Custom, Excise & Service Tax Tribunal
Basf Construction Chemicals India Pvt. ... vs Commissioner Of Central Excise, ... on 12 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/25867/2013-SM [Arising out of Order-in-Appeal No. 449/2012 dated 17/12/2012 passed by the Commissioner of Central Excise, Bangalore-I ] BASF Construction Chemicals India Pvt. Ltd. No.269 A & B, Bommasandra Industrial Area, Hosur Road Bangalore Dist. 560 099 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, C.R Buildings, Bangalore - 560 001 Karnataka Respondent(s)
Appearance:
Ms Shruthi, Advocate For the Appellant Dr. J. Harish, Deputy Commissioner (AR) For the Respondent Date of Hearing: 12/10/2017 Date of Decision: 12/10/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 22432 / 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 17.12.2012 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant. Briefly the facts of the present case are that the appellants are engaged in the manufacture of excisable goods viz., Chemicals falling under chapter sub heading No. 38244090 of the Central Excise Tariff Act, 1985. The appellants are operating under Cenvat Credit Rules, 2004 (CCR in short). It appeared that the appellants are clearing their final products on payment of duty and also without payment of duty to Special Economic Zone (SEZ in short) and not maintaining separate accounts for the inputs used in the manufacture of excisable goods cleared without payment of duty to SEZ as required under Rule 6(2) of Cenvat Credit Rules, 2004. Hence the appellants were required to pay 10% of the total price of exempted goods as per Rule 6(3)(b) of Cenvat Credit Rules 2004 as it existed during the period up to 31.03.2008. Further, with effect from 01.04.2008, if the manufacturer did not maintain separate accounts, they shall either pay an amount equal to 10% of value of exempted goods cleared as per Rule 6(3)(i) of CCR or shall pay an amount equivalent to the cenvat credit attributable to inputs and input service used in or in relation to the manufacture of exempted goods subject to the conditions and procedures prescribed under Rule 6(3) (ii) ibid. Further, clearance of excisable goods removed without payment of duty to the developers of SEZs are not covered in the exclusion clause envisaged under Rule 6(6) of CCR during the period up to 30.12.2008. Thus it appeared that the appellants have not followed either of the requirements during the period from 14.02.2007 to 30.12.2008.
On these allegation, a show-cause notice was issued proposing to recover an amount of Rs. 20,39,402/- (Rupees Twenty Lakhs Thirty Nine Thousand Four Hundred and Two only) being 10% of the value of the clearances made to SEZ Developer without payment of duty along with interest and penalty. The original authority after following the due process of law confirmed the demand and aggrieved by the said order, appellant filed an appeal before the Commissioner who rejected the appeal of the appellant. Hence the present appeal.
2. Heard both the parties and perused the records.
3. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same is contrary to the binding judicial precedent on the same issue. She further submitted that SEZ unit is treated at par with the SEZ Developer and the goods cleared to SEZ Developer are not exempted goods. She further submitted that the goods cleared to SEZ Developer without payment of duty during the period from 14.02.2007 to 30.12.2008 are not exempted goods within the meaning of Rule 2(d) of the Cenvat Credit Rules, 2004. She further submitted that the goods cleared by the appellant to SEZ Developer is in terms of Section 26(1)(c) of the SEZ Act and not in terms of any notification issued under Section 5A(1) of the Central Excise Act 1944. She further submitted that the amendment to Rule 6(6) of the Cenvat Credit Rules 2004 by Notification No. 50/2008 CE dated 31.12.2008 should be given retrospective effect i.e. w.e.f. 10.09.2004 when the Cenvat Credit Rules 2004 came into existence and therefore no reversal of credit irrespective of inputs used in the manufacture of goods supplied to SEZ Developer is warranted under Rule 6(3)(1) of the Cenvat Credit Rules 2004. She further submitted that this issue is no more res integra and has been settled by the Honble High Court of Karnataka in the case of CCE Vs. Fosroc Chemicals (India) Pvt. Ltd. 2015 (318) E.L.T. 240 (Kar.) and Commissioner of Central Excise Vs. Lotus Power Gears 2017 (346) E.L.T. 347 (Kar.). Besides these two cases, the issue is settled in favour of the appellant by the following decisions:
a) CCE, Hyderabad Vs. Sujana Metal Products Ltd. 2013-TIOL-1128-HC-AP-ST
b) UOI Vs. Steel Authority of India Ltd. 2013 (297) E.L.T 166 (Chhattisgarh)
c) Ultratech Cement Ltd. Vs. CCE, Nagpur 2015 (315) E.L.T. 238 (Tri.-Mumbai)
d) S.P. Fabricators Pvt. Ltd. Vs. CCE, Belapur 2016 (334) E.L.T. 105 (Tri.-Mumbai)
e) Pace Seating Systems Pvt. Ltd. Vs. CCE, Bangalore Final Order No. 20607/2016 dated 02.08.2016
f) Sobha Developers Ltd. V. CCE, Bangalore Final Order No. 20643/2016 dated 18.08.2016
g) Rinac India Ltd. V. CCE, Bangalore Final Order No. 21104/2017 dated 24.07.2017
4. On the other hand the learned AR reiterated the findings of the impugned order.
5. After considering the submissions of both the parties, I find that the issue is no more res integra and has been settled in favour of the appellant by various decisions of the Tribunal and the High Courts cited supra and therefore, by following the decisions of the jurisdictional High Court in the case of Fosroc Chemicals (India) Pvt. Ltd. and Lotus Power Gears (P) Ltd. cited supra, I am of the considered opinion that the impugned order is not sustainable in law and the same is set aside by allowing the appeal of the appellant.
(Operative portion of the Order was pronounced in Open Court on 12/10/2017) (S.S GARG) JUDICIAL MEMBER iss