Custom, Excise & Service Tax Tribunal
Cce, Chandigarh vs M/S Steelage Tubes (P) Ltd on 26 August, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. II DATE OF HEARING : 26/8/09. Excise Appeal No. 241 of 2006 [Arising out of the Order-in-Appeal No. 387/CE/CHD/2005 dated 27/10/2005 passed by The Commissioner (Appeals), Central Excise, Chandigarh.] CCE, Chandigarh Appellant Versus M/s Steelage Tubes (P) Ltd. Respondent Appearance Shri Sansar Chand, Authorized Representative (DR) for the appellant. Shri Hemant Bajaj, Advocate for the Respondent. CORAM : Honble Shri D.N. Panda, Judicial Member Honble Shri Rakesh Kumar, Technical Member Order No. ________________ Dated : ,,,,,,,,,,,_____________ ORDER
Per. D.N. Panda :-
1. Learned DR submits that when the input in question used by Respondent has not suffered compounded levy and invoices issued to it suffered from the declarations required by para 4 of the Notification No. 58/97-CE dated 30th August 1997, the Respondent is not entitled to the Cenvat credit. He also submitted that verification resulted with no payment of duty with the seller manufacturer.
2. Learned counsel Shri Bajaj submits that this respondent is a beneficiary of the compounding levy goods used as input for its factory. The inputs procured by Respondent were subject to compounded levy under Section 3A of Central Excise Act, 1944. Such input are deemed to have suffered duty, in terms of para 2 of Notification No. 58/97-CE dated 30th August 1997. When the compounding levy goods are said to have suffered duty an amount @ 12% of value of input is admissible to the respondent towards Cenvat credit for the quantum of compounded levy input used for manufacture of the output by the respondent.
3. Shri Bajaj further submits that when a respondent purchases compounded levy goods, he is not in a position to know whether seller manufacturer of that goods has paid duty to the treasury. Buyer has no other option than to believe documents and declaration issued by the seller manufacturer. There is nothing obligation under law for the buyer to know or inquire whether inputs he is buying from the manufacturer seller has suffered compounding levy. Therefore, board in terms of para 4 of circular was of view that a mere declaration of the seller manufacturer of the goods shall entitle deemed credit under para 2 of the notification to the buyer of input. Learned counsel relies on the judgment of the Honble High Court of Punjab & Haryana at Chandigarh in the case of CCE, Ludhiana vs. Namdev Pipes Ltd. reported in 2008 (228) E.L.T. 13 (P&H), CCE, Jalandhar vs. M/s Digvijay Steel Industries vide C.E.A. No. 8 of 2008 dated 08/07/2008 and CCE, Jalandhar vs. M/s Mahajan Steel Tubes Ltd. vide CM No. 23940-CII of 2007 and CEA No. 110 of 2007 dated 25/2/2008. He submits that Jurisdictional High Court has resolved the issue holding that if a wrong declaration is submitted by the manufacturer seller that shall not deny input credit in terms of para 2 of the notification. Therefore irrespective of any veracity of declaration, respondent is entitled to the relief.
4. Heard both sides and perused the records.
5. We have gone through various citations made by the learned counsel and also looked into spirit of notification granting relief to the buyer of compounded levy input. There is a deemed provision of discharge of duty liability in terms of para 2 of the Notification to entitle 12% credit to the buyer manufacturer. Of course, this is subject to para 4 of the notification. That para requires that invoice should be followed by declaration as to payment of excise duty by the seller manufacturer. We have also gone through the judgment of Honble High Court of Punjab & Haryana at Chandigarh in the case of Vikas Pipe vs. CCE, Chandigarh II reported in 2003 (158) E.L.T. 680 (P & H). The Honble High Court in para 3 has held that a buyer is not obliged to lead an evidence in support of his claim of Cenvat credit against compounded levy goods. Following the decision of Honble High Court of Punjab & Haryana, we consider that the matter has set at rest in absence of orders of higher court against judgment Vikas Pipe vs. CCE, Chandigarh II (supra). Accordingly revenue appeal is dismissed.
(Dictated and pronounced in open court) (D.N. Panda) Judicial Member (Rakesh Kumar) Technical Member PK