Custom, Excise & Service Tax Tribunal
M/S. Manaksia Ltd vs Commissioner Of Central Excise, ... on 13 November, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Misc. Application (ROA)No.76100/2017 and
Appeal No.E/76764/2016
(Arising out of Order-in-Appeal No.55/KOL-IV/16-17 dated 16/08/2016 passed by the Commissioner of Central Excise (Appeal-II), Kolkata)
M/s. MANAKSIA Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Kolkata-IV
Respondent (s)
Appearance:
Ms. Dimple Jogani, CA for the Appellant (s) Shri A.K.Biswas, Suptd.(AR) for the Respondent (s) CORAM:
Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing/Decision:- 13.11.2017 ORDER NO.MO-75378/2017 & F/O-77852/17 Per Shri P.K.Choudhary
1. The Misc. Application for Restoration of Appeal was filed on 30.10.2017. The appeal was dismissed for non-prosecution vide Final Order No.FO/77336/2017 dated 06.09.2017. Ld. Counsel appearing on behalf of the appellant submits that the notice for hearing of the case fixed on 06.09.2017 was not received by the appellant and hence they were unable to appear on the date fixed and accordingly requested for restoration of the appeal.
2. In view of the submission of the ld. Counsel the appeal dismissed vide Final Order No. FO/77336/2017 dated 06.09.2017 is restored. Since the issue lies in a narrow campus, the same is also taken up for hearing.
3. Ld. Counsel for the appellant submits that Commissioner (Appeals) did not decide the appeal on merit but dismissed the same as non maintainable alleging non-compliance of provision of Section 35F(1) of the Central Excise Act, 1944.
4. Heard both sides and perused the appeal records.
5. I find that Commissioner (Appeals) observed that the appellant had made the pre-deposit by utilizing the cenvat credit account, which in his opinion cannot be considered as payment by the appellant in respect of pre-deposit and accordingly, he dismissed the appeal as non maintainable without going into the merits of the case. Relevant portion of the order of the Commissioner (Appeals) is reproduced below:
7. Further, I find that the Commissioner of Central Excise (Appeals-II), Kolkata in a number of Orders-in-Appeals viz. 04/HAL/2016 dated 15.02.2016 and 05/KOL-II/2016 dated 15.02.2016 has dismissed all such appeals filed on or after 06.08.2014 by making pre-deposit from Cenvat Credit Account. I have also dismissed an appeal on identical ground in the case of M/s. United Chloro Paraffins Pvt. Ltd. vide Order-in-Appeal No.31/ST-II/Kol/16-17 dated 13.05.2016.
8. In view of the discussion above, I am not inclined to admit the above appeal for non-compliance of the provisions of Section 35F(1) of the Central Excise Act, 1944. Accordingly, I dismiss the above appeal as being non-maintainable.
6. I find that this Tribunal in a number of cases held that payment of pre-deposit from cenvat credit account is permissible for utilizing as per Rule 3(4) of Cenvat Credit Rules, 2004 vide Final Order No.FO/A/75930-75939/2016 dated 29.08.2016. The relevant portion of the order is reproduced below:
5. Heard both sides and perused the case records. The issue involved in the present proceedings is whether mandatory deposit of seven and half per cent as per Section 35F (i) of the Central Excise Act 1944, is required to be paid in cash or the same can be paid from CENVAT Credit Account maintained by the appellants. Relevant Section is reproduced below:
SECTION 35F. Deposit of certain percentage of duty demanded or penalty imposed before filing appeal-The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal-
(i) under sub-section (1) of section 35, unless the appellant has deposited seven and a half per cent. Of the duty, in case where duty or duty and penalty are in dispute, or penalty , where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank that the [Principal Commissioner of Central Excise or Commissioner of Central Excise 5.1 It is observed from the above provisions that it is not specifically mentioned that amount has to be deposited only by way of cash payment.First Appellate Authority in para 3.1 of Order-in-Appeal dated 15/2/2016 has discussed Rule 3 (4) of the CENVAT Credit Rules, 2004 indicating the situation where CENVAT Credit can be utilised. In a case of dispute about admissibility of CENVAT Credit, ultimate action against an assesse, if found to be inadmissible to CENVAT Credit, will be to reverse CENVAT Credit taken. In such a case there may not be any need to make pre deposit in cash. Similarly, in the case of demand of duty, if CENVAT Credit is permissible for payment of tax, the same can always be debited from CENVAT Account of an assesse. As per procedure followed by CESTAT Registry at Kolkata, payments made from CENVAT Credit Account are considered as due payments for considering as deposit under Section 35F (ii) and (iii) of Central Excise Act, 1944. First appellate authority could have a view if debit of mandatory deposit was with respect to personal penalty or payment of interest.
6. In view of the above observations the view taken by the First Appellate Authority, that deposit under Section 35F (i) cannot be made from CENVAT Credit Account, is not the correct appreciation of law so long as the CENVAT Credit is permissible for utilisation as per Rule 3(4) of the CENVAT Credit Rules, 2004. Accordingly, appeals filed by the appellants are allowed by way of remand to the First Appellate Authority with directions to decide the appeals on merits.
7. In view of the above discussions the appeal filed by the appellant is allowed by way of remand to the Commissioner (Appeals) to decide the appeal on merit. Needless to mention that a reasonable opportunity of hearing be granted to the appellant.
8. Misc. Application (ROA) is disposed of and the appeal is allowed by way of remand.
(Dictated and Pronounced in the Open Court) S/d.
(P.K.Choudhary) MEMBER (JUDICIAL) ss 4 Appeal No.E/76764/2016