Custom, Excise & Service Tax Tribunal
M/S. Itc Ltd vs Cce, Chennai on 20 November, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/496/2005
(Arising out of Order-in-Appeal No. 34/2005 (M-I) dated 14.3.2005 passed by the Commissioner of Central Excise (Appeals), Chennai)
For approval and signature:
Honble Shri P.K. Das, Judicial Member
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 the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. ITC Ltd. Appellant
Vs.
CCE, Chennai Respondent
Appearance Ms. L. Maithili, Advocate, for the Appellants Shri P. Arul, Superintendent (AR) for the Respondent CORAM Honble Shri P.K. Das, Judicial Member Date of Hearing: 20.11.2013 Date of Decision: 20.11.2013 Final Order No. 40594/2013 The relevant facts of the case in brief as revealed from the record are that the appellant is engaged in the manufacture of printed paperboard, carton falling under sub-heading 4819.12 of CETA, 1985. They received the imported inputs during the period 15.11.94 to 20.1.95 accompanied with Bills of Entry and duly recorded in their RG23A Part I register under Rule 57G of the erstwhile Central Excise Rules, 1944. Credit was availed in RG23A Part- II register during the period August and September 1995. On 29.6.1995, Rule 57G of the Central Excise Rules, 1944 was amended by insertion of proviso to Rule 57G by Notification No. 28/95-CE(NT) dated 29.6.95 insofar as manufacturer shall not take credit after six months of the date of issue of any of the documents specified in the first proviso to sub-rule. A show-cause notice dated 21.11.95 was issued by the Superintendent of Central Excise proposing to disallow the credit of Rs.10,86,556.84 taken by them in their RG 23A part II in violation of the proviso to Rule 57G(2) of the Central Excise Rules, 1944. The original authority confirmed the demand of Rs.10,86,556.84 under Section 11A of the Central Excise Act, 1944. Commissioner (Appeals) rejected the appeal filed by the appellant. Hence the appellant has filed this appeal.
2. The learned counsel on behalf of the appellant submits that they have made entries in their RG23A Part I register within six months and thereafter credit cannot be denied on the ground that the credit was availed in RG 23A Part II after six months. She submits that after considering the decision of the Honble Supreme Court in the case of Osram Surya (P) Ltd. Vs. CCE 2002 (142) ELT 5 (SC), this Tribunal in the case of CCE Vs. Ford India Ltd. 2012 (284) ELT 202 rejected the appeal filed by the Revenue. It is also contended that the amended provisions under Rule 57G(2) would not apply. In this case, they have received the inputs and recorded in their RG 23A Part I register prior to amendment. She relied on the decision of the Tribunal in the case of National Steel Industries Ltd. Vs. CCE 2000 (126) ELT 709.
3. On the other hand, the learned AR on behalf of the Revenue submits that the issue has already been decided by the Honble Supreme Court in the case of Osram Surya (supra). It is also contended that the Larger Bench of the Tribunal in the case of Kusum Ingots & Alloys Ltd. Vs. CCE 2000 (120) ELT 214 (Tri. LB) approved the view taken in Osram Surya Pvt. Ltd. Vs. CCE 1998 (29) RLT 684 (Tribunal) which has also been upheld by the Honble Supreme Court. He also relied upon the decision of the Tribunal in the case of Ashok Leyland Ltd. Vs. CCE 2005 (187) ELT 355.
4. After hearing both sides and on perusal of the records, I find that in the present case, the appellant received the imported inputs during the period 15.11.94 to 20.1.95 accompanied with Bills of Entry and duly recorded in their RG 23A Part I register. There is a delay in taking the credit in the RG 23A Part II register which they have done in the month of August and September 1995. I find that the identical facts were raised in the case of Ford India (supra). In that case, the assessee received the inputs during the period May to September 1999 and credit was availed in March 2000. The issue involved in that case was whether the mistake committed by the assessee in not reflecting the quantum of credit in RG 23A part II register would disentitle them from the benefit of credit of duty paid on the inputs, especially when the entries has been made in RG 23A Part I record within six months. It is seen that the Tribunal after discussing the decision of Osram Surya (supra) passed by the Honble Supreme Court allowed the appeal filed by the assessee on the ground that the assessee had received the goods within the period of six months from the date of clearance of input manufacturers factory and has duly recorded in RG 23A Part I register. The relevant portion of the said decision is reproduced below:-
8. It is vehemently argued on behalf of the appellants that in effect by introduction of this rule, a manufacturer in whose account certain credit existed, would be denied of the right to take such credit consequently, as in the case of Eicher (supra), a manufacturers vested right is taken away, therefore, the rule in question should be interpreted in such a manner that it did not apply to cases where credit in question had accrued prior to the date of introduction of this proviso. In our opinion, this argument is not available to the appellants because none has questioned the legality, or the validity of the rule in question, therefore, any argument which in effect questions the validity of the rule, cannot be permitted to be raised. The argument of the appellants that there was no time whatsoever given to some of the manufacturers to avail the credit after the introduction of the rule also is based on arbitrariness of the rule, and the same also will have to be rejected on the ground that there is no challenge to the validity of the rule.
9. Without such a challenge, the appellants want us to interpret the rule to mean that the rule in question is not applicable in regard to credits acquired by a manufacturer prior to the coming into force of the rule. This we find it difficult because in our opinion the language of the proviso concerned is unambiguous. It specifically states that a manufacturer cannot take credit after six months from the date of issue of any of the documents specified in the first proviso to the said sub-rule. A plain reading of this sub-rule clearly shows that it applies to those cases where a manufacturer is seeking to take the credit after the introduction of the rule and to cases where the manufacturer is seeking to do so after a period of six months from the date when the manufacturer received the inputs. This sub-rule does not operate retrospectively in the sense it does not cancel the credits nor does it in any manner affect the rights of those persons who have already taken the credit before coming into force of the rule in question. It operates prospectively in regard to those manufacturers who seek to take credit after the coming into force of this rule. Therefore, in our opinion, the Tribunal was justified in holding that the rule in question only restricts a right of a manufacturer to take the credit beyond the stipulated period of six months under the rule. Therefore, this appeal will have to fail.
5. I find that the Tribunal in the case of Ford India (supra) had discussed all the decisions of Osram Surya Ltd. (supra) which was also approved by the Larger Bench as well as by the Honble Supreme Court. Respectfully following the decision of Ford India (supra), I set aside the impugned orders and allow the appeal with consequential relief.
(Dictated and pronounced in open court) (P.K. Das) Judicial Member Rex 2