Custom, Excise & Service Tax Tribunal
M/S. S.Kumars Nationwide Ltd vs Cce,Indore on 26 October, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Excise Appeal No.846 of 2009
(Arising out of Order-in-Appeal No.IND-I/202/2008 dated 2.12.08 passed by the CCE (A), Indore)
Date of Hearing: 26.10.2010
Date of Decision: 26.10.2010
For approval and signature:
Honble Mr.Ashok Jindal, Member (Judicial)
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 authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s. S.Kumars Nationwide Ltd. Appellant
Vs.
CCE,Indore Respondent
Present for the Appellant: Shri B.l.Narsimhan, Advocate/Shri
Heman Bajaj, Advocate
Present for the Respondent: Shri S.K.Bhaskar, SDR
Coram: Honble Mr.Ashok Jindal, Member (Judicial)
ORDER NO._______________
PER: ASHOK JINDAL
This appeal is directed against the impugned order denying the cenvat credit availed by the appellant on finished goods.
2. The facts of the case are that scrutiny of ER-1, it was revealed that the appellant has availed cenvat credit on grey fabrics as well finished goods. It was alleged that against the appellant that they are not entitled to avail cenvat credit on finished goods hence, the demand was confirmed and penalty is also imposed. Aggrieved by the said order, the appellant is in appeal before this Tribunal.
3. Learned Advocate for the appellant submits that as per Rule 16 of Central Excise Rules, 2002 the appellant has taken cenvat credit on the finished fabrics which they have exported on payment of duty. Hence, they are entitled for cenvat credit on finished goods. He has also relied upon the Circular No.283/117/96-CX, dated 31.12.1996 issued by the CBEC wherein the Board has clarified that the modvat credit in RG23A Part-II account against the export of inputs as such under bond can be utilized in the same manner as it is provided for a final product under proviso to Rule 57F(4). Obviously it follows from this that such inputs should be allowed to be exported under bond without any reversal of the credit. He also relied upon the decision of this Tribunal in the case of CCE, Ahmedabad vs. Tapsheel Enterprises reported in 2007 (216) ELT 284 (Tri.).
4. On the other hand, leaned DR reiterated the finding of the lower appellate authority.
5. Heard and considered.
6. On careful examination of the submissions made from both the side and the impugned order, I find that Rule 16 provides to take credit of duty on goods brought to the factory. Rule 16 (1) is reproduced hereunder:
Rule 16. Credit of duty on goods brought to the factory. (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules.
7. As per sub-rule 1 of Rule 16, the assessee is entitled to take cenvat credit on the goods which were brought to their factory for being re-made, refined, re-conditioned or for any other reason,. The assessee is entitled to take cenvat credit on receipt of such goods as inputs. The Boards Circular No.283/117/96-CX, dated 31.12.1996 has clarified that if the inputs are exported as such on that also the cenvat credit is available to the assessee. Further, I find that in the case of the Tapsheel Enterprises, this Tribunal has clarified that if the goods are brought to the factory for any other reason to be held bringing the goods in by the appellant for the purpose of testing and re-packing is permissible. The interpretation that the goods are brought to the factory for any other reason can be treated as goods can be removed as such.
8. From the above discussion, I find that the appellant has taken cenvat credit on the finished goods when they were brought to their factory but instead of any process they exported the same on payment of duty as such. From the clarification of the Board and as per Rule 16 of Central Excise Rules, 2002, the appellant is entitled to cenvat credit on the same. Accordingly, the impugned order is set aside and the appeal is allowed.
(Pronounced in the open court) (ASHOK JINDAL) MEMBER (JUDICIAL) mk 6 4