Custom, Excise & Service Tax Tribunal
Parle Agro Pvt. Ltd vs Commissioner Of Central Excise, Raigad on 17 August, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. E/1323/05-Mum (Arising out of Order-in-Appeal No. AT/24/RGD/2005 dated 25.1.2005 passed by Commissioner of Central Excise (Appeals), Mumbai) For approval and signature: Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, 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?
====================================================== Parle Agro Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Raigad Respondent Appearance: Shri H.G. Dharmadhikari, Advocate, for appellant Shri Ajay Kumar, Joint Commissioner (AR), for respondent CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial) Date of Hearing: 10.7.2015 Date of Decision: 17.8.2015 ORDER NO Per: P.K. Jain
Brief facts of the case are that the appellant is engaged in the manufacture of aerated waters. During the period April 1994 to November 1996 they had sold empty glass bottles on commercial invoices without reversing the cenvat credit. They are availing cenvat credit on receipt of the glass bottles. As per the show cause notice, such empty glass bottles were bearing assessees own brand name as well as bottles bearing the brand name belonging to others. It was also noted that the assessee has sold the empty bottles due to change in packing sizes from 250 ml to 300 ml and change in the brand name from Bisleri Club Soda to Parle Bailley Soda and also on account of the bottles bearing the brand name of other companies received into the assessees factory. As per the provisions of the then Rule 57F of the Central Excise Rules, the inputs on which credit has been taken could be used in relation to the manufacture of final product or may be removed after intimating to the Assistant Commissioner of Central Excise having jurisdiction over the factory for home consumption and all such removal of inputs for home consumption shall be made on payment of appropriate duty of excise leviable. The said Rule was amended w.e.f. 26.9.1995 wherein the requirement of intimation to Assistant Commissioner was done away with. Thus the Revenues case is that since the inputs have been removed for home consumption, the appellant was required to reverse the cenvat credit availed by them.
2. Learned counsel for the appellants main submission was that glass bottles are used as a packaging material for aerated waters and these bottles go to the market and come back and are reused. However, many a times the bottles are broken either in the market or during the manufacturing or remanufacturing process. Further, after certain time, the printing on the bottle becomes faint and the bottles also are scratched and such bottles are withdrawn by them from the market and sold as used or scrap bottles to traders. The main submission was that the inputs were not sold as it was received in the factory but were used number of times and due to frequent use they became redundant for reuse and were therefore sold. It was also submitted that when the used bottles used to return from the market, sometimes the used empty bottles of other brand name were also returned. These bottles are also sold. It was further contended that as far as the bottles of other brand owners are concerned, the appellant has not availed any credit and, therefore, there is no question of paying or reversing any credit on such bottles. Even in respect of their own bottles, these have been put to use and it is only after using the bottles and when they became old and unusable, the same were sold. The learned counsel further emphasized that the Rule stipulates as such which would imply that the goods are without use. However, the bottles sold by them were used bottles and hence no cenvat credit is required to be reversed. The learned counsel also submitted copy of the order-in-original No. 8/Commr.(AH)/05 dated 27.1.2005 passed by the Commissioner on a similar issue. The learned counsel also submitted that similar issue has come up in number of cases particularly with reference to capital goods and it has been the consistent view of the courts and the Tribunal that once the capital goods have been used, no credit need be reversed. It was also submitted that extended period of limitation is not invokable in the facts and circumstances of the case as the information was available in the balance sheet. In respect of different contentions, the learned counsel quoted the following case laws:-
(i) CCE, Lucknow vs. Roll Tubes Ltd. reported in 2007 (215) ELT 426 (Tri.-Del.);
(ii) CCE, Mumbai vs. Crompton Greaves Ltd. reported in 2004 (174) ELT 231 (Tri.-Mum.);
(iii) Kirloskar Electric Co. Ltd. vs. CCE, Bangalore reported in 2002 (144) ELT 647 (Tri.-Bang.);
(iv) Harsh International (Khaini) Pvt. Ltd. vs. CCE reported in 2012 (281) ELT 714 (Del.);
(v) Madura Coats Ltd. vs. CCE, Tirunelveli reported in 2005 (190) ELT 450 (Tri.-Bang.);
(vi) Cummins India Ltd. vs. CCE, Pune-III reported in 2007 (219) ELT 911 (Tri.-Mum.);
(vii) Hindalco Industries Ltd. vs. CCE, Allahabad reported in 2003 (161) ELT 346 (Tri.-Del.);
(viii) Kirloskar Oil Engines Ltd. vs. CCE, Nasik reported in 2004 (178) ELT 998 (Tri.-Mum.);
3. Learned AR, on the other hand, took us through the original order and submitted that the appellant when cleared the goods did not intimate to the Assistant Commissioner and, therefore, it cannot be said that the bottles were used. He further submitted that it will be seen from the original order that the original authority has taken the view that the glass bottles were not used. He further submitted that the Commissioner (Appeals) in his order has taken the view that the relevant glass bottles were not unusable but were still capable of use and cannot be treated as a scrap. He submitted that large number of glass bottles were sold due to the change in their brand name and also the size of the bottles.
4. We have considered the submissions made by both the sides. We find that the appellant from the beginning is claiming that the bottles sold were used glass bottles and these were sold on account of change in the brand name from Bisleri Club Soda to Parle Bailley Soda. It is also their contention that they have sold their bottles not only on their brand name but other brand name. Further, all the bottles which were sold by them were used and they have not sold any bottles which were new and unused. We observe that the observation of the original authority that the bottles were unused is without any supporting evidence and we also observe that in the findings itself the original authority has mentioned the explanation of the appellant that the glass bottles were old, unusable or broken or brand name was scratched etc. Thus the finding of the original authority is without any basis. We also find that the Commissioner (Appeals) in his findings has only stated that the bottles were not unusable. Whatever the reason may be, there are no evidences that the bottles sold were unused bottles and in our view, the criteria prescribed under Rule 57F(1) is satisfied i.e. the inputs have been used in the manufacture of final products. Since the bottles have been used in the manufacture of final products, we do not find any reason to demand the cenvat credit availed on such glass bottles. In the result, the demand is not sustainable. Consequently, the penalty is also not sustainable.
5. In view of above, the appeal is allowed.
(Pronounced in Court on 17.8.2015) (S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical) tvu 1 7