Custom, Excise & Service Tax Tribunal
M/S. Suraj Vanaspati Ltd vs C.C.E. Noida on 25 February, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. II Appeal No. E/463/2007-EX(SM) [Arising out of Order-in-Appeal No. 145-CE/Noida/2006 dated 29.11.2006 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Noida]. For approval and signature: Honble Shri Ashok Jindal, 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? M/s. Suraj Vanaspati Ltd. .Appellants Vs. C.C.E. Noida .Respondent
Appearance:
Shri H. Bajaj, Advocate for the Appellants Ms. Ranjana Jha, DR for the Respondent CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial) Date of Hearing: 25.02.2015 FINAL ORDER NO. 50560/2015-EX(SM) Per Ashok Jindal:
The appellant is in appeal against the impugned order confirming the demand of Rs. 23,51,326/- along with interest and penalty of Rs.38,86,099/-.
2. The facts of the case are that during the relevant time the appellant was manufacturer of Vanaspati Oil and availing Cenvat Credit on inputs paying duty on their clearance. On 22.07.1996 the Vanaspati Oil was declared as exempted goods. Therefore, the appellant was not required to pay duty on the clearance of Vanaspati Oil from 23.07.1996. At the same time, there was Cenvat Credit lying in their Cenvat Credit account unutilized. On 01.03.2003 duty on Vanaspati Oil was re-introduced and appellant availed the Cenvat Credit lying unutilized as on 22.07.1996 for payment of duty in the month of May 2004 to the tune of Rs.38,86,999/-. Same was intimated to the department in June 2004. In October 2004, the appellant realized that they have taken Cenvat Credit of Rs.15,34,773/- without having relevant documents in their custody, they suo moto reversed the credit. Thereafter, in June 2005, a show cause notice was issued to the appellant to deny the utilization of Cenvat Credit lying unutilized in their Cenvat Credit account as on 23.07.1996 for the clearance of May 2004. In these set of facts, the Show Cause Notice was issued. Same was adjudicated demanding duty of Rs.38,86,999/- along with interest and equivalent amount of penalty. The amount of Rs.15,34,773/- which was reversed by the appellant in the month of October 2004 was appropriated on appeal before the ld. Commissioner (A) order of adjudication was confirmed. Therefore, appellant is before me.
3. The Ld. Counsel for the appellant submits that in this case it is admitted fact that the Cenvat Credit was lying unutilized on 22.07.1996 and same has been utilized by the appellant for payment of duty on Vanaspati Oil same product in May 2004. Therefore, as held by the Honble High Court of Calcutta in the case of Rasoi Ltd. Vs. UOI-2004 (176) E.L.T. 101 (Cal.) the appellant is entitled to utilize Cenvat Credit lying unutilized in their Cenvat Credit account as on 22.07.1996 for the clearance of May 2004. The said order was affirmed by Honble Apex Court reported in 2005 (185) E.L.T. A170 (SC). He also relied on the decision of this Tribunal in the case of C.C.E. Hyderabad Vs. Agarwal Industries Pvt. Ltd.-2006 (73) R.L.T. 49 (Cestat-Bangalore) in support of his contention.
4. On the other hand Ld. AR oppose the contentions of the Ld. Counsel and submits that as per notification no. 45/89 the appellant is not entitled to utilize the Cenvat Credit as there are certain conditions for utilization of the same. She further submits that the adjudicating authority has also examined the availment of Cenvat Credit on inputs which was used in clearance for May 2004 were not the same inputs on which credit was lying unutilized on 22.07.1996. Therefore, they cannot utilize the Cenvat Credit account. She further submits that the case law relied upon by the Ld. Counsel has been examined by the Ld. Commissioner (A). Therefore, case law relied upon by the Ld. Counsel are not relevant to the facts of this case.
5. Heard the parties. Considered the submissions.
6. In this case the appellant has utilized Cenvat Credit lying unutilized in their Cenvat Credit account as on 22.07.1996 for the clearance of May 2004. The contention of the Ld. AR is that in the clearance of May 2004 the inputs were not same which was used in clearance of May 2004. Therefore, Cenvat Credit cannot be utilized is not acceptable at all as if anybody has procured input for say in the month of April and availed Cenvat Credit thereon. Thereafter, the said inputs are lying in their factory but inputs which were procured in the month of March have been used for the manufacturing of final product and same product has been cleared in the month of April itself, is the contention of the Ld. AR is accepted then the Cenvat Credit is not available for payment of duty by the assessee. This is not the scheme of the Government for availment of Cenvat Credit. Therefore, the argument is not acceptable. Further, I find that the issue whether the Cenvat Credit lying unutilized as on 22.07.1996 when the Vanaspati Oil was exempted from duty can be utilized for the payment of duty on Vanaspati Oil in the month of May 2004 when the duty was introduced is entitled or not has examined by the Honble High Court of Calcutta in the case of Rasoi Ltd. (Supra) wherein the Honble High Court has held as under:
12. In view of the aforesaid provisions contained in Section 38A of the Act, I find substance in the contention of Mr. Bajoria that by reason of the omission of the rule, the right of the petitioner no.1 to have money-credit in terms of the notification under the rule cannot lapse. As pointed out by the Supreme Court in the case of Tungabhadra Industries ltd., Central Excise Act does not permit divestment of any accrued right of a person acquired by virtue of any of the provisions contained in the Act, rules, notification, order, etc. Moreover it is rightly pointed out by Mr. Bajoria that even in cases, where by specific enactment a vested right is taken away in violation of the provisions contained in Section 38A of the Act, the Apex Court has unhesitatingly preserved such accrued right.
13. That the petitioner no.1 had acquired money-credit to the extent of Rs.7,32,78,689/- in terms of the notification under the money-credit scheme. Such money credit scheme permitted the petitioner no.1 to utilise such credit for an amount not exceeding Rs.1000/- per MT at any time after the succeeding month in which the money-credit accrued. Thus, the petitioner no.1 is entitled to invoke such vested right in accordance with the conditions mentioned in the notification as it then stood. The aforesaid point is, thus, answered in favour of the petitioner no.1
7. The SLP filed against the said order by the revenue has also been dismissed by the Honble Apex Court.
8. Further, I find that in the case of Agarwal Industries Pvt. Ltd. (Supra) the matter came up before this Tribunal on the identical facts wherein this Tribunal has observed as under:
7. In view of the clear principle laid down by the Apex Court, the grounds of appeal made by the Revenue have no merits. In the grounds of appeal, the Revenue has elaborately discussed the difference between the Modvat scheme and the money credit scheme. In our view, these differences are not at all relevant. The main question is whether a right conferred by law and acquired in terms of certain provisions of the notification can be extinguished by rescinding of that notification. The Supreme Court and the various High Courts have answered this question in the negative. In other words as far as the present case is concerned, the accumulated money credit would not lapse. They would be entitled for payment of duty on vanaspati from the date of the introduction of duty on vanaspati. However, the duty payment shall be subject to the conditions mentioned in the notification by which the money credit was accumulated, namely Notification No. 45/89. Hence Revenuess appeal has no merits. The same is rejected.
9. Therefore, relying on the various decisions cited by the Ld. Counsel particularly in the case of Agarwal Industries Pvt. Ltd. (Supra) I hold that appellant has correctly utilized Cenvat Credit lying unutilized as on 22.07.1996 for the clearance of May 2004.
10. In these circumstances, the impugned order does not deserve any merit. Therefore, same is set aside and appeal is allowed with consequential relief, if any.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
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