Custom, Excise & Service Tax Tribunal
M/S. Texmaco Limited, vs C.C, Ex - Kol Iii on 9 August, 2023
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
KOLKATA
REGIONAL BENCH - COURT NO.1
Excise Appeal No.991 of 2011
(On behalf of Appellant)
(Arising out of Order-in-Original No.18/Commr./CE/Kol.III/2010-11 dated 07.09.2011
passed by Commissioner of Central Excise, Kolkata III)
M/s Texmaco Limited
Belgharia Works, P.O. Belgharia, Kolkata-700056
Appellant
VERSUS
Commissioner of Central Excise, Kolkata III
180, Shantipally, Rajdanga Main Road, Kolkata-700107
Respondent
APPERANCE :
Shri Pulak Saha, Chartered Accountant for the Appellant Shri P.K.Ghosh, Authorised Representative for the Respondent CORAM:
HON'BLE MR.ASHOK JINDAL, MEMBER (JUDICIAL) HON'BLE MR.K.ANPAZHAKAN, MEMBER (TECHNICAL) FINAL ORDER NO......76406/2023 DATE OF HEARING : 09 .08.2023 DATE OF DECISION : 09 .08.2023 Per Ashok Jindal :
The appellant is in appeal against the impugned order demanding differential duty along with interest and imposing penalty on the appellant.
2. The facts of the case are that the appellant is engaged in the manufacture of excisable goods as well as exempted goods and availed cenvat credit on common inputs and not maintained the separate account of input/input services used in the manufacture of dutiable as well as exempted goods during the period from October, 2003 to November, 2005. But the appellant was paying 8%/10% of the price of the exempted goods at the time of clearance from their factory. 2 Excise Appeal No.991 of 2011 However, the said 8%/10% of the amount paid by the appellant at the time of clearance of the goods was recovered from the customer as per their contract.
3. The Revenue is of the view that the recovery of 8%/10% of the price from the customer is to be included in the assessable value of the exempted goods cleared by the appellant.
4. In view of this, the proceedings were initiated against the appellant by issuance of show-cause notice.
5. The matter was adjudicated. The demand of differential duty was confirmed against the appellant along with interest and penalty was also imposed.
6. Against the said order, the appellant is before us.
7. The ld.Counsel for the appellant, submits that the issue is squarely covered by the decision of this Tribunal in the case of M/s Bharat Heavy Electrical Limited Vs. Commissioner o Central Excise & Service Tax, Bhopal reported in 2015 (10) TMI 1680-CESTAT New Delhi, wherein a difference of opinion arose and the Third Member agreed with the decision taken by the Member (Judicial), wherein it has been observed as under :
"28. In this case appellant is availing Cenvat credit on the inputs and manufacturing dutiable as well as the final product. The value of the goods works out to equal in both the cases i.e. dutiable/exempted goods. 5%/10% is payable as per Rule 6(3) of the value of the said goods which the appellant has already paid. Therefore, the analogy drawn by the Revenue is totally misconceived that the appellant is required to pay 5%/10% of the sale price of goods as per Rule 6(3) of the Cenvat Credit Rules, 3 Excise Appeal No.991 of 2011 2004. Further, case laws relied upon by the ld. AR are not applicable to the facts of this case as in the case of Muktanandan Pipes Ltd. v. CCE, Ahmedabad - 2014 (312) 735 (Tri.-Ahmd.) the appellant sought deduction of 8% from the value of the goods which is not permissible. Same facts were in the case of Mukand Ltd. v. CCE, Belapur - 2010 (252) E.L.T. 75 (Tri.-Mum.) and in the case of Mahindra & Mahindra Ltd. v. CCE, Mumbai - 2007 (211) E.L.T. 481 (Tri.-Mumbai). Therefore, the said case laws are not relevant to the facts of this case.
29. In this case, the appellant is paying 5%/10% of the value of the goods to the Revenue as per Rule 5(3) and not claiming any deduction of 5%/10% on the said amount. Therefore, appellant is not required to pay 5%/10% to the Revenue on the amount recovered from the buyer on account of amount paid to the Revenue as per Rule 6(3) of the Cenvat Credit Rules, 2004. In these circumstances, I take support of the decisions in the case of Unison Metals v. C.C.E - 2006 (204) E.L.T. 323 (T-LB) and in the case of CCE v. Kisan Sahkari Chini Mills Ltd. - 2001 (132) E.L.T. 523 (S.C.) to hold that the recovery of 5%/10% amount from the customer which already stand paid to the Department cannot be held to be liable to be added in the assessable value of the goods."
8. As the issue is squarely covered by the decision of this Tribunal in the case of M/s Bharat Heavy Electrical Limited (supra), wherein it has been held that the appellant is not required to include 8%/10% of the value of the exempted goods recovered from the buyers in the assessable value.
4Excise Appeal No.991 of 2011
9. Therefore, we hold that the demand against the appellant is not sustainable. Accordingly, the impugned demand is set aside by allowing the appeal.
(Operative part of the order was pronounced in the open court) Sd/-
(Ashok Jindal) Member (Judicial) Sd/-
(K.Anpazhakan)
mm Member (Technical)