Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs Atlas Automotive Components Pvt. Ltd on 2 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Appeal No. E/925/06 (Arising out of Order-in-Appeal No. PI/320/05 dated 31.08.2005 passed by Commissioner of Central Excise (Appeals), Pune I) For approval and signature: Honble Mr. M.V. Ravindran, 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 : No 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?
Commissioner of Central Excise Pune I Appellant Vs. Atlas Automotive Components Pvt. Ltd. Respondent Appearance:
Shri H.M. Dixit, Asst. Commr (AR) for appellant Shri Rajesh Ostwal, Advocate for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Date of Hearing: 21.09.2016 Date of Decision: 21.09.2016 ORDER NO Per: M.V. Ravindran This appeal filed by Revenue is directed against order-in-appeal No. PI/320/05 dated 31.08.2005.
2. Heard both sides and perused the records.
3. On perusal of the records it transpires that the issue is regarding the denial of CENVAT Credit on the inputs which were utilised for manufacturing of finished goods which were cleared on payment of duty as per direction of the Hon'ble High Court of Bombay. Subsequently, the adjudicating authority has held that these products are not dutiable. The respondent availed the CENVAT credit which was sought to be denied by the lower authorities on the ground that the final product was exempted. The matter was travelled upto the first appellate authority who vide order No. PI/205/94 dated 31.05.1994 held that since the respondent assessee has paid the duty, benefit of Modvat credit cannot be denied to him. Coming to such conclusion the first appellate authority permitted the respondent assessee to avail Modvat credit. The order of first appellate authority dated 31.05.1994 was not contested by Revenue and the Respondent after such order took the Modvat credit. That was contested by the Revenue directing the respondent assessee to reverse the Modvat credit so availed which has been not accepted by the first appellate authority in the impugned order.
4. On perusal of the grounds of appeal and the submissions made by learned D.R., I find that the Revenue is only aggrieved on the ground that the final product being exempted, respondent assessee cannot be availed CENVAT credit/Modvat credit on the duty paid on inputs. I find that the first appellate authority has correctly followed the law which is coming out in paragraph 4.1 and 4.2 of the order-in-appeal which I reproduce:-
4.1 I have carefully considered the impugned Order-in-Original, grounds of appeal and submissions made by the appellants during Personal hearing. I find that the appellant had claimed the classification of the casting- manufactured by them under heading 'no. 7616.90 .attracting Nil rate of Central Excise duty, however, the department initially .did not accept the same. In the process of litigation the Honble High .Court modified the Commissioner (Appeals) order dated 26.4.93 directing the appellants to furnish a Bank Guarantee of Rs. 50,00,006/- and to deposit balance amount of Rs. 5,43,825.4 7 and permitted the appellant to make the cash deposit in such amount as per the invoices on the basis of which the demand was raised in the Show Cause Notice dated 19.7.90 within a period of 6 months from the date of order and also directed the Department to issue certificate under Rule 57E of the Central Excise Rules, 1944 for the amount of cash deposit vide order dated 27.4.93. Thereafter, the appellant from time to time paid total duty of Rs.28,13,648/- from 25.5.93 to 6.4.94 per the Honble High Court's Order. In this case I find that the goods were held dutiable vide Order-In-Original No. CEX/39/91-92/Dn.VI dated 29.2.92, classifying the final products under respective chapters 84 to 87 & 90 of CETA 1985 depending on their use. Further vide Order-in-Appeal No. PI/205/94 dated 31.5.94 products going beyond proof machining stage were held dutiable and classifiable under the respective chapters, and accordingly with regard to modvat credit the Commissioner (Appeals) held that, In respect of all those cases where the castings are classified as machine part and charged to duty, the appellants should be allowed the benefit of modvat credit in respect of duty paid on inputs used in the manufacture of castings once the duty paid documents are produced but for filing a declaration, they are otherwise held to be entitled to modvat credit as clarified by the Ministry in its letter F.No. 26776192-C.Ex.3 dated 30.1.92 and by the Hon'ble CEGAT in the case of Kesoram Cement Vis Collector, 1989(48) ELT 413" .
As such, I find that t~e issue of allowing modvat credit had reached finality Vide the Commissioner (Appeals) order. supra .; . cognizance of which has not been taken by the adjudicating authority as pointed out by the appellants at the time of personal hearing.
4.2 Further I find that the provisions of Modvat were embodied in the Rule 57 A of the Central Excise Rules, which provided for allowing modvat credit on the inputs used in the final products charged to duty. In this case I find that undisputedly the duty has been paid on the final products manufactured by the appellants; though the products have subsequently been held as exempted. Further I find that even if the product was classified as exempted; the appellants were forbidden from claiming refund by the High Court. Therefore denial of Modvat is not justifiable; while the appellants were required to pay on the final products. It would also be discriminatory and contrary to the provisions of Rule 57 A. As such the Order-In-Original is not sustainable and the appellants are eligible to the modvat credit. 4.1 The above noted factual position is not contraverted in the Grounds of Appeal. Accordingly, in view of the foregoing I hold that the impugned order is correct and legal and does not suffer from any infirmity. Appeal is rejected.
(Dictated in Court) (M.V. Ravindran) Member (Judicial) nsk 1 6 Appeal No. E/925/06