Custom, Excise & Service Tax Tribunal
M/S. Shah Fabrics Pvt. Ltd vs C.C.E. Jaipur on 17 May, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Appeal No. E/1243/2007-EX(DB)
[Arising out of Order-in-Appeal No. 722(HKS)CE/JPR-II dated 31.01.2008 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
Hon'ble Shri B. Ravichandran, Member (Technical)
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?
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Shah Fabrics Pvt. Ltd. .Applicants
Vs.
C.C.E. Jaipur .Respondent
Appearance:
Ms. Rinky Arora, Advocate for the Applicants Shri M.R. Sharma, DR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Hon'ble Shri B. Ravichandran, Member (Technical) Date of Hearing: 17.05.2016 FINAL ORDER NO. 51967-EX(DB) Per Archana Wadhwa:
After hearing both the sides we find that the appellant are engaged in the manufacture of grey fabrics. They were availing the Cenvat Credit on BED, SED and AED (T&TA) paid on the inputs used in the manufacture of grey fabrics. Whereas they were using the BED & SED for payment of duty on their final product that is grey fabric, the credit on AED (T&TA) was not being utilized by them in as much as the grey fabric did not attract any AED (T&TA) and the said credit so availed by them was lying unutilized in their Cenvat Credit Accounts.
2. Revenue by entertaining the view that the credit lying in their books was an expenditure which should have been included in the cost / assessable value of grey fabrics, initiated the proceedings against them for demand of differential duty. The said proceedings resulted in confirmation of demand to the extent of Rs.3,30,266/- along with confirmation of interest and imposition of penalty. The order passed by the original Adjudicating Authority was further confirmed by Commissioner (A). Hence the present appeal.
3. After hearing both the sides we find that the short issue involved is as to whether the additional excise duty credit which the appellant has availed but has not been used by them in as much as their final product did not attract any AED, is required to be added in the assessable value of the final product or not. The issue is no more res integra and stands settled by the Honble Supreme Courts decision in the case of Collector of Central Excise Pune Vs. Dai Ichi Karkaria Ltd.-1999 (112) ELT 353 (SC). It stands held that the excise duty paid on raw material if modvatted not to be included in determining the cost of production of excisable product.
In the present case we note that it is not the appellant who is seeking deduction of AED from the cost of their final product but it is the revenue who seeks to add the same in the cost of the final product. In view of the decision of the Supreme Court referred supra such credit is not required to be added back to the assessable value of the final product.
4. Even otherwise also we find from perusal of the invoices produced before us that their final product was being sold by the assessee at the transactional value in which case the question of adding any credit element would not arise. In view of the foregoing we set aside the impugned order and allow the appeal with consequential relief to the appellant.
[Operative part of the order pronounced in the open Court] (B. Ravichandran) (Archana Wadhwa) Member (Technical) Member (Judicial) Bhanu 3 E/1243/2007-EX(DB)