Custom, Excise & Service Tax Tribunal
M/S Trident Nariman Point (Unit Of Eih ... vs Commissioner Of Central Excise, ... on 29 September, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. IV Appeal No. E/1191/09 (Arising out of Order-in-Appeal No. SB(73)73/MI/2009 dated 2.9.2009 passed by the Commissioner of Central Excise (Appeals), Mumbai-I). For approval and signature: Honble Shri Anil Choudhary, 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Trident Nariman Point (Unit of EIH Ltd.) Appellant Vs. Commissioner of Central Excise, Mumbai-I Respondent Appearance: Shri Debashis Ghosh, Consultant for Appellant Shri V.K. Agarwal, Addl. Commissioner (AR) for Respondent CORAM: SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 29.09.2014 Date of Decision: 29.09.2014 ORDER NO. Per: Shri Anil Choudhary
This appeal is filed by the appellant, M/s Trident Nariman Point (Unit of EIH Ltd.), against Order-in-Appeal No. SB(73)73/MI/2009 dated 2.9.2009 passed by the Commissioner of Central Excise (Appeals), Mumbai-I.
2. The brief facts of the case are that the appellant, M/s Trident Nariman Point (Unit of EIH Ltd.), are engaged in manufacture of cakes pastries, cookies and chocolates at its hotel premises. The appellant is registered with the Central Excise Department. They had availed CENVAT Credit on furnace oil as an input, which was used for generating steam partly for the manufacture of said products, which they were clearing on payment of Central Excise duty. During the course of audit, it was observed that only 7-9% approx., out of the total steam generated is used to create humidity for baking products (excisable goods) like, cakes, pastries, cookies and chocolates. Rest quantity of the steam was used towards other activities outside the production area like, laundry, centralized air-conditioning, heating water supplied to hotel rooms etc. The issue raised by the department is that only the bakery/pastry division wherein the excisable goods are getting manufactured shall be regarded as factory of production as per definition of factory provided under section 2(e) of the Act and the other premises are not connected to the manufacture of excisable goods and hence, cannot be considered as factory. Accordingly, CENVAT Credit cannot be availed for other use of steam.
2.1 A show-cause notice dated 4.6.2007 was issued to the appellant for wrong availment and utilization of CENVAT Credit amounting to Rs.38,39,097/- for period October, 2002 to December, 2006, of which appellant had already reversed an amount of Rs.17,92,351/- on 01.04.2003 and an amount of Rs.62,19,387/- on 01.04.2004 totalling Rs.80,11,738/-. On adjudication, a demand of Rs.38,39,097/- was confirmed by the adjudicating authority with interest and an equal amount of penalty was imposed under Section 11AC of the Central Excise Act read with Rule 15(2) of Cenvat Credit Rules, 2004 read with Rule 25 of Central Excise Rules, 2002. Being aggrieved, the appellant filed an appeal before the Commissioner (Appeals), who was pleased to confirm the demand of Rs.35,31,969/- (38,39,097 8% of 38,39,097), as approx. 8% of the inputs have been used in manufacture of excisable goods, along with penalty of Rs.35,31,989/- and upheld the modified demand.
3. Being aggrieved, the appellant is in appeal before this Tribunal.
4. The learned Counsel for the appellant submits that the show-cause notice was issued on 4th June, 2007 for disallowing the credit availed during the period October, 2002 to Sept, 2006 by invoking the extended period of limitation. As per Section 11A(1) of the Act, the same is time barred since there was no mis-declaration of factory premises nor there was any suppression of facts with an intent to avail ineligible CENVAT Credit on the part of the appellant.
4.1 The learned Counsel further submits that in view of the precedent judicial pronouncements, the appellant was under bona fide belief that in case of furnace oil, CENVAT Credit is admissible, even if the same is partly used in non-dutiable purpose. Reliance is placed on the Tribunals decision in the case of Sudarsanam Spinning Mills 2004 (166) ELT 461 (Tri-Chennai) and the decision of the Hon'ble Gujarat High Court in the case of Gujarat Narmada Fertilizers Co. Ltd. - 2006 (193) ELT 136 (Guj) and also the decision of Hon'ble Apex Court in the case of Commissioner of Central Excise Vs. Gujarat Narmada Fertilizers Co. Ltd. 2009 (240) ELT 661 (SC).
4.2 The learned Counsel further submits that as per the definition of factory under Section 2(e) of the Act, it includes any premises and premises thereof wherein manufacturing process connected with production of goods, is being carried out. Hence, the boilers being used for generating steam partly used for baking of the excisable goods inside the hotel premises, would mean that entire hotel premises is factory. Further, the allegation that the appellant have mis-declared entire hotel as factory does not stands true as it was only after the examination of the appellants application for registration, wherein the list of goods to be manufactured were clearly mentioned that registration of entire hotel premises as factory has been granted by the authorities. Accordingly, it cannot be alleged that there was suppression of fact on part of the appellant. Accordingly, he pleads for setting aside the impugned order and allowing the appeal with consequential relief.
5. The learned AR appearing for the Revenue reiterates the findings of the lower authorities.
5. Having considered the rival contentions, I rely on para 13 of the Hon'ble Apex Court ruling in the case of Gujarat Narmada Fertilizers Co. Ltd.(supra), wherein it was held as under: -
13. It may be noted that litigation on interpretation of CENVAT Credit Rules has arisen on account of various conflicting decisions given by the various Benches of CESTAT, the reason being that the Rules have not been properly drafted in the circumstances, we are of the view that in this batch of cases no penalty is leviable.. Penalty under Section 11AC of the Central Excise Act, 1944 is imposable when there is any fraud, collusions, suppression or mis-declaration of facts on part of the appellant with intent to evade payment of duty. In the present case, I find that there is no suppression or mis-declaration of facts on part of the appellant with intent to evade payment of duty or to avail ineligible CENVAT Credit. Hence, I set aside the penalty imposed under Section 11AC of the Central Excise Act, 1944 read with Rule 15(2) of Cenvat Credit Rules, 2004 read with Rule 25 of Central Excise Rules, 2002 on the appellant. Since the appellant has reversed the credit wrongly availed on pointing out by the department, I direct the appellant to pay the interest till the date of duty was deposited or CENVAT Credit reversed.
7. Thus, the appeal is partly allowed in the above terms.
(Pronounced in Court) (Anil Choudhary) Member (Judicial) Sinha 5