Custom, Excise & Service Tax Tribunal
New Vishvekarma Autotech Pvt. Ltd vs C.C.E., Delhi-Iv on 18 September, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Single Member Bench
Appeal No. E/55618/2014-EX(SM)
(Arising out of Order-in-Appeal No. 178-180/CE/APPL/DLH-IV/2014 dated 08/09/2014 passed by Commissioner of Central Excise (Appeals), Delhi-IV)
Date of Hearing: 03/09/2015
Date of Pronouncement:18/09/2015
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?
New Vishvekarma Autotech Pvt. Ltd. Appellant
Vs.
C.C.E., Delhi-IV Respondent
Appearance:
Present for the Appellant: Shri N.K. Sharma, Advocate Present for the Respondent: Shri B.B. Sharma, AR Coram: Honble Ms. Sulekha Beevi C.S., Member (Judicial) Final Order No.55886/2015 Per: Sulekha Beevi C.S.
1. The appeal is filed challenging the impugned order which disallowed the Cenvat credit availed on bright bars on the ground that these are not excisable commodity.
2. The appellants are engaged in the manufacture of vehicle parts and where availing Cenvat credit on bright bars. Three separate show cause notices for the periods from July 2003 to September 2003, October 2003 to February 2004 and October 2004 to December 2005 respectively were show cause notice was issued to the appellants alleging that in view of Honble Supreme Court judgment in the case of Vee Kayan Industries 1996 (83) ELT262 (SC) and further clarified by CBEC through Circular No. 720/36/2003 CX dated 29/05/2003 that no process of manufacture was involved during the transformation of round bars into Bright Bars, and bright bars thus not being excisable commodity Cenvat credit is not admissible on bright bars used as inputs. The notice finalized in the order which confirmed the demand and imposed penalty. In appeal, the same was upheld Commissioner appeals set aside the demand and penalty with regard to the periods in the 1st and 2nd show cause notices but held the demand (Rs. 97,746) and penalty in regard to the 3rd show cause notice. Aggrieved, the appellant is before the Tribunal.
3. The short question involved is whether the appellants are entitled to credit on the duty paid on bright bars used as inputs. According to Department the manufacturer who supplied the bright bars was not liable to pay duty on these items as no process of manufacture was involved in the transformation of bright bars from round bars and therefore the appellants cannot avail credit on these items. The payment of duty on bright bars is not disputed. So also there is no dispute that bright bars where used by the appellants to manufacture their final product. Again there is no case that the inputs supplied were not covered by valid document prescribed under the Cenvat Credit Rules, for availing credit. The benefit of credit is sought to be denied on the ground that on the end of the supplier these goods were not excisable goods.
4. Interestingly, although the Apex Court in its judgment dated 20.09.1994 in CCE, Chandigarh Vs Vee Kayan Industries, 1996 (83) ELT 262 (SC) had held that the processing of round bars into Bright bars would not amount to manufacture, the Department by Trade Notice No. 18/2003 dated 14/08/2003 has clarified that the process of making bright bars from wire rods amounts to manufacture. Duty was being collected upon bright bars and credit was being availed on such goods. A further trade notice dated 16/06/2004 was issued recording the clarification issued in the trade notice No. 18/2003. It is discussed by the Commissioner (Appeals) that the issue was contentious and involved interpretation and therefore protective demands were issued during that time. It is seen that the cases were kept pending in the call books after issuance of show cause notices in 2006. Thereafter the matter has been adjudicated and order passed only on 19.02.2014. This goes to show that the Department itself was under much confusion as to whether excise duty is leviable on bright bars. The Ld. Counsel for the appellant submitted that these items were supplied by suppliers viz; Joneja Bright Steel (P) Ltd and others. The Tribunal vide Final Order No.A/5449854502/2014 EX[DB] dated 20/11/2014 has held that the appellants therein (Joneja Bright Steel (P) Ltd & others) are entitled to avail credit on the excise duty paid on the inputs. The Tribunal in that case has taken the view that as appellants have discharged the duty liability on their final product after availing credit, there is no justification to deny the same. If the supplier who supplied the goods is allowed credit even though the finished product is not an excisable commodity I cannot find any reason to deny the credit to the appellants who have received the goods by paying the duty. In CCE, Hyderabad vs. Deepthi Formulations Ltd 2012 (286) ELT 396 (TRI- Bang) the Tribunal has taken the view that when the input is received in the factory and used in or in relation to manufacture of final product and payment of duty is evidenced by the invoices the credit cannot be denied. The question whether the input is a result of a process of manufacture is irrelevant. What is relevant is whether duty has been paid or not on such input.
5. In view of the above impugned order is set aside. The appeals allowed with consequential reliefs if any.
(Pronounced on 18/09/2015) (Sulekha Beevi C.S.) Member (Judicial) K. Gupta ??
??
??
??
4