Custom, Excise & Service Tax Tribunal
M/S. Coromandel Fertilizers Ltd vs The Commissioner Of Customs & Central ... on 3 February, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Appeal No: E/372/2009
(Arising out of Order-in-Appeal No: 142/2008 (V-I) CE dated 30.12.2008 passed by the Commissioner of Customs & Central Excise (Appeals), Visakhapatnam.)
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. Coromandel Fertilizers Ltd.
Appellant
Vs.
The Commissioner of Customs & Central Excise
Visakhapatnam.
Respondent
Appearance
Shri Muthuvenkataraman, Advocate for the appellant.
Shri Harish Kumar, SDR for the revenue.
CORAM
SHRI M. V. RAVINDRAN, HONBLE MEMBER (JUDICIAL)
SHRI P. KARTHIKEYAN, HONBLE MEMBER (TECHNICAL)
Date of Hearing: 03.02.2011
Date of decision: 03.02.2011
FINAL ORDER No._______________________2011
Per Shri M. V. Ravindran (Oral)
This appeal is filed against Order-in-Appeal No: 142/2008 (V-I) CE dated 30.12.2008.
2. The relevant facts that arise for consideration are that the appellants were engaged in the manufacture of fertilizers are also engaged in the production of Suplhur Bentonite used as fertilizers by the farmers. It is the contention of the revenue that the said product is excisable and coming to such a conclusion, they issued a show cause notice to the appellants for discharge of Excise duty. The appellants in order to avoid the interest liability, if any, arising on the Excise duty payable on the said product for the period March 2006 to October 2006, paid the duty under protest and contested the order of the revenue classifying the product Suplhur Bentonite as a manufactured product. The assessee took the matter to the Tribunal and the Tribunal vide Final Order No.1740/2006 dated 13.10.2006 held that the said product Suplhur Bentonite was not a manufactured product and set aside that impugned order. Consequent to such an order in their favour, the appellants filed a refund claim of the amount of duty paid by them through PLA i.e, account current. Show cause notice was issued for rejection of such refund claim. Appellants contested the show cause notice before the Adjudicating Authority. The Adjudicating Authority vide Order-in-Original dated 24.12.2007 rejected the refund claim filed by the appellant. Aggrieved by such an order, the appellants preferred an appeal before the learned Commissioner (A). The learned Commissioner (A) passed the following order.
ORDER
The appeal is allowed by way of remand to the original authority for calculation of the total duty payment made against the impugned goods and the total credit irregularly availed by the appellants during the said period in relation to the said goods and interest payable thereon and arriving at the amount refundable, if any, after setting off the later along with interest liability against the former. The appeal stands disposed off accordingly.
3. The learned Counsel appearing on behalf of the appellant would took us through the Order-in-Appeal. It is his submission that the learned Commissioner (A)s order of adjustment of cenvat credit wrongly availed and interest liability thereon to be set off against the refund claim, which of the amount paid through PLA is erroneous. It is his submission that they had discharged the duty liability on the final products during the period March 2006 to October 2006 by utilizing the cenvat credit as well as paying amount through Account Current or PLA. It is his submission that they themselves had asked for refund, only of the amount of the duty paid by them through PLA / account current. He would submit that they have not availed the credit wrongly and hence, there is no liability on them to reverse the same or the interest thereon as has been held by the Larger Bench in the case of HMT Vs. Commissioner of Central Excise, Panchkula - 2008 (232) ELT 217 (Tri.-LB). He would also rely upon the decision of the coordinate Bench of the Tribunal in the case of Ashok Enterprises Vs. CCE, Chennai - 2008 (221) ELT 586 (Tri.-Chennai) and also on the judgment of the Honble High Court of Kerala in the case of CCE & C, Cochin Vs. Premier Tyres Ltd. - 2001 (130) ELT 417 (Ker.).
4. The learned SDR on the other hand would draw our attention to the Order-in-Original. It is his submission that the assessee had taken the cenvat credit though knowing and contesting that their final product Suplhur Bentonite was not a manufactured product. It is his submission that having taken the cenvat credit of the duty paid on the raw materials when knowing fully that the final product is not leviable to duty, therefore, interest is leviable on the wrongly availed cenvat credit. He would also submit that the Adjudicating Authority has recorded on fact that the appellant had collected the amount from his customers and hence, the question of unjust enrichment will arise in this case.
5. We have considered the submissions made by both sides and perused the records. The issue involved in this case lies in very narrow compass. The appellants claim is that they have asked for the refund of the duty paid under protest during the period march 2006 to October 2006 from PLA only. It is undisputed that during the period March 2006 to October 2006, appellant has discharged the duty liability on Suplhur Bentonite under protest in pursuance to the order of the Commissioner of Central Excise dated 22.12.2005 holding their product as manufactured product. Consequent to the Final Order of this Bench holding such activity does not amount to manufacture, they claimed the refund of the amount paid through PLA. Once it is undisputed that during the relevant period March 2006 to October 2006 appellant had utilized the cenvat credit for discharge of duty liability on Suplhur Bentonite, it is to be understood that the appellant had reversed the cenvat credit which he has taken. Revenues contention that the appellant had wrongly availed the cenvat credit is on wrong footing. It is undisputed that the duty liability was forced upon the appellant during the relevant period. If the appellant is liable to discharge the duty liability on the final product, then he is eligible to avail cenvat credit on the inputs utilized for the manufacture of such products. If this is undisputed, the credit availed by the appellant during the relevant period cannot be held as incorrect. If that be so, the amount of interest which is sought to be recovered from the appellant will also not be correct as per the law as laid down in the case of HMT Vs. CCE (supra) by Larger Bench.
6. In view of this, we set aside the impugned order and at the same time, remand the matter back to the Adjudicating Authority for a limited purpose of coming to such conclusion as to the eligibility of the refund claimed by the assessee from the point of view of unjust enrichment. Adjudicating Authority will follow the principles of natural justice before coming to such conclusion. Appeal allowed by way of remand to the Adjudicating Authority for limited purposes of considering the refund claim after the appellant has satisfied him about the non-passing of the incidence of duty i.e., that there is no unjust enrichment.
(Pronounced and dictated in open Court) (P. KARTHIKEYAN) Member (T) (M. V. RAVINDRAN) Member (J) //rv// 6