Custom, Excise & Service Tax Tribunal
M/S. Spm Instrument India Pvt. Ltd vs Cce, Hyderabad on 6 January, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court II
Date of Hearing: 06/01/2011
Date of decision:06/01/2011
Appeal No.E/1280/10
(Arising out of Order-in-Appeal No.05/2010 (H-II)CE dt. 29/3/2010 passed by Commissioner(Appeals-II), Hyderabad )
For approval and signature:
Honble Mr. M.V.Ravindran, 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?
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 Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. SPM Instrument India Pvt. Ltd.
..Appellant(s)
Vs.
CCE, Hyderabad
Respondent(s)
Appearance Ms. Mona, Advocate for the appellant.
Mr. K.S. Chandrasekhar, JDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2011 Per M.V.Ravindran This appeal is directed against the Order-in-Appeal No.05/2010 (H-II)CE dt. 29/3/2010 .
2. The relevant facts that arise for consideration are that the appellant herein is manufacturing dutiable as well as exempted goods by using common inputs on which Cenvat Credit has been availed. For the final products cleared to defence services, the appellant availed the benefit of exemption notification. At the time of clearances, based upon their working, they reversed the Cenvat Credit attributable towards the inputs consumed in the final products cleared without payment of duty. The lower authorities were of the opinion that the appellant could not do so and coming to such conclusion, issued a show-cause notice directing them to show cause as to why an amount of 5% of the value of exempted goods be not recovered from them for having utilized duty paid Cenvat Credit availed on common inputs in the manufacturing of dutiable as well as exempted goods. The Adjudicating Authority confirmed the demands and sought interest and imposed penalties. The ld. Commissioner(Appeals) has upheld the said Order-in-Original. Hence this appeal.
3. Ld. Counsel would take me through the allegations in the show-cause notice. She would draw my attention specifically to para 6 wherein the allegations are made out. She would also draw my attention to the findings of the ld. Commissioner(Appeals). She would submit that both the lower authorities have mis-directed themselves in coming to conclusion that the appellants is required to pay 5% of the amount of the value of the exempted goods cleared, inasmuch as having held that the appellant cannot avail benefit of Rule 6(3)(ii). She would draw my attention to the arguments submitted before the Adjudicating Authority as well as Commissioner(Appeals). She would submit that provisions of Rule 6(3)(ii) can be directly made applicable as they are in a position to identify the inputs which has gone into the manufacture of exempted final products and provisions of sub-rule 3A(c) will be applicable.
4. Ld. DR would submit that the workings submitted by the appellant have not been addressed by the lower authorities.
5. I have considered the submissions made by both sides and perused the records.
6. The issue involved in this case is whether the appellant having reversed the Cenvat Credit attributable to the inputs which has gone into manufacture of exempted goods cleared to defence purpose is sufficient compliance of provisions of Rule 6(3) read with Rules 6(3)(A). On perusal of the records and show-cause notice, I find that the appellants have availed the Cenvat Credit on common inputs. All along, the appellant has canvassed his case stating that they have reversed the Cenvat Credit attributable to the inputs which has gone into exempted goods cleared to defence, in support of such a proposition a chart has been provided by them before me. On perusal of the records, I find that some effort has been made by the appellant to identify the inputs used in the final products cleared to the defence by claiming exemption. If such detailed workings of the appellant are correct, then in my view, the provision of Rule 6(3) has been complied with by the assessee/appellant and also the procedure specified in sub-rule (3A). I also find that the CBEC Circular No.868/6/2008-CX dt. 9/5/2008 also reiterates that if it is possible to calculate the reversal based upon the actual consumption of inputs , then that should be considered as compliance of sub-rule (3A) of Rule 6. Since both these factual matrixes i.e. circular as well as consumption, have not been considered by lower authorities, in my considered view this needs to be gone int by the lower authorities. In view of this, I set aside the impugned order and remand the matter back to the Adjudicating Authority to re-consider the issue within the allegation as indicated in the show-cause notice and also considering the submissions made by the assessee as regards the actual consumption of the inputs of the exempted goods cleared by them to defence and reversal of duty attributable, and also considering the Boards circular dt. 9/5/2008 and come to a conclusion in the matter. Needless to say that the Adjudicating Authority will follow the principles of natural justice. In view of the foregoing, the impugned order is set aside and appeal is allowed by way of remand to adjudicating lauthority.
(Pronounced and dictated in open court) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 4