Custom, Excise & Service Tax Tribunal
Aurobindo Pharma Ltd vs Commissioner Of Central Excise ... on 17 January, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No . 20045 / 2014 Appeal(s) Involved: E/865/2008-SM [Arising out of Order-in-Appeal No. 92/2008 dated 08/09/2008 passed by Commissioner of Central Excise & Customs (Appeals) Visakhapatnam] AUROBINDO PHARMA LTD PLOT NO.2, MYTHRI VIHAR, AMEERPET, HYDERABAD Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax - VISAKHAPATNAM-I CENTRAL EXCISE BUILDING PORT AREA VISAKHAPATNAM ANDHRA PRADESH 530035 Respondent(s)
Appearance:
Mr. G.P. Shastry, Adv For the Appellant Mr R. Gurunathan, A.R. For the Respondent CORAM:
HONBLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER Date of Hearing: 17/01/2014 Date of Decision: 17/01/2014 The appellants are manufacturers of bulk drugs falling under CET, 29 in their Unit at Pydi Bhimavaram, Srikakulam Dist. They received some capital goods in March 2002 and September 2003, and availed CENVAT credit of Rs. 2,10,512/- which is not in dispute. In the month of June 2005, after about three years from the date of receipt of the capital goods, they removed the same used capital goods on payment of excise duty of Rs. 1,87,744/- based on the transaction value of the goods sold. The fact that the sale has taken place to an independent customer is not in dispute and the transaction value is not under challenge by the department.
2. The Dept initiated proceedings demanding Rs. 25,488/- on the difference between the Cenvat Credit taken (Rs. 2,10,512/-) and the Excise duty paid (Rs.1,85,024/-) ignoring Rs. 2720/- paid as Edu Cess. In the original adjudication, the SCN proceedings were dropped holding that the excise duty has correctly been paid in terms of Transaction Value. Aggrieved by the OIO, the Dept filed an appeal before the Commissioner (Appeals). However, the Commissioner (Appeals) has held that in view of the fact that the issue of reversal of CENVAT on used capital goods has been referred to Larger Bench, following the contradictory order passed by different Benches, the matter has not yet been finalized in the higher forum and accordingly he has confirmed the Duty demand of Rs. 25,488/- with interest in terms of Section 11 AB and Penalty of Rs. 10,000/- under Rule 25 of CENVAT Credit Rules 2002 was imposed.
3. Heard both sides for some time and I find that the very same issue had come up before the Honble High Court of Delhi in the case of Harsh International (Khaini) Pvt Ltd. Vs CCE [2012(281)741 (Del)] Honble High Court took a view that in the absence of any specific provision requiring the appellant to reverse the credit or pay tax on transaction value or after providing for depreciation, question of demand of duty does not arise. Therefore, according to the decision of the Honble High Court, the demand itself is not sustainable. However, in the appeal memorandum, the appellants are not challenging the demand for CENVAT credit made against them and entire amount has already been paid. The only challenge is to the penalty. In view of the decision of the Honble High Court taking a view that no tax was payable, the question of imposition of penalty does not arise. In the result, the appeal seeking waiver of penalty succeeds and the impugned order is set aside as far as penalty of Rs. 10,000/- is concerned.
(Order dictated and pronounced in open court) (B.S.V.MURTHY) Technical Member pnr