Custom, Excise & Service Tax Tribunal
M/S. Pooja Forge Ltd vs Cce, Delhi on 30 December, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Excise Appeal No. 1818/2011-EX[SM]
[Arising out of Order-In-Appeal No. 35/CE/Appl/DLH-IV/2011 Dated 19.04.2011 passed by CCE, Delhi]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
M/s. Pooja Forge Ltd. Appellant
Vs.
CCE, Delhi Respondent
Coram: Honble Ms. Archana Wadhwa, Judicial Member Appearance:
Shri Jaydeep, Advocate for the Appellants Shri B.B. Sharma, AR for the Respondent Date of Hearing: 05.11.2013 Date of Decision: 30.12.2013 FINAL ORDER NO._58702/2013_ Per Ms. Archana Wadhwa:
Brief facts of the case are that during audit of records of the appellant, it was noticed that appellant was clearing imported raw material/inputs to its own Unit-ll on reversal of CENVAT Credit under Rule 3(5) of the Cenvat Credit Rules, 2004 but actual amount of CENVAT Credit taken on such inputs was not reversed at the time of removal of inputs as such, which resulted in short reversal of CENVAT Credit amounting to Rs. 49,03,104/- during the period 2007-08 & 2008-09 (upto December, 2008). On pointing out the deficiency of short reversal by the audit party, the appellant debited the CENVAT Credit on account of raw material/inputs cleared to Unit-ll and also paid interest of Rs. 2,01,715/- out of total interest Rs. 7,62,404/- as worked out on such short reversed CENVAT Credit. The appellant contended that balance interest amount of Rs. 5,60,689/- was not payable as they had sufficient amount of CENVAT Credit over and above the amount short reversed during the respective months and not paid said amount of interest. Accordingly show cause notice dated 22.01,2010 was issued to the appellant proposing recovery of said interest under Rule 14 of the Cenvat credit Rules, 2004 read with Circular No. 897/17/2009-CX dated 3.9.2009. The adjudicating authority confirmed the recovery of said interest vide impugned order.
2. The said order was put, to challenge before Commissioner (Appeals) on the following grounds:-
(iii) That entire issues revenue neutral, because Unit-ll owns by appellant and duly registered with Central Excise as manufacturer. The amount of Cenvat Credit reversed by the appellant at the time of clearance of input as such are available to their Unit-ll as Cenvat Credit, and thus, there is no loss of revenue whatsoever, and the entire issue is revenue neutral. In support their submission, appellant has relied upon the decision of the Honble Supreme Court given in the case of CCE V/s. Narmada Chematur Pharma [2005(179)ELT 276(S.C.)] & Mafatlal Industries Ltd., V/s. CCE [2009(241)ELT 153(T)] maintained by Honble Supreme Court in 2010(255)ELT-A.77(SC), Super Trading & Steel Ltd., V/s. CCE 2007 (208)ELT 153 (T) maintained by Honble Supreme Court in 2007 (212) ELT-A 151 (SC).
(v) That entire issue time barred as issue in had relates to period 2007-08 & 2008-09 (upto December, 2008) and the show cause notice has been issued on 22.1.2010 whereas Section 11A of the Central Excise Act, 1944 prescribed ordinary period of demand of duty within 1 year period.
3. The appellant authority did not accept the above contention of the appellant and rejected the appeal. Hence the present appeal.
4. After hearing both the sides duly represented by Shri Jaydeep, learned advocate appearing for the appellant and Shri B.B. Sharma, learned DR for the respondent, I find that the short dispute in the present appeal relates to confirmation of interest and in respect of the Cenvat Credit, which the appellant did not reverse along with the clearance of the inputs. The said clearance admittedly took place during the period 2007-08 & 2008-09 (upto December 2008) and the show cause notice issued on 22.1.2010. The Honble Delhi in the case of Hindustan Insecticiedes Ltd. Vs. CCE, Ltu [2013-TIOL-631-HC-DEL-CX] has held that the provision of limitation are applicable to the recovery of interest. By following the said decision I hold that the interest confirmation is barred by limitation.
5. In any case, I find that the inputs were cleared to the sister unit who were entitled to avail the credit on the same. As such, the entire situation was revenue neutral.
6. I also further note that the said credit was not utilized by the appellant and was laying in them account books. The Honble Karnataka in the case of CCE & ST, Bangalore Vs. Bill Forge Pvt. Ltd. [2012 (26) STR 206 (Kar.)] has held that where the credit has not been utilized, the same would not attract the interest provisions. The said decision stand given by the Honble High Court after considering the Honble Supreme Court decision in the case of Union of India Vs. Ind-Swift Laboratories Ltd. [2011 (2650 ELT 3 (S.C.)].
7. For all the reasons recorded above, I set aside the impugned order confirming interest and allow the appeal with consequential relief to the appellant.
(Pronounce in the open Court on 30.12.2013) (Archana Wadhwa) Member (Judicial) Jyoti* ??
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