Custom, Excise & Service Tax Tribunal
Cce, Belgaum vs M/S. Shree Renuka Sugars Ltd on 6 August, 2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing:06/08/2012
Date of decision:06/08/2012
Appeal No.E/845/2006
(Arising out of Order-in-Appeal No.138/2006-CE dt. 11/05/2006 passed by CCE(Appeals), Mangalore)
For approval and signature:
Honble Mr. P.G. Chacko, Member(Judicial)
Honble Mr. M. Veeraiyan, Member(Technical)
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
CCE, Belgaum
..Appellant(s)
Vs.
M/s. Shree Renuka Sugars Ltd.
..Respondent(s)
Appearance Mr. Ganesh Haavanur, Addl. Commissioner(AR) for the appellant.
Mr. V.B. Gaikwad, Advocate for the respondent.
Coram:
Honble Mr. P.G. Chacko, Member(Judicial) Honble Mr. M. Veeraiyan, Member(Technical) FINAL ORDER No._______________________2012 [Order per: M. Veeraiyan] This is an appeal by the Department against the order of the Commissioner(Appeals) No. 138/2006-CE dt. 11/05/2006.
2. The respondents are manufacturers of sugar. They have received duty-paid PP/LDPE granules and taken credit of the duty paid on the said materials. They have sent the PP/LDPE granules to the job worker under Rule 4(5) of the CENVAT Credit Rules (CCR) without reversing the credit for getting the sacks manufactured and the sacks were received back in their factory and utilized for packing the sugar. The credit taken on the granules has been utilized for the payment of duty on sugar. The department issued show-cause notice alleging that the respondents have not paid duty on the sacks as they have availed the benefit under Notification No.67/95 CE dt. 16/03/1995 on the ground that they were captively consumed. Further, it was alleged that they have not fulfilled the conditions under the Notification No.214/86-CE dt. 25/03/1986. The original authority denied the credit availed on the granules on the above grounds. On appeal by the party, the Commissioner(Appeals) has set aside the order of the original authority. Hence, the Department is in appeal.
3. The learned Additional Commissioner(AR), reiterating the findings of the original authority and the grounds of appeal, submits that the respondents have not fulfilled the conditions of Notification No.214/86 inasmuch they have not paid duty on the sacks received by them and, therefore, the denial of credit in respect of granules is correct. Therefore, he seeks setting aside the order of the Commissioner(Appeals) and restoring the order of the original authority.
4. The learned advocate for the respondents strongly supports the order the Commissioner(Appeals). He particularly draws our attention to the finding of the Commissioner(Appeals) that the violation, if any, of condition of Notification No.214/86 should result in demand of duty from the job worker and that there is no such demand on the job worker. Further he submits that if they have utilized the granules in their own factory for the manufacturing of sacks, there would be no denial of credit. He further submits that merely because they have sent the granules for manufacture of sacks to a job worker and received the same and utilized for packing the dutiable final products, they cannot be denied the credit. In this connection, he relies on para 3.3. of Supplementary Instructions (Boards Notification No.23/2004-CE(NT) dt. 10/09/2004 as amended) wherein the packing materials have been clearly held to be raw materials for making packing materials have been treated as inputs in relation to the manufacture of final product and that credit wa available.
5. We have carefully considered the submissions from both sides and perused the records. It is not in dispute that the impugned inputs for making packing materials have been sent to the job worker under Rule 4(5) of the CCR. The goods manufactured by the job worker viz. the sacks have been returned to the respondents without payment of duty. Apparently such clearances have been permitted at the hands of the job worker by allowing the benefit of Notification No.214/86. It is not in dispute that the respondents have received the goods viz. sacks and utilized the same for packing their final product viz. sugar on which duty has been paid. Merely because they have not paid the duty on the sacks which were manufactured in the factory of the job worker, there is no justification for denial of credit on the inputs which have gone into the packing materials. We find that the order of the Commissioner(Appeals) is legal and proper.
6. In view of the above, we reject the appeal by the Department.
(Pronounced and dictated in open court) (M. VEERAIYAN) MEMBER (TECHNICAL) (P.G. CHACKO) MEMBER(JUDICIAL) Nr 5