Custom, Excise & Service Tax Tribunal
Cce & St, Tirupati vs M/S. Manishreni Ferro Alloys Pvt. Ltd on 5 May, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench SMB Court I Appeal No. E/21899/2014 (Arising out of Order-in-Appeal No. 05/2014 (T) CE dt. 10.03.2014 passed by CCE & ST (Appeals), Guntur) For approval and signature: Honble Ms. Sulekha Beevi, C.S., 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? 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 Lordship wish to see the fair copy of the Order? 4. Whether Order is to be circulated to the Departmental authorities? CCE & ST, Tirupati ..Appellant(s) Vs. M/s. Manishreni Ferro Alloys Pvt. Ltd., ..Respondent(s)
Appearance Shri J.V.S. Chakarvarthy, Assistant Commissioner (AR) for the Appellant.
Shri P. Dwarakanath, Advocate for the Respondent.
Coram:
Honble Ms. Sulekha Beevi, C.S., Member (Judicial) Date of Hearing: 05.05.2016 Date of Decision: 05.05.2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.] This is an appeal filed by Revenue against the order passed by Commissioner (Appeals) which set aside the demand, interest and penalty confirmed by the original authority.
2. The respondent is engaged in manufacture of Ferro silicon and are availing facility of CENVAT Credit on inputs and capital goods. The allegation is that they availed irregular credit on MS Beam, MS Channels, MS Sections, TMT bars, HR sheets, HR coils, welding electrodes during the period April, 2008 to June, 2011. The Commissioner (Appeals) observed that the respondent herein has produced the certificate issued by Chartered Engineer to establish how the subject items were used in the factory. So also photograph of the various capital goods fabricated using the subject items like furnace, raw material handling system, conveyor, EOT crane moving system, pollution control system etc., was produced. The original authority denied credit drawing support from the decision of Vandana Gobal Ltd., case [2010 (253) ELT 440 (Tri-LB)].
3. The judgment of Tribunal in the case of M/s APP Mills Ltd., [2011-TIOL-1378-Cestat (Bang)] was followed by Commissioner (Appeals). In this case, the Tribunal was of the view that the larger bench decision is no longer good law as it runs contrary to the judgment in Rajasthan Spinning & Weaving Mills Ltd., which was rendered after the decision in Vandana Global Ltd., case. The Apex Court in the case of Rajasthan Spinning & Weaving Mills applied the user test and held that credit is admissible on MS items used for fabrication of chimney of D.G. set.
4. The learned AR Sri J.V.S. Chakarvarthy vehemently argued that Commissioner (Appeals) erred in not following the judgment in Vandana Global Ltd., case. He submitted that credit is not admissible on MS items, as the photographs were not signed by the Chartered Engineer. That the photographs do not show that steel items were used in the manufacture/fabrication of such machineries. The photographs were taken in assembled condition and these documents would not establish that subject items were used in manufacture/fabrication of machinery. I do not find any substance in this contention. The department has no case that the MS items/subjct items received in the factory were diverted in any manner.
5. The other challenge made by Revenue is that the finding of Commissioner (Appeals) that the demand is time barred is incorrect. The show cause notice is dated 04.07.2012. The period involved is April, 2008 to June, 2011. The demand is beyond the normal period of one year. Revenue contends that though the factum of avialment of credit on steel items and welding electrodes was stated to be reported to the department by way of submission of copies of the invoices along with returns, the prupose/place of use of the said items was never intimated to the department. I am not able to find any merit in this contention. Undisputedly the appellant has furnished returns (ER-1) and also filed details of the credit availed. There is no provision/column in the ER-1 return to mention the prupose/place of use of inputs/capital goods. When returns are filed, it is for the proper officer to conduct scrutiny of the returns and inform the assessee about defects. If the assessee disputes a show cause notice can be issued within the normal period. In the present case Revenue has not stated what prevented the proper officer from conducting scrutiny of returns and issuing show cause within normal period. The Commissioner (Appeals), in my view has rightly applied the judgment rendered by Honble Apex Court in the case of Continental Foundation Jt Venture Vs CCE, Chandigarh-1 [2007 (216) ELT 177 (S.C.)]. The Honble court in the said case held that mere omission to give correct information is not suppression of facts. Again in Agro Chemical Case, [2008 (227) ELT 12 (S.C.)] it was held that mere non-declaration is not sufficient for invoking larger period of limitaiton. The respondents here have filed statutory returns and credit statements as required by law. Revenue has no case that credit availed was suppressed. In fact, the show cause notice is based upon the ER-1 returns filed by respondent. Therefore, I am able to conclude that Revenue has miserably failed to establish the allegation of suppression of facts. In such circumstances, the demand raised invoking extended period is unsustainable. The impugned order passed by Commissioner (Appeals) does not call for any interference. The appeal filed by Revenue is dismissed.
(Operative part of this order was pronounced in court on conclusion of the hearing) SULEKHA BEEVI C.S. MEMBER(JUDICIAL) Jaya.
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