Custom, Excise & Service Tax Tribunal
M/S Jct Limited vs Cce, Jallandhar And Ludhiana on 8 January, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III DATE OF HEARING : 08/01/2015. DATE OF DECISION : 08/01/2015. Excise Appeal Nos. 330-331 of 2009 and 555-556 with 1048-1049 of 2009 [Arising out of the Order-in-Appeal No. 776-777/CE/APPL/JAL/ 2008 dated 17/12/2008 and 35-36/CE/APPL/JAL/2009 dated 12/02/2009 both passed by The Commissioner (Appeals), Central Excise, Jallandhar.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) Honble Shri S.K. Mohanty, 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 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? M/s JCT Limited Appellant Versus CCE, Jallandhar and Ludhiana Respondent
and vice-versa Appearance Shri Rajesh Chhibber, Advocate for the Appellant.
Shri Pramod Kumar, Authorized Representative (Jt. CDR) for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) Honble Shri S.K. Mohanty, Member (Judicial) Final Order No. 50086-50091/2015 Dated : 08/01/2015 Per. Rakesh Kumar :-
The issues involved in these appeals filed by M/s JCT Limited (hereinafter referred to as the Assessee) and also filed by the Revenue, are common and hence these appeals were heard together and are being disposed of by a common order. The Assessee in their composite mill manufactured cotton yarn from cotton and used the same within the factory for weaving of fabrics. In respect of captive clearances of cotton yarn, they were availing full duty exemption under Notification No. 30/04-CE dated 09/07/04 under which the goods covered by this notification are fully exempt from duty, if no Cenvat credit in respect of inputs have been taken. The period of dispute in this case is in respect of the November 2005, December 2005, and January to March 2006. During these periods, the Assessee took Cenvat credit in respect of the excise duty paid on packing material. The Cenvat credit in respect of packing material taken during January to March 2006 was Rs. 2,753/- and the same during November 2005 and December 2005 was Rs. 1,622/-. Subsequently on being pointed out by the Department, they reversed the credit and there is no dispute that this credit was not utilised by the assessee for payment of duty on any of their final product. The Department subsequently was of the view that since the Assessee had taken Cenvat credit in respect of inputs, they would not be eligible for the benefit of Notification No. 30/04-CE even if the credit was subsequently reversed. It is on this basis that the benefit of exemption Notification No. 30/04-CE was denied to the appellant and duty demands were confirmed by two separate orders-in-original. The original Adjudicating Authority while confirming the duty demand by denying the exemption Notification No. 30/04-CE allowed the cum duty benefit, that is, he treated the sale price of the yarn as including the excise duty and permitted the abatement of excise duty. The original Adjudicating Authority while confirming the duty demand alongwith interest also imposed penalty on the appellant. While the Revenue challenged before Commissioner (Appeals) the orders of the original Adjudicating Authority in respect of permitting the cum duty benefit, the assessee challenged the orders of the original Adjudicating Authority confirming the duty demand by denying the exemption and imposing the penalty. The Commissioner (Appeals) by four separate orders, upheld the lower authoritys order with regard to confirming of duty demand, but did not accept the Revenues plea that cum duty benefit should not be allowed. The Commissioner (Appeals), however, set aside the penalty. Against these orders of the Commissioner (Appeals) while the Assessee have filed appeals against the portion of the order confirming duty demand, the Revenue is in appeal against the part of the order of the Commissioner (Appeals)s setting aside the penalty and permitting the cum duty benefit.
2. Heard both the sides.
3. Shri Rajesh Chhibber, Advocate, the learned Counsel for the appellant, pleaded that the core issue involved in these cases is as to whether the benefit of Notification No. 30/04-CE would be admissible to the Assessee during November and December 2005 and January to March 2006, that the only ground for denial of the exemption benefit is that the assessee during these periods had taken Cenvat credit on packing material, that while the assessee during November and December 2005 period had taken the credit of Rs. 1,622/- and during January to March 2006 had taken the credit of Rs. 2,753/-, they had not utilised it and had reversed both the credits immediately on being pointed out by the Department, that in view of this, for the purpose of Notification No. 30/04-CE they should be treated as not having availed the Cenvat credit, that once the credit taken in respect of inputs has been reversed, the same has to be treated as the not having been availed, that in this regard he relies upon the judgment of the Apex court in the case of Chandrapur Magnet Wire (P) Ltd. vs. CC, Nagpur reported in 1996 (81) E.L.T. 3 (S.C.) and also the judgment of Honble Allahabad High Court in the case of Hello Minerals Water (P) Ltd. vs. Union of India reported in 2004 (174) E.L.T. 422 (All.), wherein Honble Allahabad High Court relying upon the Apex courts judgment in the case of Chandrapur Magnet Wire (P) Ltd. vs. CC, Nagpur (supra) has taken the same view, that in view of this, the impugned order upholding the duty demand based on denial of the exemption Notification No. 30/04-CE is not correct, that since the demand itself is not sustainable, the other issues imposition of penalty or denial of cum duty benefit would not arise and as such there is no merit in the Revenues appeal. He, therefore, pleaded that the impugned order confirming the duty demand based on denial of the Notification No. 30/04-CE is not sustainable.
4. Shri Pramod Kumar, learned Jt. CDR, defended the impugned orders of the Commissioner (Appeals) confirming the duty demands based on the denial of exemption Notification No. 30/04-CE. He pleaded that once the Cenvat credit has been taken, the benefit of exemption Notification No. 30/04-CE would not be available as this exemption is subject to the condition that no input duty has been taken and in this regard subsequent reversal of the credit would not make any difference. He, therefore, pleaded that the Commissioner (Appeals) has correctly upheld the confirmation of duty demand. He, however, assailed the Commissioner (Appeals)s order regarding permitting cum duty benefit and setting aside the penalty by reiterating the grounds of appeal in the Revenues appeals.
5. We have considered the submissions from both the sides and perused the records.
6. The core issue in these appeals is as to whether in the circumstances of the case, the assessee would be eligible for benefit of exemption Notification No. 30/04-CE. There is no dispute that the benefit of the exemption notification is subject to the condition that no duty credit that is taken but the assessee during November and December 2005 had taken Cenvat credit of Rs. 6,622/- in respect of certain inputs and during January to March 2006 had taken Cenvat credit of Rs. 2,753/- in respect of certain inputs. However, the Assessees claim that this credit had not been utilised and had been reversed as soon as this irregularity was pointed out by the Department is not refuted by the Department. Since the credit taken was reversed without being utilised, in our view, the judgment of Honble Allahabad High Court in the case of Hello Minerals Water (P) Ltd. vs. Union of India (supra) which is based on the Apex courts judgment in the case of Chandrapur Magnet Wires (P) Ltd. vs. CC, Nagpur (supra) would be applicable to the facts of this case and the Assessee have to be treated as not having taken the Cenvat credit and would be eligible for the exemption benefit. In view of this, the impugned order denying the benefit of exemption Notification No. 30/04-CE and confirming the duty demand on this basis against the Assessee is not sustainable and the same is set aside. Since the duty demand itself has been set aside the Revenues appeals regarding denial of cum duty benefit exemption and penalty also would not survive. Thus, while the appeal No. E/330-331 of 2009 are allowed and the appeal No. E/555-556 of 2009 and 1048-1049 of 2009 filed by the Revenue are dismissed.
(Dictated and pronounced in open court.) (Rakesh Kumar) Member (Technical) (S.K. Mohanty) Member (Judicial) PK ??
??
??
??
6