Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Canara Traders & Printers Pvt. Ltd on 12 June, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI Appeal No. E/108/2006 [Arising out of Order-in-Appeal No.37/2005 (M-IV) & 33/2005 (M-IV) (D) dt. 30.11.2005 passed by the Commissioner of Central Excise (Appeals), Chennai] Commissioner of Central Excise, Chennai-IV Appellant Versus Canara Traders & Printers Pvt. Ltd. Respondent
Appearance:
Shri S. Nagalingam, AC (AR) For the Appellant Shri N. Viswanathan, Advocate For the Respondent CORAM :
Honble Ms. Sulekha Beevi C.S. Member (Judicial) Honble Shri V. Padmanabhan, Member (Technical) Date of hearing / decision : 12.06.2017 FINAL ORDER No. 40932 / 2017 Per Bench The appeal is filed by Revenue against the OIA No.37 & 33/2005 dt. 30.11.2005.
2. The respondent is a manufacturer of carton boxes of paper board falling under CETH 4819.19 and were availing the benefit of SSI Notification No.8/2003-CE dt. 1.3.2013 for the year 2003-04. It was alleged that aggregate value of clearances of all excisable goods for home consumption during the financial year 2002-03 in respect of the appellant company was Rs.12 Crores and hence they are not eligible for the benefit of Notification No.8/2003-CE dated /3/2003 for the financial year 2003-04 in terms of para 2 (vii) of the said Notification. The appellant continued to avail the said notification and cleared the goods without payment of duty under the said Notification. The appellants had failed to include the exempted clearances effected during 2002-03 in respect of gods falling under Chapter 49 (i.e products of printing industry) which alone formed the major portion (Rs.6.5 Crores) in calculating the aggregate value of clearances effected during the previous financial year i.e. 2002-03. Being pointed out, they paid by way of debit in Cenvat Credit Capital Goods Account being the duty due on the printed cartons etc. manufactured and cleared from their factory (press) during the period from April 2003 to February 2004whicn includes the duty liability of Rs.6,74,744/- for the period from April 2003 to December 2003. During the course of verification of records by the department, it was felt that the cenvat credit on capital goods was not taken properly by the respondent inasmuch as they had availed the double benefit of cenvat credit as well as claim of depreciation under the Income Tax Act for the the Assessment Year 2003-04. Accordingly, show cause notice was issued. Subsequently, the respondent surrendered the benefit of depreciation claimed under the Income Tax Act and filed the revised Income tax returns. In view of this, the authority accepted the Central Excise duty paid by the respondent from the capital goods accounts along with interest. In the impugned order, Commissioner (Appeals) also set aside penalty imposed by the original authority. Aggrieved by the above order, Revenue filed the present appeal on the ground that the capital goods credit availed by the respondent has been regularized only w.e.f. 14.06.2004 after filing revised IT returns. Hence on the date of payment of duty out of cenvat credit account, the respondent did not have valid credit for the said amount. Consequently, the order of the lower authority for imposition of penalty and demand of interest is required to be upheld.
3. With the above background, we heard Shri S.Nagalingam, D.R for appellant-Revenue as well as Shri N. Viswanathan, Advocate on behalf of the respondent.
4. During the period April to September 2003, the respondent availed the benefit of SSI exemption under Notification No.8/2003. Later on, it was noticed that they were not eligible for the benefit of the SSI exemption inasmuch as total value of clearances for the previous financial year had exceeded the maximum limit specified in the SSI notification. Consequently, respondent was required to pay the excise duty on goods cleared during this period. Such duty also has been paid making use of cenvat credit on capital goods. The department further disputed the credit under the capital goods account which was used for making such payment. However, the respondent regularized the same by giving up the benefit claimed by them under the Income Tax Act by way of depreciation. In view of this, it has to be held that the cenvat credit availed on capital goods is regular and consequently, the payment of excise duty out of such account is to be considered as a proper payment of duty.
5. In the light of the above discussions, we find no infirmity in the impugned order. Hence appeal filed by Revenue is dismissed.
(Operative part of the order pronounced in open court
on 12.06.2017)
(V.Padmanabhan) (Sulekha Beevi C.S)
Member (Technical) Member (Judicial)
gs
4
Appeal No.E/108/2006