Custom, Excise & Service Tax Tribunal
M/S. Pfizer Ltd vs Commissioner Of Central Excise, ... on 14 November, 2014
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
E/1094/10
- Mum
(Arising out Order-in-Original No. Belapur/19/Bel-I/R-III/SLM/COMMR/2009-10 dated 23.03.2010 passed by the Commissioner of Central Excise & Customs, Belapur)
Appeal No.
E/1049/12
- Mum
(Arising out Order-in-Original No. Belapur/01/Bel-I/R-III/SLM/COMMR/2012-13/BEL dated 10.04.2012 passed by the Commissioner of Central Excise & Customs, Belapur)
For approval and signature:
Honble Mr. Ashok Jindal, Member (Judicial)
Honble Mr. P.K. Jain, Member (Technical)
1. Whether Press Reporters may be allowed to see No
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 Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Yes
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
M/s. Pfizer Ltd.
Appellant
Vs.
Commissioner of Central Excise, Belapur
Respondent
Appearance:
Shri J.H. Motwani, Advocate with Shri Prithviraj Chaudhary, Advocate for the appellant Shri S. Dewalvar, Addl.Comm.(AR) for the respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. P.K. Jain, Member (Technical) Date of hearing : 14/11/2014 Date of decision : 14/11/2014 O R D E R No:..
Per: Mr. Ashok Jindal, Member (Judicial) The appellants are in appeals against the impugned order wherein duty has been demanded on 10%/ 5% of the exempted/non-excisable goods cleared from the factory of the appellant.
2. In Appeal no. E/1094/10, the demand has been confirmed on clearance of non-excisable goods. In E/1049/12 the demand has been confirmed on 10% of the value of exempted goods cleared. As both the cases are inter-linked and having a common issue, therefore, both the appeals are disposed of by a common order.
3. The brief facts of the case are that the appellant is a manufacturer of medicaments wherein some products are excisable, some are exempted and some are non-excisable goods. During the impugned period, the appellant took the Cenvat credit of input and input service and capital goods. Revenue is of the view that the appellant is manufacturing excisable goods, non-excisable and exempted excisable goods and they are not maintaining separate account of their input credit/input service credit. Therefore, as per Rule 6(3) of CENVAT Credit Rules, they are required to pay 10% of the exempted/non-excisable goods as duty which appellant has failed to do so. Therefore, proceedings were initiated against the appellant. Initially, the order was passed demanding duty but the matter travelled to the Tribunal and this Tribunal remanded the matter to the Adjudicating Authority to pass an appropriate order in view of the amendment as per Section 73 of the Finance Act, 2010. In remand proceedings, the Adjudicating Authority after considering certain aspects of the said provisions, again passed the impugned order. Aggrieved from the said order and the remand order, the appellant is before us.
4. After hearing the argument of both sides, we find that some demand has been confirmed against the appellant by denial of the Cenvat credit on non-excisable goods. The said issue goes against the appellant in light of the decision in Elder Pharmaceuticals Ltd. vide order no. A/687-689/14/EB/CII dated 22.08.2014 holding that on non-excisable goods the appellant is not entitled to take Cenvat credit and as per Section 73 of the Finance Act, 2010 the appellant is required to reverse the Cenvat credit attributable to use in the manufacture of these non-excisable goods. In appeal, the appellant has contended that the show-cause notice has been issued by invoking the extended period of limitation, therefore demand is barred by limitation.
5. We are not convinced with the argument of the ld. counsel on the ground that the non-excisable goods are known to the appellant when they took the credit. Admittedly, the goods which are not excisable, on those goods input/input service credit or Cenvat credit on capital goods is not available to the assessees. These facts were not made known to the department by the appellant. Therefore, the extended period is rightly invoked against the appellant.
6. After further discussion, it emerged from the argument and from the records that non-excisable goods manufactured works to 47.9% of the total goods manufactured by the appellant. The appellant has taken Cenvat credit under Rule 6(5) of CENVAT Credit Rules, 2004 on common input services input used for excisable, exempted excisable and non-excisable goods. On the credit taken under Rule 6(5) of CENVAT Credit Rules, 2004 the appellant is not entitled to take Cenvat credit to the tune of 47.94% of Cenvat credit taken under Rule 6(5) of CENVAT Credit Rules, 2004. Therefore, the said credit is disallowed. But these facts are required to be ascertained from the documents produced before the Adjudicating Authority by the appellant.
7. It is the contention of the appellant that Cenvat credit of `32,64,679/- is taken by the appellant which relates to only dutiable goods. This fact is also to be ascertained by the Adjudicating Authority from the records. If this credit is not pertaining to common services then appellant is entitled to that Cenvat credit. In these circumstances, the impugned orders are set aside and remanded back to the Adjudicating Authority holding that Cenvat credit taken under Rule 6(5) of CENVAT Credit Rules, 2004 is inadmissible pertaining to non-excisable goods. In remand proceedings, the Adjudicating Authority shall verify and quantify the demand accordingly. In the facts of the case, the penalties are not imposable.
8. The Adjudicating Authority shall verify these facts and pass an appropriate order in accordance with law.
9. The appeals are disposed of in the above terms.
(Dictated in Court) (P.K. Jain) (Ashok Jindal) Member (Technical) Member (Judicial) //SR 5