Custom, Excise & Service Tax Tribunal
Star Coolers & Condensers (P) Ltd vs Commissioner Of Central Excise Nasik on 2 December, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. E/1903/06 [Arising out of Order-in- Appeal No. CEX/AKD/81/APL/NSK/06 dated 31-03-2006 passed by the Commissioner Central Excise (Appeals), Nasik ] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) =======================================================
1. Whether Press Reporters may be allowed to see : No
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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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Star Coolers & Condensers (P) Ltd
:
Appellant
VS
Commissioner of Central Excise Nasik
:
Respondent
Appearance
Shri. Bharat Raichandani, Advocate with Srhi. Mahesh Raichandani, Advocate for the Appellants Shri. S.V. Nair, Asstt. Commissioner(A.R.) for the Respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial) Date of hearing: 2/12/2016 Date of decision: 2/12/2016 ORDER NO.
The appellant had cleared various consignments availing exemption Notification No. 6/2002-CE dated 1-3-2002. At the time of clearance of the goods they have reversed the Cenvat credit attributed to the input used in the manufacture of exempted goods. The exemption was based on procedure provided under the provisions of Central Excise (Removal of the Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, according to which the buyer of the goods had provided CT-2 certificate for clearance of the goods without payment of duty. The department has raised the demand on the ground that appellant was suppose to pay 8% of the value of the exempted goods in terms of Rule 6 of Cenvat Credit Rules, 2002. Accordingly difference between amount calculated at 8% and actual credit reversed that comes to Rs. 1,15,239/- which was demanded. The adjudicating authority confirmed the demand and in the impugned order Ld. Commissioner(Appeals) upheld the same, therefore the appellant is before me.
2. Shri. Bharat Raichandani, Ld. Counsel with Shri. Mahesh Raichandani, Advocate appearing on behalf of the appellant, he submits that demand is time bar for the reason that clearance under exemption were made against CT-2 certificate. On each and every clearances under exemption they have reversed the credit on the pro- rata basis and the same was declared on the invoices. He submits that copy of CT-2 certificate were submitted to the department therefore department was very well aware of clearances of goods under exemption. The quantum of the reversal was also known to the department. Therefore there is no suppression of fact on the part of the appellant. This fact has not been properly considered by both the lower authorities. He further submits that since the appellant had been reversing the actual credit at the time of clearances, reversal at the rate of 8% of the value of the exempted goods in terms of Rule 6 was not required, therefore on merit also the demand is not sustainable.
3. Shri. S.V. Nair, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. I have carefully considered the submissions made by both sides and perused the record.
5. I find that the clearances under exemption were made against CT-2 certificate as per procedure laid down under the provisions of Central Excise (Removal of the Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. The CT-2 certificate obtained from the jurisdictional Asstt. Commissioner of the buyer was provided to the supplier of the goods and supplier of the goods is under obligation to submit CT-2 certificate to their jurisdictional Superintendent. It is also undisputed that reversal of cenvat credit on pro-rata basis was made by the appellant and same was mentioned in the invoice. Therefore availment of exemption notification reversal of the credit, quantum of the reversal was disclosed to the department therefore nothing prevented department to issue a show cause notice well within the normal period of one year as there was no suppression of facts on the part of the appellant. Considering this fact, I am of the clear view that demand is barred by limitation as the show cause notice was issued after one year. I also observed that since the appellant had been reversing the credit at the time of clearance of the goods on pro rata basis no further demand under Rule 6 can be made. Honble Supreme Court in case of Commissioner of C. Ex. Mumbau-I Bombay Dying and Manufacturing Co. Ltd [2007(215) ELT 3(S.C.)] held that in case of reversal of credit even if made after clearance of the goods before utilization of the credit i.e. sufficient requirement. Therefore even on the merit also the appellant was not required to pay 8% of the value of the exempted goods. As per my above discussion, impugned order is set aside. Appeal is allowed on merit as well as on limitation.
(Pronounced in Court ) Ramesh Nair Member (Judicial) sk 2 E/1903/06