Custom, Excise & Service Tax Tribunal
M/S. Hindustan Coca Cola Beverages Pvt. ... vs Cce, Meerut-Ii on 5 May, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 2031 OF 2007-SM [Arising out of Order-in-Appeal No. 09/COMM./M-ii/2007 dated 31.03.2007 passed by the Commissioner, Customs & Central Excise, Meerut] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters 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 Departmental authorities? M/s. Hindustan Coca Cola Beverages Pvt. Ltd., Appellants Vs. CCE, Meerut-II Respondent
Appearance:
Ms. Khirin Khajuria, Advocate for the appellants; Shri Sansar Chand, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 5th May, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
The appellants filed this appeal against imposition of penalty of Rs. 1 lakh under Rule 15(1) and 15(3) of Cenvat Credit Rules, 2004.
2. After hearing both sides and on perusal of the records, it is seen that the show cause notice was issued proposing to demand an amount of Rs. 1,60,11,655.00 being the amount payable at the rate of 10% on the value of clearances of exempted product. The Commissioner dropped the demand and appropriated the amount of Rs. 1,74,434/- which they reversed in respect of credit on inputs used in exempted goods. He imposed penalty of Rs. 1 lakh.
3. Learned Advocate on behalf of the appellants submits amount of Rs. 18,100/- they have reversed on 26.12.2005 in respect of input service which is 1.73 per cent of the entire Cenvat credit attributable to the exempted product. She also submits that the amount of Rs. 1,56, 635/- was reversed on 21.10.2005. She submits that vide notification No. 27/2005-CE(NT) effective from 16.5.2005 they are required to maintain separate books of account in respect of fuel used in the manufacture of exempted products. She also submits that due to change of law there was delay in reversal of credit. She relied on the decision of the Tribunal in the case of Hindustan Coca Cola Beverages Pvt. Ltd. vs. CCE, Thane-I, reported in 2005 (190) ELT 287 (Tri. Mumbai).
4. Learned D.R. reiterates the findings of the Commissioner. He submits that the appellants contravened Rule 6 of Cenvat Credit Rules and, therefore, imposition of penalty is justified. He also submits that the case law relied upon by the learned Advocate is not applicable herein as in this case they have not reversed on their own.
5. After hearing both sides and on perusal of the records, it is seen that the Commissioner dropped the demand of Rs. 1,60,11,655/- and appropriated the amount of Rs. 1,74,435/- as deposited by the appellants before issue of show cause notice in respect of fuel used in exempted products. It is revealed from the impugned order that the credit of Rs. 18,100/- was reversed by them on 26.12.2005 and the amount is very meager against the entire Cenvat credit attributed to the exempted products. It is also noticed that due to change of law in respect of maintenance of records of Fuel used by them in the manufacture of final product, there is delay in reversal of credit. The Tribunal in the appellants own case as reported in 2005 (190) ELT 287 held that when credit availed by the company reversed by them on their own before utilization, imposition of penalty on account of wrong availment of credit was unjustified. On a query from the Bench the learned Advocate submits that they had sufficient balance in the Cenvat account at the relevant time and they have not utilized this amount at any point of time.
6. In the present case, the appellants reversed credit before issue of show cause notice which was appropriated by the Commissioner and the demand was dropped. In view of that, I find that imposition of penalty is not warranted. Accordingly, imposition of penalty is set aside. Appeal is allowed with consequential relief.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK