Custom, Excise & Service Tax Tribunal
M/S.Alom Extrusion Ltd vs Commissioner Of Central Excise, ... on 6 May, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.EA-72073/13
(Arising out of Order-in-Appeal No.25/CE/B-I/2012 dated 19.10.2012 passed by the Commissioner(Appeals) of Central Excise, Customs & Service Tax, Bhubaneswar.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, 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?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Alom Extrusion Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Customs & Service Tax, BBSR-I
Respondent (s)
Appearance:
Dr.B.N.Das, Consultant for the Appellant Shri S.Nath, AC(AR) for the Revenue CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing/Decision :- 06.05.2016 Date of Pronouncement :- 06.05.2016 ORDER NO.FO/A/75358/2016 Per Shri H.K.Thakur.
This Appeal has been filed by the Appellant against Order-in-Appeal No.25/CE/B-I/2012 dated 19.10.2012 passed by the Commissioner(Appeals) of Central Excise, Customs & Service Tax, Bhubaneswar as First Appellate Authority, under which Order-in-Original dated 28.02.2011 passed by the Adjudicating authority has been upheld.
2. Dr.B.N.Das, (Consultant) appearing on behalf of the Appellant argued that the issue involved in the present proceedings is whether Appellant, being a job-worker, is eligible to take Cenvat Credit with respect to its own inputs purchased and used in the manufacture of intermediate goods which are further used/cleared on payment of duty by the principal manufacturer. Ld.Consultant argued that their case is squarely covered by the Larger Bench decision in the case of Sterlite Industries (I) Ltd. v. Commissioner of Central Excise, Pune[2005 (183) ELT 353 (Tri.- LB)]. That the above order passed by the Larger Bench has also been upheld by Bombay High Court as reported at 2009 (244) ELT A-89(Bom.). That under this Order Honble Bombay High Court has dismissed the Appeal filed by the Revenue on the issue. He also relied upon the following case laws where similar credit has been held to be admissible by various High Courts and CESTAT.
(i) Shree Uma Foundries Pvt.Ltd. vs. Commissioner of C.Ex., Kol-II [2008 (222) ELT 317(Tri.-Kol)
(ii) Syschem (India) Ltd. vs. Commr. of C.Ex., Panchkula [2010 (261) ELT 586 (Tri.-Del.)
(iii) Commr. of C.Ex., Chennai-IV vs. Kyunsingh Industrial Motherson Ltd.
Order dated 19.06.2015 [Madras High Courts website] 2.1 It was further argued by the Appellant that as per Gujarat High Courts judgement in the case of E.I.Dupont India Pvt.Ltd. vs. Union of India [2014 (305) ELT 282(Guj.)] decisions of the higher appellate authorities/courts on identical questions of law should be followed by the lower authorities as a judicial discipline. It was his case that reliance placed by the First Appellate Authority on the case law of Tata Motors Ltd. vs. CCE, Pune-I [2009 (243) ELT 353 (Tri.-Mumbai)] was not correct in view of the various case laws relied upon by the Appellant.
3. Shri S.Nath, AC(AR) appearing on behalf of the Revenue argued that Cenvat Credit can be taken only by the manufacturer, who discharges duty liability. That in the present case Appellant acting as a job-worker has not discharged any duty liability on the manufactured product and was not eligible to Cenvat Credit. Ld.AR strongly defended the order passed by the First Appellate Authority.
4. Heard both sides and perused the case records. The issue involved in this Appeal is whether Appellant job-worker will be eligible to take credit on inputs directly purchased and used in the manufacture of goods under job-work. Appellant is clearing the goods without payment of duty as per the provisions contained in Notification No.214/86-CE. It has been held by Madras High Court in the case of Commr. of C.Ex., Chennai-IV vs. Kyunsingh Industrial Motherson Ltd.(supra) in its order dated 19.06.2015 that goods cleared as job-work under Notification No.214/86-CE will not come within the scope of expression exempted final product. Larger Bench in the case of Sterlite Industries Ltd. vs. Commissioner of Central Excise, Pune(supra) has held that credit of inputs used by the job-worker in the manufacture of finished goods will be admissible even if duty is paid by the principal manufacturer. This decision has been upheld by Bombay High Court by rejecting the Appeal filed by the Department.
5. Honble Gujarat High Court in the case of E.I. Dupont India Pvt.Ltd. vs. Union of India (supra) has made following observations on the issue of binding nature of decisions/orders passed by the higher appellate authorities/courts. Para 6.1 and 6.2 of this case law are reproduced below:-
6.1?Before parting with the present order, we are constrained to strongly disapprove such arbitrary act on the part of the lower adjudicating authority and/or lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Time and again the Honble Supreme Court as well as various High Courts and this Court have disapproved such conduct/act on the part of the lower authorities in ignoring the binding decisions/orders passed by the higher appellate authorities/courts. Still it appears that message has not reached the concerned authorities. In the recent decision in the case of Claris Lifesciences Ltd. (supra) in para 26 this Court has observed as under :
26.?Despite such clear and specific directions and authoritative pronouncements, act of issuance of show cause notice by the Deputy Commissioner is wholly impermissible and unpalatable and deserves to be quashed and struck down with a specific note of strong disapproval. The respondents simply could not have exercised the powers contained under the statute in such arbitrary exercise and in complete disregard to the pronouncement of this Court particularly reminding the Revenue authorities of the binding effect of decision of Tribunal on the identical question of law. This not only led to multiplicity of proceedings but also speaks of disregard to the direction of this Court rendered in the earlier petition of this very petitioner. Resultantly, petition stands allowed. Both the show cause notices dated 21-8-2012 and 22-1-2013 are quashed and struck down. It appears that still the message has not reached the concerned authorities in following the binding decisions of the higher appellate authorities and/or courts solely on the ground that the same is in the case of another assessee. Such a conduct is also required to be viewed from another angle. This would not only amount to disregarding the direction of the court rendered in earlier petitions but would also lead to multiplicity of proceedings. When the courts are overburdened and are accused of arrears, it is the duty of the concerned authorities to avoid multiplicity of proceedings and lessen the burden of the Courts. Being a part of the justice delivery system, all efforts should be made by the authorities/quasi judicial authorities and judicial authorities to see that there is no multiplicity of proceedings and to pass the orders considering the binding decisions. It would also avoid unnecessary harassment to the parties as well as the unnecessary expenditure.
6.2?As observed hereinabove despite clear and unequivocal message by the pronouncement of the decisions by the Honble Supreme Court as well as this Court, the message has not reached to the concerned authorities, we direct Respondent No. 2 - Central Board Excise and Customs, New Delhi to issue a detailed circular to all the adjudicating authorities considering the observations made by this Court in the present judgment and order as well as the law laid down by the Honble Supreme Court in various decisions referred to in the present judgment and order, within a period of 30 days from the date of receipt of the present order so that such eventuality may not happen again and again.
6. Respectfully following the case laws on the issue it has to be held that Cenvat Credit to the job-worker, on inputs directly purchased and used in the manufacture of finished/intermediate goods, will be admissible even if duty is discharged by the principal manufacturer. Accordingly, Appeal filed by the Appellant is allowed.
(Operative part of the order was pronounced in the open court.) SD/ (H.K.THAKUR) MEMBER(TECHNICAL) sm 6 Appeal No.EA-72073/13