Custom, Excise & Service Tax Tribunal
M/S Glass And Ceramic Decorators vs Commissioner Of Central Excise, ... on 19 February, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/87293/13 (Arising out of Order-in-Appeal No. BR/61/M-I/2013 dated 29.3.2013 passed by the Commissioner of Central Excise (Appeals), Mumbai-I ). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
======================================================
M/s Glass and Ceramic Decorators
Appellant
Vs.
Commissioner of Central Excise, Mumbai-I
Respondent
Appearance:
Ms. Anjali Hirawat, Advocate
for Appellant
Dr. B.S. Meena, Addl. Commissioner (AR)
for Respondent
CORAM:
SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL)
SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)
Date of Hearing: 19.02.2014
Date of Decision: 19.02.2014
ORDER NO.
Per: P.R. Chandrasekharan
The appeal is directed against the Order-in-Appeal No. BR/61/M-I/2013 dated 29.3.2013 passed by the Commissioner of Central Excise (Appeals), Mumbai-I.
2. The appellant, M/s Glass and Ceramic Decorators, Andheri (E), Mumbai imported Glass Printing Machine during the year 2003-04 and availed CENVAT Credit of Rs.23,33,282/- in two installments i.e. 2003-04 and 2004-05. Subsequently, the appellant exported this machine in 2006 under bond without reversal of CENVAT Credit taken. The Revenue was of the view that the appellant had not put the machinery to use and, therefore, they were not eligible to take the credit and, therefore, they were required to reverse the credit taken when the capital goods were cleared as such from the factory.
2.1 In the first round of litigation, when the matter came up before the Tribunal, since there was dispute about the use and otherwise, the matter was remanded back to the adjudicating authority for consideration afresh and to pass a speaking order taking into account the various evidences produced by the appellant. In the second round of litigation also, the Revenue has confirmed the demand of CENVAT Credit taken along with interest and penalties and the lower appellate authority has also upheld the said decision of the adjudicating authority. Aggrieved of the same, the appellant is before us.
3. The learned Counsel for the appellant submits that the CBE&C vide Circular dated 31.12.1996 had clarified that the manufacturer, who has taken CENVAT Credit, can export the goods under bond without payment of duty and this facility was available as per the excise procedure. Therefore, there is no bar on the manufacturer to remove inputs/capital goods in terms of the Explanation under sub-rule (2) of Rule 18. This clarification was reiterated in the Circular dated 29.08.2000 in the context of the Cenvat Credit Rules and it was made clear that the assessee who takes the credit can remove the inputs/capital goods on which the credit has been taken for export under bond. An identical issue had come up before the Tribunal in the case of Videocon International Ltd. Vs. Commissioner of Central Excise, Vadodara-II 2009 (235) ELT 135 (Tri-Ahmd), wherein it was held as follows: -
We feel that it would be futile to go into the merits of the order in view of the letter issued by the Board F. No. 345/2/2000-TRU, dated 29-8-2000, which has been cited by the Commissioner (Appeals). The Commissioner (Appeals) has not followed the letter on the ground that under Rule 19, only excisable goods can be exported under bond. Now the law is well settled that if there is a circular beneficial to the party, that has to be given effect to in view of the judgment of the Honble Supreme Court in Collector v. Dhiren Chemical Inds. Ltd. reported in 2002 (139) E.L.T. 3 (S.C.). We also find that in the Central Excise Manual published by the CBEC also it has been specifically stated that there is no bar for a manufacturer to remove the inputs or capital goods as such for export under bond. In view of the Boards letter and the Manual providing this benefit, we feel that there is no need to go into other issues and accordingly the appeal is allowed with consequential relief to the appellants. In view of the above, the learned Counsel pleads for allowing the appeal.
4. The learned Addl. Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities. It is his contention that Rule 3(5) does not make any distinction between domestic clearance and export clearance and in both the situation, if the goods are removed as such, the appellant has to reverse the credit and, therefore, in this case also, the appellant should reverse the credit. Therefore, the findings of the lower authorities are sustainable in law.
5. We have carefully considered the submissions made by both sides.
5.1 It is not in dispute that the capital goods imported by the appellant have been exported. On export of capital goods, the appellant is eligible for rebate of the duty paid thereon under Rule 18 of the Central Excise Rules or the appellant can export the goods without payment of duty under bond under Rule 19 of the said Rules. In respect of the goods on which credit has been taken, Circular issued by Board in 1996 as well as in 2000, clearly says that the manufacturer assessee is entitled to clear the inputs or capital goods for export (on which credit has been taken) under bond without payment of duty. The decision of the Tribunal in the case of Videocon International Ltd. (supra) also confirms this view.
5.2 We also note that in the case of Essel Propack Ltd. decided vide Order No. A/1023/13/EB/C-II dated 20.11.2013, an identical issue came up for consideration before this Tribunal, where the capital goods procured on which credit was taken was subsequently re-exported without reversal of credit and this Tribunal in the said case held that the appellant is not required to reverse CENVAT Credit on the capital goods exported.
6. Following the ratio in the above decision, in the present case also, we hold that the appellant is not required to reverse CENVAT Credit taken on the capital goods, which was procured and subsequently re-exported. Accordingly, we allow the appeal for consequential relief, if any, in accordance with law.
(Dictated and pronounced in Court)
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
1