Custom, Excise & Service Tax Tribunal
Cce Nagpur vs Solar Explosives Ltd on 29 September, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
Appeal No. E/792/09 - Mum
(Arising out of Order-in-Appeal No. SN/99/NGP/2009 dated 31.03.2009 passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur)
For approval and signature:
Honble Shri Ashok Jindal, 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 :
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?
CCE Nagpur
:
Appellants
Versus
Solar Explosives Ltd.
Respondents
Appearance Shri V.K. Singh, SDR for Appellants Shri Mayur Shroff, Advocate for Respondents CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 29.09.10 Date of Decision : 29.09.10 ORDER NO.
Per : Ashok Jindal The Revenue has filed this appeal.
2. The fact of the case are that the respondent availed CENVAT credit on service tax paid to the labour contractor and paid service tax for that. The respondent to take the work of crimping and soldering done by such contract labourers and on that job work, they paid service tax to the labour contractor and availed CENVAT credit. The CENVAT credit was denied for violation of Rule 6 of the CENVAT Credit Rules, 2004, saying that the CENVAT credit has been availed wrongly on account of job work without intimating these facts to the department and by suppressing these facts of taking such irregular credit, the demand was confirmed by the adjudicating authority. On appeal before the Commissioner (Appeals) the adjudication order was set aside. Aggrieved from the said order, Revenue is in appeal.
3. The learned DR submitted that the Commissioner (Appeals) has held that it is a case of revenue neutrality and secondly he relied on the decision by Sterlite Industries (I) Ltd. vs. Commissioner of Central Excise, Pune 2005 (183) ELT 353 (Tri. LB) of this Tribunal they are not applicable to the fact of this case. He submitted that in the case of Jay Yuhshin Ltd. vs. CCE New Delhi 2000 (119) ELT 718 (Tri. LB) wherein this Tribunal has observed as under:-
13. In the light of the above discussion, we answer the reference as under:
(a) Revenue neutrality being a question of fact, the same is to be established in the facts of each case and not merely by showing the availability of an alternate scheme;
(b) Where the scheme opted for by the assessee is found to have been misused (in contradiction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence;
(c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessees manufactured goods;
(d) We express our opinion in favour of the view taken in the case of M/s International Auto Products (P) Ltd. (supra) and the Revenue neutrality is not applicable to this case. With regard to the reliance of Sterlite Industries (I) Ltd. (supra) he submitted that in the issue dealt with by the Larger Bench is neither the goods were removed under exemption Notification nor the goods were chargeable to nil rate of duty. In this case the goods have been removed under Exemption Notification, hence, the decision of Sterlite Industries (I) Ltd. (supra) is not applicable to this case.
4. On the other hand the learned Advocate for the respondent submitted that the adjudicating authority in his order has held that the goods have not been removed under any exemption Notification and the same has been removed under job work challan by following the procedure as per Rule 4(5)(a) of CENVAT Credit Rules, 2004. In the case of Kinetic Engg. Ltd. vs. Commissioner of Central Excise, Pune III 2007 (208) ELT 526 (Tri. Mum) has held that following the decision of the Larger Bench decision in the case of Sterlite Industries (I) Ltd. (supra) that the inputs used in manufacture of final products cleared without payment of duty after job work, cannot be considered as used in exempted goods. Hence the impugned order is to be sustained.
5. Heard both sides.
6. I have gone through the submission made by both the sides. The learned DR argued the matter on two points. Firstly, in this case the situation of Revenue neutrality is not applicable as per the decision of Yuhshin Ltd. (supra) I have gone through the judgement and find that the Larger Bench of this Tribunal in that case has observed that revenue neutrality being a question of fact and it is to be seen in the light of the facts of each case hence, the argument of the learned DR is not convincing. Secondly, he argued the decision of Sterlite Industries (I) Ltd. (supra) is not applicable to this case as the have been cleared under exemption Notification and in the case of Sterlite Industries (I) Ltd. (supra) the Larger Bench did not deal such a situation. In the facts of this case it is found that the activity of the process of crimping and soldering carried out by the respondent on the inputs like PVC coated GI wires, Aluminum Filled Shells, Fuse heads etc supplied by its principal results in to manufacture of distinct and new product namely detonator and therefore it does not fall under the purview of Business Auxiliary Services And once it does not fall under the BAS, availing of exemption under Notification No. 8/05 does not arise. Hence, the decision of Sterlite Industries (I) Ltd. is squarely applicable to the facts of this case. Hence, I do not find infirmity in the impugned order and the same is upheld. Appeal filed the Revenue is rejected in the above terms.
(Pronounced in Court) (Ashok Jindal) Member (Judicial) nsk 5