ld. Commissioner(Appeals). He would specifically relied upon the findings in para 11 of the impugned order.
5. I have considered the submissions made by both sides and perused the records. I find that the issue involved in this case is whether the appellant is eligible for the refund of claim of the Cenvat Credit which got accumulated, on the bills which were raised in the name of the head office, despite the fact that the appellants head office was not registered as a service tax distributor and had not distributed service tax credit as per the laid down procedures in this regard. It is seen from the records and more specifically from para 10 of the impugned order, that it is not disputed that the appellant is eligible to avail the Cenvat Credit on the service tax paid on the input services and ld. Commissioner(Appeals) has held categorically that the documents were correct and there could not be any suspicion on such documents. Despite these findings, ld. Commissioner(Appeals) proceeded and upheld the Order-in-Original only on the ground that the bills and invoices were raised by the service provider, on the appellants Head Office and appellant having not followed the said statutory procedure, as laid down in the rule, would come in way of them from getting the refund. It is also the finding of the ld. Commissioner(Appeals) that if the procedure is not followed, then it would amount to availment of credit at various branches and on the strength of the bills in the name of the Head Office. I do not find any mention of this allegation in the show cause notice. It is a presumptious finding of the ld. Commissioner(Appeals). It is also to be noted that the provisions of Rule 7 can be brought into play only if the appellant wishes to get registered himself as input service credit distributor. If the appellant is not inclined to do so and if he does not have any more than one manufacturing unit, then there is no compulsion for him to work under Rule 7. It is seen from the record that the appellant was not having any other EOU during the period in question in this appeal, functioning in the state of Andhra Pradesh. Since a doubt was raised by the Revenue on this point, I had specifically directed the ld. DR to find out from the local authorities whether such unit was in existence in the jurisdiction of Asst. Commissioner of Central Excise & Service Tax, Cuddapah Division. Vide the letter dt. 25/3/2010, the office of the Asst. Commissioner, Central Excise, Cuddapah has categorically informed to the office of the Jt. CDR that in this connection, it is to submit that this office has no information / evidence regarding the existence of other units of M/s. Durferrit Asia Private Ltd., in the jurisdiction of Cuddapah Division.
6. It can be seen from the above reproduced portion of the letter that it is the presumption of the ld. Commissioner(Appeals) that the input credit can be availed at various units seems to be unsubstantiated and only is based on assumption.
7. Accordingly, in view of the findings, I find that the impugned order is liable to be set aside and I do so. Appeal is allowed with consequential relief, if any.
(Operative portion of this order pronounced on conclusion of hearing) (M.V.Ravindran) Member (Judicial) Nr ??
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