Custom, Excise & Service Tax Tribunal
Triveni Engineering & Industries ... vs Cce & St, Meerut on 10 July, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-SM
COURT IV
Excise Appeal No.E/55200/2014 EX. [SM]
[Arising out of Order-in-Appeal No.20-CE/APPL/MRT-I/2013 dated 25.02.2014 passed by the Commissioner (Appeals), C., C.E., Meerut-I]
For approval and signature:
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
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 authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
Triveni Engineering & Industries Limited Appellant
Vs.
CCE & ST, Meerut Respondent
Present for the Appellant : Shri R. Krishnan, Advocate Present for the Respondent: Shri G.R. Singh, D.R. Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) Date of Hearing/Decision: 10.07.2015 FINAL ORDER NO. __54236/2015___ PER: S.K. MOHANTY Brief facts of the case, leading to this appeal, are as follows:-
2. The appellant is engaged in the manufacture of sugar and molasses, falling under chapter 17 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant avails modvat credit of central excise duty paid, on the inputs and capital goods, received in the factory, for use in or in relation to the manufacture of the said final product. Modvat Credit taken during the period from October, 1999 to December, 1999 was denied by the Central Excise Department on various grounds. In appeal, this Tribunal vide Final Order No. 144/06-SM (Br.) dated 4th January, 2006 remanded the matter to the Original Authority for a fresh fact finding. However, with regard to modvat credit taken on welding electrodes, the Tribunal by the said order denied the credit holding that the appellant is not eligible for the same. The appellant has not contested the denial of credit on welding electrodes. Further, pursuant to the directions contained in the said order, the original authority took up denovo adjudication of the matter and passed the Order-in-Original dated 25.09.2013. In the said order, with regard to Annexure A, the duty demand has been reduced from Rs.37,646/- to 30,443/- and with regard to Annexure B, the demand has been reduced from Rs. 2,26,935/- to Rs.1,29,251/-. The reason assigned for disallowance of modvat benefit in the denovo adjudication order, in a nutshell, are that no declaration, as provided in erstwhile Rule 57 G/ 57 T of the Central Excise Rules, 1944 has been filed by the appellant-assessee before taking the modvat credit, and that some of the disputed goods are not covered under the definition of capital goods, for the purpose of taking modvat credit. The denovo adjudication order was confirmed in the impugned order dated 28.02.2014 passed by the Commissioner (Appeals), Central Excise Meerut-I. Hence, this present appeal before the Tribunal.
3. The ld. Advocate Shri R. Krishnan appearing for the appellant submits that the appellant is not disputing that the modvat credit was disallowed on welding electrodes. With regard to non-submission of declaration before the jurisdictional Central Excise Authorities, the submissions of the ld. Advocate are that non-filing of the declaration under erstwhile Rule 57-T is a mere procedural lapse, for which substantive right to take the modvat credit cannot be denied to the appellant. The ld. Advocate has referred to the Annexure A and Annexure B to the show cause notice dated 28.04.2000. In respect of Sl. Nos. 1 to 14 of Annexure- A and Sl. Nos. 6, 26, 27, 28, 29, 32 and 33 of Annexure-B, credit has been denied for non-submission of declaration. In support of the contention that no modvat credit can be denied for non-filing of declaration, the ld. Advocate relied on the following judgments/decisions rendered by the judicial forums:-
1. CCE, Delhi-III vs. A.B. Card Clothing (P) Ltd. reported in 2008 (222) ELT. 359 (P & H)
2. Systems India vs. CCE, Raipur reported in 2008 (224) ELT 252 (Tri. Del.)
3. SAIL vs. CCE, Ranchi reported in 2008 (222) ELT 233 (Tri. Kolkata)
4. IPF Vikram India Ltd. vs. CCE, Ludhiana reported in 2013 (295) ELT 421 (Tri. Del.)
5. Kamakhya Steels (P) Ltd. vs. CCE, Meerut reported in 2000 (121) ELT 247 (Tribunal- LB)
6. Satyabrat Swain vs. CCE, Meerut-I reported in 2015 (316) ELT 106 (Tri.-Del.)
7. Systems India vs. CCE, Raipur reported in CCE, Raipur reported in 2008 (224) ELT 252 (Tri. - Del.)
4. With regard to denial of cenvat credit in the original order, on the ground that the goods cannot be considered as capital goods as the same is not confirming to the definition, the submissions of the ld. Advocate is that no specific findings have been recorded in the denovo adjudication order, as to why the modvat benefit is not admisable to the appellant. The ld. Advocate has referred to the Sl. Nos.38, 1, 2, 9, 10,11, 14, 15, 16, 41 to 49, 7, 8, 12, 13, 40 in Annexure B to the show cause notice, wherein the Modvat credit has been denied without stating any reasons, despite the fact that a detailed submission was made before the Original Authority justifying that the capital goods are eligible for modvat credit.
5. Per contra, Shri G.R. Singh, the ld. DR appearing for the respondent, while reiterating the findings recorded in the impugned order, has relied on the decision of the Tribunal in the case of AKAY Power Line Products Pvt. Ltd. vs. Commissioner of Central Excise, Mumbai-III reported in 2001 (137) E.L.T. 781 (Tri.Mum.) and Asian Paints Ltd. vs. CCE, Vadodara reported in 1997 (93) ELT 198 (Tri.) to substantiate the stand of the Revenue that non-filing of declaration before taking the modvat credit, cannot be considered as procedural lapse and as such, the assessee will not be eligible to take the credit.
6. I have heard the ld. Counsels for both sides and perused the records.
7. With regard to the eligibility of modvat benefit on welding electrodes, the Tribunal in the earlier round of proceedings has decided negatively, against which the appellant has not preferred any appeal before the higher appellate authorities. Thus, I am not expressing any opinion on this aspect and the original authority is at liberty to recover the same, if not already paid by the appellant. With regard to non-filing of declaration by the appellant before taking modvat credit, I find that the receipt and utilization of the impunged goods have not been disputed by the authorities below. Thus, in such an event, non-filing will be construed as mere procedural lapse, for which the substantive right conferred under the statute cannot be whittled down and the benefit cannot be denied to the appellant. In this context, I find that in the above judgments/ decisions that modvat credit has been extended to the assessees under similar situations. Hence I am of the view that denial of modvat benefit on the ground of non-filing of declaration is not a justifiable ground and as such, the appellant is eligible for the cenvat credit in respect of the item under to Sl.No.1-14 (Annexure A) and Sl.Nos. 6, 26, 27, 28, 29, 32 and 33 (Annexure B), to the show cause notice.
8. With regard to denial of modvat benefit on the ground that the disputed goods are not covered under the definition of capital goods, I find that the authorities below have not recorded any specific reason in support of their contention. It is observed that the appellant has given ample justification in their reply to the show cause notice, as well as in the appeal memorandum filed before the First Appellate Authority, explaining the reasons for their eligibility to the modvat benefit. Therefore, I am of the view that the matter is required to be remanded back to the Original Authority for consideration of the submissions made before him, by the appellant with regard to the eligibility aspect of the disputed goods, and thereafter for passing a reasoned and speaking order. The Sl. Nos. listed in Annexure B to the show cause notice in this regard are 38, 1, 2, 9, 10,11, 14, 15, 16, 41 to 49 7, 8, 12, 13, 40.
9. In view of above, I am of the considered opinion that the appellant is eligible for the modvat benefit which was disallowed to it for non filing of declaration. With regard to the dispute about coverage of capital good under the definition, the impugned order is set aside and the matter is remanded to the Original Authority for passing a reasoned and speaking order, taking into consideration the submissions made/ to be made by the appellant. The penalty imposed under Rule 173 Q in the impugned order is set aside. The appeal is disposed of in above terms.
(Dictated and pronounced in the open Court) (S.K. MOHANTY) MEMBER (JUDICIAL) Anita 0 7