Custom, Excise & Service Tax Tribunal
M/S. Jayaswals Neco Ltd vs Commissioner Of Central Excise, Nagpur on 2 June, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1181/07 [Arising out of Order-in- Appeal No. SVS/189/NGP-II/2007 dtd. 21/5/2007passed by the Commissioner of Central Excise & Customs(Appeals), Nagpur] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
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 :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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M/s. Jayaswals Neco Ltd.
:
Appellants
VS
Commissioner of Central Excise, Nagpur
:
Respondent
Appearance
Shri. P. V. Sadavarte, Advocate for the Appellants
Shri. H.M. Dixit, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 2/6/2015
Date of decision: 2/6/2015
ORDER NO.
Per : Ramesh Nair
This appeal is directed against Order-in- Appeal No. SVS/189/NGP-II/2007 dtd. 21/5/2007 of the Commissioner of Central Excise & Customs(Appeals), Nagpur, who has passed following order:-
(1) The demand in respect of fitments related to goods exported from premises of M/s. NSSL is upheld.
(2) The demand to be decided afresh with respect to the fitments related to the goods exported from the premises of the appellant.
(3) The penalty aspect to be decided afresh depending upon the total liability of the appellant.
(4) For the purpose of 2& 3 above the case is remanded to the original authority.
(5) The order-in-original stand modified to the above extent.
2. The fact of the case is that appellant has imported fitment and availed Cenvat credit in respect of CVD paid thereon. The said fitment was sent to their one of the group company M/s. Neco Schubert and Salzer Ltd.(M/s. NSSL) under cover of challan issued under Rule 4(5)(a) under job work for fitting into cylinder heads being supplied by M/s. NSSL. After use of fitment by job worker M/s. NSSL finished goods i.e. cylinder head duly fitted with said fitment cleared from the premises of M/s. NSSL for export on behalf of the appellant. The department by show cause notice dated 3/3/2005 proposed denial of Cenvat Credit amounting to Rs. 15,72,876/- on the ground that appellant is not manufacturer in the transaction of the present case therefore they are not entitled for the credit in respect of fitment used by M/s. NSSL. It was contended that M/s. NSSL is actual manufacturer and therefore appellant is not entitle for the Cenvat Credit. The show cause notice issued and culminated in to adjudication order wherein adjudicating authority disallowed Cenvat Credit of Rs. 15,74,876/- and imposed equal amount of penalty and demanded interest under Section 11AB. Aggrieved by the said order appellant filed appeal before the Commissioner(Appeals), who modified order wherein issue related to the export of cylinder duly fitted with fitment cleared from factory of the appellant were remanded and issue related to the export clearance from the factory of M/s. NSSL Cenvat credit was denied. Being partly aggrieved by the impugned order appellant filed this appeal.
3. Shri. Sadavarthe, Ld. Counsel for the appellant submits that appellant has availed Cenvat Credit in respect of imported fitment which has been sent to M/s. NSSL under Rule 4(5)(a) under cover of challan for fitting of the same in the cylinder head on their behalf. The cylinder head duly fitted with said fitment cleared for export from the premises of job worker i.e. M/s. NSSL on behalf of the appellant only therefore the input i.e. fitment on which Cenvat credit was availed and was used on their behalf by job worker in the final product therefore in terms of Rule 4(5)(a) the Cenvat Credit is admissible on said fitment to the appellant. Ld Counsel also submitted all the relevant challans and ARE -1 and record of goods sent for job work. He also placed reliance on the following case laws:
(a) S.G. Zaveri Pharmapack Vs. CC. Ex. Mum-V[2007(217) E.L.T. 591(Tri- Mumbai)]
(b) Amul Industries P. Ltd. Vs. CCE, Rajkot [2006(206) ELT 1043(Tri. Mum)]
(c) Bata India Ltd. Vs. CCE, Bang-II[2006(199)ELT 847(Tri. Bang.)]
(d) Vikram Cement Vs. C.C. Ex. Indore[2006 (194) ELT (S.C.)]
(e) Kay Cee Electrical Vs. C.C. Ex, New Delhi[2005(182) ELT 136 (Tri Del)]
(f) Mathabros Engineers Pvt. Ltd. Vs. C.C. Ex. Mum[2005(185) ELT 214(Tri. Mum)]
(g) C. C. Ex., Chandigarh Vs. Alpha Drugs (India) Ltd. 2002(140) ELT 43 (P&H)]
(h) C.C. Ex., Chennai Vs. Indian Organic Chemicals ltd. [2001(138) ELT 209(Tri. Chenn)]
(i) Larsen & Toubro Ltd. Vs. CCE, Mumbai [2003(160) ELT 893(Tri. Mum)]
(j) Glass and Ceramic Decorators Vs. CCE, Mumbai 2014(305) ELT 133(Tri. Mum)]
4. On the other hand, Shri. H.M. Dixit, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. I have carefully considered the submissions made by both the sides and perused records submitted by the Ld. Counsel.
6. On perusal of the record I find that it is not under dispute that appellant has availed the Cenvat Credit in respect of imported fitment which has been cleared under Rule 4(5)(a) on job work challan to M/s. NSSL and M/s. NSSL has carried out process of fitting of fitment in the cylinder head and the said final products have been exported. Ld. Lower authorities have denied the Cenvat Credit on the ground that appellant is not manufacturer of the goods exported. It is observed that even though partly goods were manufactured by the job worker but part of the process i.e. fitting of fitment supplied by the appellant was carried out by the job worker on behalf of the appellant and thereafter the final product has been completed, the said final product since then exported on behalf of the appellant only therefore even though part manufacturing carried out by job worker on their own since entire final product is complete on behalf of the appellant and said final product has been exported on behalf of the appellant they are legally entitled for Cenvat Credit in respect of fitment. From the records, it is observed that the supply of fitment by the appellant under Rule 4(5)(a), use of said fitment for export goods and the export of the final product though from the premises of the job worker ie M/s. NSSL is not under dispute, on the basis of invoices, ARE 1 and other export documents, the Cenvat Credit in respect of fitment used in the export goods cannot be denied. I have gone through the judgments cited by the Ld. Counsel, ratio of these judgments are more or less applicable in the facts of the present case, however I do not discuss each and every judgments. It is also observed that Ld. Commissioner (Appeals) himself in the impugned order made distinction that in respect of some items, under the same nature of transaction in respect of goods exported from the premises of the appellant was remanded to the original authority and the matter related to the goods exported through premises of the job worker, Cenvat Credit was denied. This shows that Ld. Commissioner(Appeals) merely on the basis that goods have been cleared for export from the premises of the job worker concluded that credit is not admissible but given different treatment to goods cleared from the premises of the appellant. In my view premises from where the goods have been exported is not much of relevance, it is export irrespective of locations, either from the appellants premises or from the job workers premises(M/s. NSSL) the Cenvat Credit should be allowed on input used in the export goods. In view of my above discussion, I am of the considered view that appellant is entitled for the Cenvat Credit in respect of fitment used in the final product by the job worker M/s. NSSL and cleared final product from the premises of job worker for export on behalf of the appellant. I therefore modify the impugned order and allow the appeal.
(Operative part pronounced in court) Ramesh Nair Member (Judicial) sk 2