Custom, Excise & Service Tax Tribunal
M/S. Bhilosa Text N Twist Pvt. Limited vs Commissioner Of Central Excise & S.T., ... on 1 June, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : E/443/2008 (Arising out of OIO-07/MP/VAPI/2008 dated 31.01.2008, passed by Commissioner Central Excise & Service Tax, Vapi) M/s. Bhilosa Text N Twist Pvt. Limited : Appellant (s) VERSUS Commissioner of Central Excise & S.T., Vapi : Respondent (s)
Represented by :
For Appellant (s) : Shri Anand Nainawati, Advocate For Respondent (s) : Shri J. Nagori, Authorised Representative For approval and signature :
Dr. D.M. Misra, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CORAM :
Dr. D.M. Misra, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical) Date of Hearing / Decision : 01.06.2016 ORDER No. A/10509/2016 Dated 01.06.2016 Per : Dr. D.M. Misra;
Heard both sides.
2. The brief facts of the case are that on the basis of specific information, investigations were carried out on visiting the premises of the three units of the appellant, namely Unit 1, Unit 2 & Unit 3 on 08/09.02.2005. The said Units had reversed cenvat credit of Rs.77,98,512/-, Rs.22,01,266/- & Rs.19,29,540/- voluntarily on the POY lying which were received with out reversal of credit under Rule 3(5) of the Cenvat Credit Rules,2004 from the respective units. On completion of necessary investigation show cause cum demand notice was issued alleging irregular availment of CENVAT credit and non payment of duty. On adjudication, the demand was confirmed. Aggrieved by the said Order, the Appellant filed Appeal before this Tribunal. As the appellants were not heard properly, this Tribunal remanded the matter to the adjudicating authority for allowing them fresh opportunity of hearing and decide the matter afresh. Accordingly, the ld. Commissioner, after hearing the appellants, adjudicated the Notice by confirming the demand partly, imposed penalty and also with a direction for recovery of interest. Even though the appellant has challenged the said order, the ld. Advocate restricted his arguments before us to the observations at Clause (viii) of Para 8 of the impugned order, wherein the adjudicating authority has directed for payment of interest at the appropriate rate on non payment/delayed payment of duty, under Section 11AB of the Central Excise Act, 1944.
3. Though the ld. Advocate fairly agrees that the interest has not been quantified, however, he submits that no interest is payable at all on the amount already paid by them. He submits that the demand confirmed against them for reversal of CENVAT credit under Rule 3(5) of Cenvat Credit Rules, 2004 on clearances of POY, as such from their respective Units for job work, is incorrect inasmuch as had they followed the alternate procedure prescribed under Cenvat Credit Rules, 2004, namely Rule 4(5)(a), they were not required to pay duty/reverse credit for sending the inputs as such for processing on job work basis.
4. Per-contra, ld. A.R. for the Revenue took us through the findings of the ld. Commissioner recorded at Para 5.3.2 to Para 5.3.6 of the Order and submits that after analysing the facts and evidences of the case and in particular the statements of the authorized representatives of the respective Units, who admitted to the violation of Rule 3(5) Cenvat Credit Rules,2004 and voluntarily reversed the credit, the ld. Commissioner has held that clearances of POY without reversal of the credit under Rule 3(5) of Cenvat Credit Rules, by said units were incorrect and accordingly, the reversal made subsequently, being admitting by the respective person Incharge of the units, cannot be faulted with. Once the Appellant had reversed the credit, liability of interest follows automatically as laid down under the statute.
5. We find that the ld. Commissioner has categorically recorded that all these payments/ reversal of credit by unit 1, Unit 2 and Unit 3 of the Appellant were made after admitting to the contravention of Rule 3(5) of Cenvat Credit Rules, 2004 as the POY cleared by them, was not covered under the purview of job work Notification No. 214/86-CE dated 25.03.1986. Hence, we find force in the contention of the Revenue that as the appellant has paid the duty/credit amount voluntarily and the same was appropriated in the impugned order then why interest on the same would not be chargeable. In the result, we agree with the ld. A.R. for the Revenue that direction for recovery of interest in the said Para 8(viii) of the impugned order is valid and correct in law. Consequently, the appeal is disposed of by remanding the matter to the adjudicating authority for quantification of the interest.
(Operative part of order pronounced in the open Court)
(P.M. Saleem) (D.M. Misra)
Member (Technical) Member (Judicial)
..KL
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