Custom, Excise & Service Tax Tribunal
Empire Industries Ltd vs Commissioner Of Central Excise, ... on 2 February, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/288/2011 (Arising out of Order-in-Appeal No. PKA/425/BEL/2010 dt.26.11.2010 passed by the Commissioner of Central Excise (Appeals) Mumbai-III ) For approval and signature: Honble Shri 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 : No
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?
======================================================
Empire Industries Ltd.
:
Appellant
VS
Commissioner of Central Excise, Mumbai-III
:
Respondent
Appearance
Shri Prasad Paranjape, Advocate for Appellant
Shri V.K. Shastri, Asstt. Commr. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 02/02/2016
Date of decision: 02/02/2016
ORDER NO.
The appeal is directed against Order-in-Appeal No. PKS/425/BEL/2010 dt. 25.11.2010 passed by Commissioner of Central Excise (Appeals) wherein Learned Commissioner upheld the Order-in-Original and rejected the appeal filed by the appellant.
2. The fact of the case is that the appellant had taken Cenvat credit on the goods imported under Duty Free Import Authorization (DFIA) Scheme. The show cause notice was issued for proposing denial of Cenvat credit on the ground that para (v) of the Notification No. 40/2006-Customs dt. 1.5.2006 described that for exports under DFIA, the facility of Cenvat Credit under Cenvat Credit Rules, 2004 in respect of materials imported/procured against the said authorization cannot be availed. In the adjudication, the credit was disallowed referring to para (iiia) of Notification No.40/2006 dt.1.5.2006. Aggrieved by the adjudication order, the appellant filed appeal before the Commissioner (Appeals), who maintained the Order-in-Original and rejected the appeal, therefore the appellant is before me.
3. Shri Prasad Paranjape, Learned Counsel for the appellant submits that the show cause notice proposed to deny the credit on the basis of para (v) of the Notification No.40/2006 dt. 1.5.2006 whereas the adjudication order as well as in the impugned order the credit was disallowed referring to para (iiia) of the said notification. The entire proceedings before the adjudicating authority as well as the first appellate authority stand vitiated for the reason that the adjudication order travelled beyond the scope of show cause notice. As regard the allegation in the show cause notice with reference to para (v) of the notification. He submits that vide Section 92 of the Finance Act, 2009 are retrospective amendment Notification No. 40/2006 was made and the amendment has been validated for the period 1st May 2006 to 18th February 2009. The condition provided under para (v) of the notification was substituted and accordingly the appellant was entitled for the Cenvat Credit. He also submits that the necessary amendment to this effect was also made in para 4.4.7 of the Foreign Trade Policy. Accordingly the appellant was entitled for the Cenvat credit in respect of SAD paid on the import of goods under DFIA.
4. On the other hand, Shri V. K. Shashtri Learned Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. On careful consideration of the submissions made by both the sides and perusal of the record, I find that in the show cause notice the credit was proposed to be denied for violation of condition provided in para (v) of Notification No. 40/2006-Cus. whereas the adjudication order and Commissioner (Appeals) order decided the matter referring to para (iiia) of the Notification. It is not permitted in law to adjudicate the matter in the show cause notice on the ground, which is not flowing from the show cause notice. Hence, it is not permitted that the adjudication order or the appellate order is traveled beyond the scope of show cause notice. I therefore do not agree with the lower authority in as much as the entire finding is based on para (iiia) of the Notification No. 40/2006. As regard the issue relates para (v) of the Notification No. 40/2006-Cus. The retrospective amendment was made as under:
92. (1) The notification of the Government of India in the Ministry of Finance (Department of Revenue) number G.S.R.260(E), dated the 1st May 2006,, issued under sub-section (1) of section 25 of the Customs Act shall stand amended and shall be deemed to have been amended in the manner as specified in column (3) of the Second Schedule, on and from the corresponding date mentioned in column (4) of the Schedule Retrospectively, and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, any action taken or anything done or purported to have been taken or done under the said notification, shall be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if the notification as amended by this sub-section had been in force at all material times.
(2) For the purposes of sub-section (1), the Central Government shall have and shall be deemed to have the power to amend the notification referred to in the said sub-section with retrospective effect as if the Central Government had the power to amend the said notification under sub-section (1) of section 25 of the Customs Act retrospectively, at all material times.
(3) Recovery shall be made of the amount which has not been paid but which would have been paid as if the amendment made by sub-section (1) had been in force at all material times from the day of which the Finance (No.2) Bill, 2009 receives the assent of the President Explanation.For removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would no have been so punishable if this section had not come into force.
THE SECOND SCHEDULE (See section 92) Sr. No. Notification Number and date Amendment Date of effect of amendment (1) (2) (3) (4) G.S.R. 260(E), dated the 1st May, 2006, 40/2006-Customs dated the 1st May, 2006 In the said notification, in the opening paragraphs-
(i).
(ii).
40(iii) for condition (v), the following condition shall be substituted, namely: (v) that the export obligation as specified in the said authorisation (both in value and quantity terms) is discharged within the period specified in the said authorisation or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorisation:
Provided that an Advance Intermediate authorisation holder shall discharge export obligation by supplying the resultant products to the exporter in terms of paragraph 4.1.3 (ii) of the Foreign Trade Policy. 1st May, 2006 to 18th February, 2009.
From the aforesaid retrospective amendment in para (v) of Notification No. 40/2006-Cus. which has been validated for the period from 1st May 2006 to 18th February 2009, the appellant are entitled for the Cenvat Credit.
6. In view of the above retrospective amendment, the appellants availment of Cenvat credit in respect of SAD paid on the import made under DFIA becomes legal and correct. I, therefore set aside the impugned order and allow the appeal of the appellant.
(Pronounced in court) (Ramesh Nair) Member (Judicial) SM.
6Appeal No. E/288/2011