Custom, Excise & Service Tax Tribunal
M/S Grasim Industries Ltd vs C.C.E. & S.T. Indore on 5 January, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Misc Application No. E/55955/2014
Excise Stay No. E/52493/2014
Excise Appeal No. E/51999/2014 -Ex[DB]
[Arising out of Order-In-Original No. 15/COMMR/IND/CEX/2014 dated: 28.01.2014 passed by Commissioner of Central Excise & Service Tax, Indore]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
Hon'ble Mr. Rakesh Kumar, 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 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?
M/s Grasim Industries Ltd. Appellant
Vs.
C.C.E. & S.T. Indore Respondent
Appearance:
Sh. B.L. Narsimhan for the Appellants Shri Pramod Kr. Jain, DR for the Respondent CORAM:
Hon'ble Mr. Rakesh Kumar, Member (Technical) Hon'ble Mr. S.K. Mohanty, Member (Judicial) Date of Hearing/decision 05.01.2015 FINAL ORDER NO. 50130 /2015-Ex(Br) Per Rakesh Kumar (for the Bench):
The appellant in their manufacturing unit at Nagda (Madhya Pradesh) have two divisions, the Division-I is for manufacture of Viscose Staple fiber and DivisionII is for manufacture of Excel Fiber and non-woven fabrics. Initially the appellant had two separate central excise registration for these two divisions and as such these two divisions were maintaining separate account of the Cenvat Credit. In December, 2011, the appellant company applied for single registration and this request was allowed. On granting common registration for these two divisions, the appellant merged the separate Cenvat credit accounts of the two divisions. At that time there was some Cenvat credit balance available in the Excel Fibre Division which was used commonly for payment of duty on all the finished products including the Viscose staple fibre. The department was of the view that this is a case of transfer of Cenvat Credit from one registered unit to another registered and since it is governed by Rule 10 of the Cenvat Credit Rule 2004 and since this is not a case where the manufacturer had shifted his factory to another site or the factory has been transferred on account of change of ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture, the Cenvat credit in the account of Excel Fibre Division at the time of merger would lapse and the same could not be utilized for payment of duty. It is on this basis that after issued of the Show Cause Notice, the Commissioner vide order in Original dated 28.01.2014 confirmed the Cenvat credit demand of Rs. 14,11,14,058/- against the Appellant company along with interest and imposed penalty of equal amount on them under Rule 15(2) of Cenvat Credit Rule read with section 11AC of Central Excise Act, 1944 and also penalty of Rs. 50 Lakh under Rule 27 of the Central Excise Rule, 2002. Against this order of the Commissioner this appeal has been filed along with stay application.
2. Heard both the sides.
3. Though this matter is listed for hearing of only the stay application, on hearing the matter for some time, the bench was of the view that matter can be taken up for final disposal. Accordingly, the requirement of pre-deposit is waived and with the consent of both the sides, the matter is heard for final disposal.
4. Shri B.L. Narsimhan, Advocate, the Ld. Counsel for the appellant pleaded that the impugned order is an Ex-Parte order passed without hearing the appellant, that the issue involved in this case as to whether after granting of common registration, the Cenvat credit in the balance of one division could be used for payment of duty on the goods cleared from the other division, stands decided in favour of the appellant by Honble Madras High Court in the case of CCE Madurai vs Rajshree Sugars & Chemicals Ltd. reported in 2014 (299) ELT 277 (Mad.), that the ratio of this judgment is squarely applicable to the facts of this case and this judgment was not considered as the matter has been decided Ex-Parte, that in any case, the imposition of penalty of Rs. 50 Lakh on the appellant company under Rule 27 of the Central Excise Rule 2002, the maximum Penalty prescribed under which, is only Rs. 5000/- is absurd and that in view of this the impugned order is not correct.
5. Shri Pramod kumar, Ld. Jt. CDR, defended the impugned order by reiterating the findings of the Commissioner.
6. We have considered the submissions from both the sides and perused the records. There is no dispute that the impugned order is an Ex-parte order passed without hearing the appellant. Prima Facie, we also find that the judgment of Honble Madras High Court in the case of CCE Madurai vs Rajshree Sugars and Chemicals Ltd. reported in 2014 (299) ELT 277 (Mad), appears to be applicable to the facts of this case but this judgment has not been considered by the Commissioner and he decided the matter Ex-parte. In any case we do not find any justification as to how the penalty of Rs. 50 lakh can be imposed on the appellant company under Rule 27 of the Central Excise Rule 2002, the maximum penalty imposable under which is only 5000/-. The impugned order is, therefore, set aside and the matter is remanded to the Commissioner for denovo adjudication after hearing the appellant and also keeping in view the judgment of honble Madras high Court in the case of Rajshree Sugar and Chemicals Ltd.(Supra).
7. The appeal, stay application as well as miscellaneous application for early hearing of the stay application stands disposed of in above terms. The appellant are directed to report to the Commissioner for hearing within a months time (Dictated and pronounced in open court) (Rakesh Kumar) Member(Technical) (S.K. Mohanty) Member(Judicial) Neha Page | 3