Custom, Excise & Service Tax Tribunal
Action Construction Equipment P Ltd vs Cce-Delhi-Iv on 27 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL R.K. PURAM, WEST BLOCK NO. 2, NEW DELHI-110066 SINGLE MEMBER Date of hearing: 27/7/2015 Date of pronouncement: 02/09/2015 Appeal No. E/53378/2014-EX[SM] [Arising out of Order-in-Appeal No. 31/CE/Appeal/ DLH-IV/2014 dated 21.03.2014 passed by Commissioner (Appeals), Central Excise, Delhi-IV) For Approval and Signature: Honble Smt. Sulekha Beevi C.S., Member (Judicial) 1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 Department Authorities? Action Construction Equipment P Ltd. Appellant. Vs. CCE-Delhi-iv Respondent
Appearance: Shri Vipin Upadhyay, Advocate for the appellant.
Shri G.R. Singh, DR for the respondent.
Coram: Honble Smt. Sulekha Beevi C.S., Member (Judicial)
Final Order No. 52730/2015
Per: Sulekha Beevi C.S.
The appeal is filed against the impugned order which upheld the disallowance of CENVAT Credit (Rs. 4,19,2005/-) on inputs.
1. The appellants are engaged in the manufacture of Hydraulic Mobile Crane and Tower Crane and are also availing CENVAT Credit of central excise duty paid on inputs. Pursuant to audit it was observed that appellants had availed credit on parts of Mobile Tower Crane (MTC) whereas the appellants have neither manufactured nor cleared these goods. Also that the copies of Bills of Entry (B/E) under which the inputs were imported did not tally with regard to the description of inputs and also their value. The show cause notice issued on the above allegations finalized in the order dated 9.11.2012 which disallowed the credit. Being aggrieved the appellants filed appeal and vide above impugned order, the same was upheld. Hence this appeal.
2. The learned counsel for appellant advanced his arguments both on merits as well as on the issue of limitation. The period in dispute is 2006-2007 and 2007-2008. Regarding the allegation, the MTC was neither manufactured or cleared by the appellants, it is explained by the learned advocate that after import, the inputs (part of MTC) were stock transferred, from their factory premises at Ballabgarh to their sister concern Palwal Unit. The appellants issued invoices in terms of Rule 3 (5) of the CENVAT Credit Rule and the MTC parts imported were thus transferred to Palwal Unit. The Palwal Unit utilized these inputs in the manufacture of final products viz, MTC. Regarding the allegation of variance in description of goods and also value stated in the Bill of Entry and invoices, it is their case that the descriptions in both documents are substantially the same. The difference in the value as regard the Bill of Entry and invoices is on account of various duties and cess paid by the appellants at the time of import of inputs. Such duty element is not shown in the value stated in Bill of Entry but was included in the value shown in the invoices issued at the time of stock transfer. Regarding the issue of limitation, the learned counsel pointed out that the show cause notice did not contain any allegation of suppression or mis-statement on the part of appellants. The show cause notice dated 20.05.2011 is for the period 2006-2007 to 2007-2008. That the appellants had rightly availed the credit.
3. Controverting the above submissions the learned DR referred to the definition of input in Rule 2 (k) of the Credit Rules and contended that the inputs should be used in or in relation to manufacture of final product. That MTC was neither manufactured or cleared by the appellant. He referred to the discrepancies in the description of goods in the Bill of Entry and invoices and submitted that there is much variation and that the appellants are not entitled for credit.
4. I have heard the submissions and perused the records carefully. The first ground on which credit is denied is that appellant never manufactured/cleared any MTC. The records did not show any sale of MTC. Therefore, credit was denied on the presumption that inputs were not used in the manufacture of MTC. It is seen from records that appellants have explained in their reply to the show cause notice that the inputs imported were stock transferred under proper invoices to their sister concern at Palwal Unit. Department has no case that appellants Palwal Unit is not manufacturing/clearing MTC. So, also there is no case that these inputs were diverted or alienated in any manner. I find that authorities below ought to have accepted the explanation offered by appellant which was supported by documents of stock transfer.
5. The next allegation is with regard to the variation of description of goods and their value stated in the Bill of Entry and the invoices. Again, the appellant has replied to the show cause notice stating that the value shown in the Bill of Entry is the customs duty value which is the assessable value. In the invoices, being stock transfer, the sale value included all taxes and 10% margin of profit. That therefore, the assessable value in the Bill of Entry is less than the sale value shown in the invoice. A comparable table showing the value in Bill of Entry and value in sale invoice is given. On perusal of the same, the submission of the appellant is correct. Therefore, I find that the allegation that value of inputs in invoices did not match with that in Bill of Entry, is baseless. The other allegation is that the inputs stated in these documents did not match description-wise. In the Bill of Entry, the description is given as gear box. In the sale invoice it is described as a slew gear box, Hoist gear box. Again in Bill of Entry, the description is slewing Ring whereas in the invoice, the description is slew Ring, S-Ring CBE-1200. I cannot agree with the contention of the Respondents that these are major discrepancies on which the benefit of credit can be denied. I do not find any markable variation in the description of inputs in these documents.
6. The show cause notice is dated 20.05.2011. The demand is for the period 2006-2007 to 2007-2008. The appellant has been filing periodical returns and availing credit. No wilful mis-statement or suppression with intention to evade duty is established against the appellants. In such circumstances the extended period is not invokable. The demand is therefore time barred. The substantial issue as well as the issue on limitation is found in favour of appellant.
7. In the result, the impugned order disallowing the credit is set aside. The appeal is allowed with consequential reliefs, if any.
(Sulekha Beevi C.S.) Member (Judicial) Ritu 5