Custom, Excise & Service Tax Tribunal
M/S Umax Packaging Ltd vs C.C.E. & S.T. Jaipur-Ii on 26 May, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. E/60489/2013 -Ex[SM]
[Arising out of Order-In-Appeal No. 99 (OPD)/CE/JPR-II/2-13 dated: 26.08.2013 passed by Commissioner (Appeals) Jaipur-II]
For approval and signature:
Hon'ble Mr. 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 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 Umax Packaging Ltd. ...Appellant
Vs.
C.C.E. & S.T. Jaipur-II Respondent
Appearance:
Mr. Abhishek Jaju, Advocate for the Respondent Mr. Devender Singh, DR for the Appellants CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing.26.05.2015 FINAL ORDER NO. 53014 /2015 Per S. K. Mohanty:
Brief facts of the case are that the appellant is engaged in the manufacture of Flexible Roles and Plastic Pouches falling under Chapter 39 of the Central Excise Tariff Act, 1985. During the period April, 2008 to February 2009, the appellant had availed Cenvat Credit of Rs. 2,32,980/- on MS Angles, Channels, Steel Sheets etc., treating the same as input for the capital goods manufactured within the factory. Credit taken by the appellant on the disputed goods was objected by the Central Excise Department through initiation of the show cause proceedings, which culminated in the Adjudication Order. Cenvat Demand confirmed in the said order was upheld by the Commissioner (Appeals) vide the impugned order. Hence, this present appeal before this Tribunal.
2. Ld. Advocate Sh. Abhishek Jaju appearing for the Appellant, submits that the disputed goods have been used as input for the thermal system pipeline support and bridging, which are the capital goods for the appellant. He further submits that the angles, channels and steel sheets have been used for making the tanks and its base in the thermal system pipeline and also the same have been used in making tanks for chilling system of machines installed in the plant. According to the Ld. Advocate, by nature of use of the disputed goods, the same should be considered as input, and as such, duty paid on those input goods are eligible for cenvat credit to the appellant. With regard to the limitation aspect, the submission of the Ld. Advocate is that since the period involved in the present dispute is from April, 2008 to February 2009, and the SCN having been issued on 16.04.2010, the same is clearly barred by limitation of time, in absence of any specific findings regarding involvements of the appellant in the activities concerning suppression, misstatement, fraud, collusion with intent to evade payment of duty. To justify his above stand, the Ld. Advocate has cited the decision of this Bench of the Tribunal in the case of High Tech Equipments & Spares Pvt Ltd. vs CCE Raipur (Final Order No. A/58186/2013-SM[BR]) dated 5.11.2013 and CCE Raipur vs Hi-tech Power & Steel Ltd. reported in 2015 (315) ELT 428 (Tri. Del). He further submits that this Tribunal has passed these two decisions based on the judgment of Honble Supreme Court in the case of Continental Foundation Joint Venture vs CCE Chandigarh-I reported in 2007 (216) ELT 177 SC.
3. Countering the submissions made by the Ld. Advocate for the appellant, the Ld. Jt. CDR for the Revenue, Mr. Ravinder Singh, while reiterating the findings recorded in the impugned order, submits that part of the demand confirmed in the impugned order is within one year from the relevant date, and as such, the SCN issued on 16.04.2010 is not barred by limitation of time. He further submits that since the appellant has categorically stated that the inputs are building material, whose eligibility to cenvat credit has been denied in the definition clause of Input Service and also by the CBEC in the circular dated 15.1.2002; the SCN has been rightly issued by invoking the extended period of limitation as contained in the proviso to section 11A of the Central Excise Act, 1944.
3. I have heard the Ld. Counsel for both the sides and perused the records.
4. The dispute regarding eligibility of cenvat credit on the steel items has so far not been attainted finality, and as such, there was scope for an assessee to entertain the reasonable belief that credit is permissible on the disputed goods. In case of conflicting decisions on the issue regarding entitlement to cenvat credit, the SCN should be confined to one year period for raising the demand. The extended period of limitation of five years cannot be invoked in absence of any proof that the assessee is indulged in any fraudulent activities with intention to defraud the Government Revenue.
5. In the present case, no iota of evidence has been brought on record by the Department to prove that taking of cenvat credit by the appellant is attributable to suppression, misstatement, collusion etc., with intent to evade payment of duty. Thus in such an eventuality, the SCN was required to be issued within one year from the relevant date. In so far as the SCN dated 16.04.2010 period 2008-2009 is concerned, in my view, the same is barred by limitation of time, having been issued beyond the period of one year. However, in so far as the credit taken for the period 2009-2010, the SCN has been issued within limitation period prescribed under Section 11A of the Central Excise Act. Thus as per the decision of the Larger Bench of the Tribunal in the case of Vandana Global Ltd. vs CCE Raipur, the appellant is liable to reverse cenvat credit attributable to such ineligible credit along with interest.
5. Imposition of penalty under Rule 15(2) of the Cenvat Credit Rules 2004, read with section 11AC of the Central Excise Act 1944 is not justified in the facts and circumstances of the present case, especially in view of the fact that there was no element of suppression, misstatement, collusion, fraud etc., on the part of the appellant to defraud payment of Revenue to the Government exchequer.
6. To sum up, SCN initiated for the period April 2008 to February 2009 is barred by limitation of time as per the proviso to section 11A of the Central Excise Act, 1944 and to that extent the appeal succeeds. With regard to the period 2009-2010, I am of the view that wrongly availed cenvat credit can be recovered from the appellant along with interest. Thus, the period 2009-2010 is dismissed.
7. The appeal is disposed of in above terms.
(Dictated and pronounced in open court) (S.K. Mohanty) Member(Judicial) Neha Page | 1