Custom, Excise & Service Tax Tribunal
M/S Hi-Tech Blow Moulders Pvt. Ltd vs Commissioner Of Central Excise, ... on 29 February, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/633/2011-DB & E/634/2011-DB [Arising out of Order (Original) No. 45/2010 dated 22/12/2010 passed by Commissioner of Central Excise, Bangalore-I] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER 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? No 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 HI-TECH BLOW MOULDERS PVT. LTD., SY NO.75, SOLUR VILLAGE, VANAKANAHALLI POST, ANEKAL TALUK, BANGALORE 562106. Appellant(s) SHRI SANDEEP SETHIYA, MANAGING DIRECTOR, M/S. HI TECH BLOW MOULDERS PVT. LTD., SY.NO. 75, SOLUR VILLAGE, VANAKANAHALLI POST, ANEKAL TALUK, BANGALORE 562106. Appellant(s) Versus Commissioner of Central Excise, BANGALORE-I POST BOX NO 5400, CR BUILDINGS, BANGALORE - 560001. Respondent(s)
Appearance:
Shri Ajayan, Advocate RAVI SHANKAR & CHANDER KUMAR, ADVOCATES 504,4TH FLOOR, OXFORD TOWERS, NO.139, OLD AIRPORT ROAD, KODIHALLI, BANGALORE - 560008 For the Appellant Shri N. Jagdish, A.R. For the Respondent Date of Hearing: 29/02/2016 Date of Decision: 29/02/2016 CORAM :
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI ASHOK K. ARYA, TECHNICAL MEMBER Final Order Nos. 20296 & 20297 / 2016 PER ARCHANA WADHWA After hearing both sides, we find that the appellant is inter alia getting the job-work for the principal manufacturer and manufactures containers/barrels out of the granules received by them from the principal manufacturer. These barrels are cleared by them to the principal manufacturer on the job-work bills. The principal manufacturer again raisesP the Excise bill, pays duty of Excise and sells the same barrels to the appellant. As the appellant is further processing the barrels into final product, by fixing of injection moulded caps, inners, etc., they availed credit of Excise duty paid by the principal manufacturer and clears their final product on payment of duty of Excise by utilizing the said availed credit.
2. Revenue has no objection till the point of manufacture of plastic barrels on job-work basis. However, their objection is that inasmuch as the process carried out by the appellant on the said barrels does not amount to manufacture, they are not entitled to avail Cenvat credit of Excise duty paid by the principal manufacturer. Accordingly, proceedings were initiated against the appellant for denial of credit, resulting in passing of the present impugned order.
3. Though the appellants have contended that the process undertaken by them amounts to manufacture and also relied upon various decisions of the Tribunal, we are of the view that the appeals can be disposed of on legal grounds that credit having been utilized by the appellant for payment of duty for their final product and thus not require any further reversal. It has been the subject matter of various decisions that once the duty of Excise is paid by utilizing the credit availed by an assessee, the same would amount to reversal of credit and there can be no requirement of any further reversal. Reference in this regard can be made to a latest decision of the Tribunal in the case of Asian Colour Coated Ispat Ltd. Vs. Commissioner of C. Excise., Delhi-III [2015 (317) E.L.T. 538 (Tri.-Del.)] where there was difference of opinion between two original Members of the Bench and the issue was resolved by a third Member. After discussing the entire case laws, it was held that the credit availed on the inputs which were allegedly used for payment of duty on the final product, which cannot be held to be a manufactured product, would not call for further reversal.
4. At this stage, learned advocate explains that they were also getting job-work from other job worker to whom they sent their raw material. However, in some cases, the goods were not received back in the factory within 180 days, thus requiring to reverse the credit along with interest, which they have done even before the issue of show-cause notice. As such, he submits that he is not disputing the said issue but prays for setting aside the penalty on this account.
5. Inasmuch as we hold in favour of the assessee on the main issue, and the issue of reversal of credit on account of non-receipt of inputs sent to the job worker within a period of 180 days is a procedural lapse and inasmuch as the credit has been reversed along with interest even before the issue of show-cause notice, we find no justifiable reason to impose penalty on the appellant and also on the Managing Director. The penalty is accordingly set aside. Both the appeals are decided in above manner.
(Pronounced and dictated in open court) (ASHOK K. ARYA) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER /vc/