Custom, Excise & Service Tax Tribunal
M/S.Philips Carbon Black Ltd vs Cce, Bolpur on 31 December, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.Ex.Ap.605/09
(Arising out of Order-in-Appeal No.75/Commr/BOL/09 dated 27.08.2009 passed by the Commissioner of Central Excise, Bolpur.)
FOR APPROVAL AND SIGNATURE
HONBLE S.K. GAULE, MEMBER(TECHNICAL)
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 should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Philips Carbon Black Ltd.
Applicant (s)/Appellant (s)
Vs.
CCE, Bolpur
Respondent (s)
Appearance:
Shri B.N. Chattopadhyay, Consultant for the Appellant (s) Shri J.A. Khan, Authorized Representative (SDR) for the Revenue (s) CORAM:
Honble Shri S.K. Gaule, Member(Technical) Date of Hearing/Decision :- 31.12.2009 Date of Pronouncement :-
ORDER NO.
Per Shri S.K. Gaule.
1. Heard both sides.
2. Appellants have challenged the Commissioners Order for recovery of interest and imposition of penalty for CENVAT Credit wrongly taken.
3. The Appellants are engaged in the manufacture of carbon black falling under sub-heading 28030010 of the first Schedule to CETA 85. They availed the facility of CENVAT credit. Their had office had distributed Service Tax credit to its Durgapur plant amounting to Rs.54,84,143/- and education cess of Rs.1,09,683/- and secondary and higher education cess of Rs.54,546/- vide two invoices during the period October 2007 and December 2007.
3.1 Subsequently the appellants realized that the said invoices were meant for another unit of the Appellants. Invoice inadvertently distributed to Durgapur Plant. They reversed the CENVAT Credit and disclosed it in ER-1 return filed in the month of August, 2008. A show cause notice was issued for demanding the CENVAT Credit amount of Rs.54,84,143/- and education cess of Rs.1,09,683/- and secondary and higher education cess of Rs.54,546/-, interest and for imposition of penalty on 04.09.2008. Commissioner confirmed the demand of duty and interest at the appropriate rate and also imposed penalty under Rule 15(3) of CENVAT Rule, 2004.
4. The Appellants have contended that they have taken the credit, but not utilized the same. The Appellants have also contended that they have reversed the irregular credit on 09.07.2008 and 26.07.2008 and they have received the show cause notice on 04.09.2008, which is also clear from para 3.9 of the order-in-original. They also contended that they have only taken the credit and not utilized the same. Therefore interest is not liable to be recovered from them and penalty is also not liable to be imposed. They relied upon the decision of Honble Punjab & Haryana High Court in the case of Commissioner vs. Maruti Udyog reported in 2007 (214) ELT 173 (P & H) which was also upheld by the Honble Supreme Court by dismissing the Special Leave Petition field by the Commissioner. They also placed reliance on Honble High Court of Gujarats decision in the case of COMMR. OF CEN.EX. VS. GUPTA STEEL. 2006 (205) ELT 24,(Guj) wherein it was held that interest is not to be levied on amount of credit directed to be reversed when such credit not availed by assesse but lying unutilized. They also placed reliance on Tribunal decision in the case of Commr. Of Cen. Ex. Kol.-IV 2007(215) ELT 119 (Tri.-Kolkata) wherein similar view was taken.
5. The Department contended that as per Rule 14 interest is payable for irregular CENVAT Credit taken or utilized and the decision of Honble Punjab & Haryana High Court (supra) relates to period of 1996-97 and the present case relates to 2007-2008 and it does not support the contention of Appellant.
6. I have carefully considered the submission and perused the records. Honble Punjab & Haryana High Court in the case of Commissioner vs. Maruti Udyog reported held that assesse is not liable to pay interest on the credit taken but not utilized .This decision was maintained by the Honble Supreme Court. The decision of Honble Punjab & Haryana High Court has been followed by various fora in catena of cases even with reference to Rule 12 and Rule 13/ Rule 14 and 15 of Cenvat Credit Rule2002 /2004.
6.1 As regards the contention of the department that Honble Panjab and Haryana courts decision (supra) doesnot relate to Rule 14, I find that Rule 12 of Cenvat Credit Rules 2002 and rule 14 of CENVAT credit rules 2004 both provide for recovery of CENVAT credit taken or utilized wrongly. Clause (2)(b) of clause 144 of Finance Bill of 2003 in respect of Cenvat Credit Rules 2002 provided that recovery shall be made of all the CENVAT credit, which have been taken and utilized but which would not have been allowed to be taken and utilized, if the amendment made by sub-section (1) had been in force at all material times, within a period of thirty days from the day on which the Finance Bill, 2003 receives the assent of the President and in the event of non-payment of such CENVAT credit within this period, in addition to the amount of such CENVAT credit recoverable, interest at the rate of fifteen per cent, per annum shall be payable from the date immediately after the expiry of the said period of thirty days till the date of payment which goes to show that the intention is to charge interest on taken and utilized. I also find that the Appellant have throughout maintained they have only taken the credit and not utilized the same. However the Ld. Commissioner in his findings referred to the impugned credit as taken/utilized. He has not given clear cut finding in the impugned order whether the credit was only taken or utilized also. Now the appellant have also contented that their credit balance has throughout been more than the amount of credit involved in the case. Therefore the matter requires reconsideration. In these circumstances the impugned order is set and aside and the matter is remanded to the Commissioner to decide afresh, keeping in view the above aspects, after affording an opportunity of hearing to the appellant.
The appeal is thus allowed by way of remand.
(Pronounced in the open court on 05.02.2010.)
(S.K. GAULE) MEMBER(TECHNICAL)
sm
?
5
Appeal No.Ex.Ap.605/09