Custom, Excise & Service Tax Tribunal
Bpl Techno Vision Pvt. Ltd vs Commissioner Of Central Excise, ... on 29 October, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/21155/2014-SM [Arising out of Order-in-Appeal No. 09/2014-CE dated 13/01/2014 passed by Commissioner of Central Excise(Appeal-I), Bangalore] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, 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? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? yes 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 BPL Techno Vision Pvt. Ltd. 17th KM, Old Madras Road, Avalahalli, Virgonagar Post, Bangalore 49. Appellant(s) Versus Commissioner of Central Excise, Bangalore-I Queens Road, Bangalore 560001. Respondent(s)
Appearance:
Shri B. Raghavendra, Advocate For the Appellant Shri Pakshi Rajan, Asst. Commissioner(AR) For the Respondent Date of Hearing: 28/10/2015 Date of Decision: .
CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER Final Order No. / 2015 Per : ARCHANA WADHWA Appellant is engaged in the manufacture of rechargeable lanterns, speakers, digital satellite receivers etc. falling under Chapter 85 and 94 of Central Excise Tariff Act, 1985. They imported various inputs like transistors, batteries, diodes, push switches and FL lamps etc., to be used in the manufacture of their final product. The said imported inputs were cleared on payment of duty of CVD, education cess, SHE cess as also on payment of SAD. The duties so paid by the appellant were availed as credit.
2. Though appellants are using the said inputs in the manufacture of their final product but in case of surplus inputs, the same are removed as such by selling the same. At the time of removal of the said inputs, the appellant paid the duty of excise on the transaction value of the said inputs, by debiting the same out of the CENVAT credit so availed.
3. As per the audit conducted in the appellants factory, it was noticed that during the period August 2009 to September 2011, the appellant had cleared the inputs as such and has not specifically reversed the SAD credit. Based upon the said audit objection, proceedings were initiated against the appellant by way of issuance of a show-cause notice dt. 02/03/2012 proposing to confirm the amount of Rs.73,722/- along with interest in terms of the provisions of Rule 14 of CENVAT Credit Rules 2004.
4. During the course of adjudication, the appellant contested the demand on merits as also on limitation. It was specifically pleaded by them that while paying duty of excise on the inputs sold by them, they have reversed much more than the total credit so availed by them. As such, there was no need to separately reverse the SAD credit. As regards limitation, they pleaded that the entire facts were in the knowledge of the Revenue and were part of their records, in which case, no mala fide can be attributed to them so as to justifiably invoke the longer period of limitation. They also pleaded that in any case, the goods have been sold by them on payment of VAT, in which case the SAD paid by them at the import of the goods was to be refunded to them.
5. The above contentions raised by the appellant were not accepted by the adjudicating authority who confirmed the demand along with interest and imposition of penalty. The order of the original adjudicating authority was upheld by Commissioner(Appeals). Hence the present appeal.
6. I have considered the submissions made by both the sides. It is not disputed that the inputs were imported by the appellant on payment of duties for further use in the manufacture of their final product. The duties so paid by the appellant were availed as credit in their statutory records. However in some cases, the inputs being surplus were sold by the appellant on a transaction value and on payment of duty of excise. Such excise duty so paid by the appellant was debited from their CENVAT credit account. It is the appellants contention that while debiting the CENVAT credit account, they have paid more duty than the credit so availed by them inasmuch as the transaction value was higher than the imported value of the goods.
7. The issue is as to whether in such a scenario, the law requires separate reversal of SAD or not. In terms of the provisions of Rule 3(5) of CENVAT Credit Rules, 2004 when the inputs, on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final product shall pay an amount equal to the credit availed in respect of such inputs. As such, the said provision of law simplicitor requires an assessee to reverse the CENVAT credit so availed by him in case the receipted inputs are subsequently removed. In the present case admittedly the appellant has paid excise duty by adopting transaction value of the said inputs by debiting the CENVAT credit. The said fact is not in dispute and stands mentioned in the impugned order of the original adjudicating authority, which, for ready reference, is reproduced below:-
19. Further, I find from the submission of the assessees that whenever imported inputs were cleared as such from their factory they have adopted the transaction value and excise duty was paid on such transaction value which is higher than the purchase value and in effect the excise duty paid on those removal was much higher than the CENVAT credit taken on these inputs. And hence they have contended that they need not to reverse the SAD component as they have already paid an amount more than what they have availed as CENVAT Credit, therefore no requirement in the CENVAT Credit Rules, 2004 to reverse the credit availed on SAD.
20. These contentions of the assessee cannot be accepted. Mere paying more amounts by adopting the transaction value does not suffice the compliance to the provision of law. As per Rule 3(5) of CENVAT Credit Rules, 2004 the assessee has to reverse the amount equivalent to CENVAT Credit availed i.e. the components of credit BED, Ed cess, SHE and SAD which have been availed on receipt of imported inputs. In the instant case the assessee has adopted some amount as transaction value, which is appropriate for their business transactions and they have paid the BED and applicable Ed Cess and SHE Cess on the same on. As the value at which the inputs were imported was less than the transaction value, adopted for clearance as such the total amount of duties paid on the transaction value happens to be more than the CENVAT credit availed. It was not assessee intended practice to pay more amount than amount equivalent CENVAT credit availed on the inputs cleared as such. Therefore the contention of the assessee that by paying more amounts in BED they have complied with the provisions of CENVAT Credit Rules, 2004 is not tenable.
8. As is seen from the above, the fact that appellant had paid more duty at the time of clearance of the inputs from their factory is not disputed by the Revenue. If that be so, I really fail to understand as to how the appellant is further required to reverse the SAD component. It stands explained to me that the appellant is maintaining only one register reflecting the credit of all the types of duties paid at the time of import. If the cumulative credit in respect of all the duties is to the extent of Rs.100 and if an asseessee has paid Rs.120/- at the time of clearance of such inputs, it can be safely concluded that the entire credit stands reversed by him. There cannot be any further requirement of reversal of SAD component separately.
9. In view of the above, I agree with the learned advocate appearing for the appellant and set aside the impugned order and allow the appeal with consequential relief to the appellant. As I have allowed the appeal on merit, the other issues in respect of limitation or availability of notification etc. are not being adverted to.
(Pronounced on ) ARCHANA WADHWA JUDICIAL MEMBER Raja..
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