Custom, Excise & Service Tax Tribunal
Saint Gobain Glass India Ltd vs Commissioner Of Central Excise & St on 8 September, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/41863/2015
[Arising out of Order-in-Appeal No.41/2015 dt. 1.6.2015 passed by the Commissioner (Appeals-I) Central Excise & Service Tax, LTU, Chennai]
Saint Gobain Glass India Ltd.
Appellant
Versus
Commissioner of Central Excise & ST
LTU, Chennai Respondent
Appearance:
Ms. V. Ubaya Bharathi, Advocate Ms. Minchu Mariam Punnoose, Advocate For the Appellant Shri B. Balamurugan, AC (AR) For the Respondent CORAM:
Honble Shri P.K.Choudhary, Judicial Member Date of hearing : 06.09.2016 Date of Pronouncement :08.09.2016 FINAL ORDER No.41528/2016 M/s. Saint Gobain India Pvt. Ltd (earlier M/s. Sezal Glass Ltd., the appellants herein, are manufacturers of excisable goods falling under chapter 70 of the schedule to the Central Excise Tariff Act, 1985 and centralized Service Tax Registration No. AABCS4338MT001. The appellant has taken over the business of M/s. SEZAL Glass Ltd. functioning at the above address including their assets and liabilities. They are availing Cenvat Credit of duty paid /payable on inputs / Capital goods as well as Service Tax paid on input services under the Cenvat Credit Rules, 2004.
Proceedings were initiated vide Show Cause Notice No. LTUC/65/2013-ADC dt. 29.03.2013, after an audit was conducted by the internal audit group, stating that the appellant had wilfully suppressed and wrongly availed CENVAT credit on items viz. Bars, Angle, Channels, MS Plates & Coils, as Capital goods. In reply vide letter dt. 13.05.2013, that the details submitted vide letter Dated: 16.05.2011, it was submitted that they had a bonafide belief of the eligibility to credit and that the extended period could not invoke the ground of suppression and intention to evade duty. It was further submitted that the appellant have declared in their returns all particulars and there was no room to impute the guilt of suppression of facts and cited judgments also on these grounds. The Additional Commissioner passed the OIO No.LTUC/377/2013-AC dt.23/10/2013 who had confirmed the demand as proposed in the SCN dt. 29/03/2013 and ordered the recovery of the same under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to section 11A (1) of the Central Excise Act, 1994 besides confirming the interest and penalty. A further appeal to the Commissioner (Appeals) did not yield any favour and hence the present appeal. The appeal was argued on merits and on non invocation of extended period.
2. The appellant was represented by Ms.V. Ubahaya Bharathi and Ms. Minchu Mariam Punnoose, Advocates and the Revenue was represented by Shri B. Balamurugan, AC (A.R)
3. The issue in the present case is as to whether Cenvat Credit can be availed on the amount of excise duty paid in purchase of steel bars, angles, MS Plates and Coils which have been used in fabrication of capital goods such as machinery, Anneal Lehr & cutting line etc. The period of dispute is from April 2009 to December 2009. The issue for the period prior to 07.07.2009 is in appellants favour in as much as the Gujarat High Court in the case of M/s. Mundra Ports & Special Economic Zone Ltd. Vs. C.C.E. & Cus reported in 2015 (39) S.T.R. 729 (Guj.) has in para 8 of the judgement observed as follows :
8.?Mr. Y.N. Ravani, learned counsel for the Revenue has placed reliance on the decision of the Larger Bench of the Tribunal in Vandana Global Limited v. Commissioner of Central Excise, Raipur, 2010 (253) E.L.T. 440. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 7-7-2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the Legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited v. Union of India and Others, reported in (2011) 11 SCC 408 = 2011 (266) E.L.T. 145 (S.C.) would not be applicable to the facts of the instant case. The jurisdictional High Court in the case of M/s. Thiru Arooran Sugars Vs CCE Trichy reported in 2015 TIOL- 1734-HC MAD-CX., has also granted the benefit of Cenvat Credit for MS angels Channels, plates etc. For the period from 07.07.2009 to December 2009, it was contended by the appellants that the disputed items are eligible for credit which was opposed by the AR. The learned AR had stated that while erection of machinery is eligible for credit, the supporting structures are ineligible for credit; that the matter should be remanded for verification and re-quantification.
4. The advocates for the appellants submitted that the demand for the denial of cenvat credit was by invoking the extended period and in the facts of the present case the appellants have declared in their returns all the particulars and there was no room to impute the guilt of suppression of facts on them. The issue was purely interpretative in nature and therefore the invocation of extended period is unsustainable. Under normal circumstances, it would have been proper to remand the matter to the lower authorities for a verification and re-quantification but in the instant case the period of dispute is from April 2009 to December 2009 and the SCN was issued on 29.03.2013 and during this period there were judgements for and against the eligibility of cenvat credit and no doubt, the Larger Bench in the Case of M/s. Vandana Global Vs Commissioner reported in 2010 (253) E.L.T. 440 (Tri LB) had denied the credit but this view has been negatived by the Gujarat High Court and by the Madras High Court. It has been the consistent view of the Supreme Court that if there has been conflicting views, the invocation of extended period fails, in the case of M/s. Jaiprakash Industries Ltd Vs. Commissioner of C.Ex.., Chandigarh reported in 2002(146) E.L.T 481 (SC) has in Para 6 & 8 of the judgement observed as follows :
6.We will first? take up the second question. The law on this point is well-settled. In the case of Padmini Products v. Collector of Central Excise reported in 1989 (43) E.L.T. 195 (S.C.), this Court has held that wherever there is the scope for believing that the goods are not excisable to duty and, therefore, no licence is required to be taken out, then the extended period of limitation for demand under Section 11A is inapplicable. This Court has held that mere failure or negligence on the part of the manufacturer in not taking out a licence and in not paying duty does not attract the extended period of limitation. This Court has held that there must be evidence to show that the manufacturer knew that the goods were liable to duty and that he was required to take out a licence. This Court has held that for invoking the extended period of limitation duty should not have been paid, short levied or short paid or erroneously refunded because of either fraud, collusion, wilful mis-statement, suppression of fact or contravention of any provision or rules. This Court has held that these ingredients postulate a positive act and, therefore, mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or wilful mis-statement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation.
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8. In this case,? there was a divergent view of the various High Courts whether crushing of bigger stones or boulders into smaller pieces amounts to manufacture. In view of the divergent views, of the various High Courts, there was a bona fide doubt as to whether or not such an activity amounted to manufacture. This being the position, it cannot be said that merely because the Appellants did not take out a licence and did not pay the duty the provisions of Section 11A got attracted. There is no evidence or proof that the licence was not taken out and/or duty not paid on account of any fraud, collusion, wilful mis-statement or suppression of fact. We, therefore, set aside the demand under the show cause notice dated 3rd May, 1993. In the order in Original and in the appellate order, it had been noted that the facts came to light only upon the visit of the internal audit party to their factory. This very fact would go to show that the records were maintained and there has been no suppression of facts coupled with an intention to evade payment of duty and therefore the invocation of longer period fails. In view of the above the appeal is allowed on merits upto 07.07.2009 and fully on limitation. Appeal is allowed in the above terms.
(Order pronounced in open court on 08.09.2016) (P.K.CHOUDHARY) JUDICIAL MEMBER gs 5