Custom, Excise & Service Tax Tribunal
Naranja Sahakari Sakkare Karkhane Ltd vs Commissioner Of Central Excise, ... on 16 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20107/2015-SM [Arising out of Order-in-Appeal No. 532/2012 dated 11/10/2012 passed by the Commissioner of Central Excise, Mangalore] Naranja Sahakari Sakkare Karkhane Ltd. Imampur Village, Near Janwada Bidar 585 401 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Belgaum No. 71, Club Road, Central Excise Building, Belgaum - 590 001 Karnataka Respondent(s)
Appearance:
Shri Nagendra Murthy, Advocate No. 244, 1st Cross, Banashankari 3rd Stage, 2nd Block Bangalore 560 085 Karnataka For the Appellant Shri N. Jagdish, AR For the Respondent Date of Hearing: 16/12/2016 Date of Decision: 16/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21453 / 2016 Per: S.S GARG The present appeal is directed against the impugned order dated 11.10.2012 passed by the Commissioner (Appeals) whereby he rejected the appeal of the appellant and confirmed the Order-in-Original. Briefly the facts of the case are that the appellants are engaged in the manufacture and clearance of sugar and molasses falling under Chapter Heading 1701.39 and 1703.10 of the first schedule. A show-cause notice dated 27.04.2011 was issued to the appellant alleging irregular availment of cenvat credit on common input services. A show-cause notice was adjudicated by the Superintendent of Central Excise wherein it was inter alia held that the appellant had availed cenvat credit on GTA and Security Services which had been used for the manufacture of both dutiable i.e. sugar and molasses and exempted goods like bagasse and that the bagasse manufactured by the appellant had been used to generate steam within the factory, that the steam so generated had been used for generation of electricity and that part of the electricity captively generated by them had been sold to KPTCL for consideration and in view of the fact that the input services had been utilized for manufacture of both dutiable and exempted goods. Therefore the appellants were liable to reverse proportionate cenvat credit attributable to the electricity sold to KPTCL. The cenvat credit so payable was Rs. 60,321/- (Rupees Sixty Thousand Three Hundred and Twenty One only) for the period April 2010 to March 2011 in terms of Rule 14 of Cenvat Credit Rules read with Section 11A(1) of Central Excise Act and were also liable to pay interest and also imposed penalty of Rs. 2,000/- (Rupees Two Thousand only). Aggrieved by this original order, the appellant filed an appeal before the Commissioner who vide the impugned order rejected the appeal and hence the present appeal.
2. Heard both the parties and perused the records.
3. Learned counsel further submitted that the impugned order is not sustainable in law. He further submitted that it is an accepted position that the provisions of Rule 6 of Cenvat Credit Rules are applicable only if there is a situation where cenvat credit in respect of inputs or input services is commonly availed for manufacture of dutiable and exempted goods whereas in the present case, cenvat credit has been admittedly availed on input services like GTA and Security Agency Services which have been used only for the manufacture of sugar and molasses and never exclusively used for the manufacture of exempted goods as alleged and hence the provisions of Rule 6 of Cenvat Credit Rules are inapplicable. He further submitted that on the identical issue, this Tribunal vide its Final Order No. 20452/2016 dated 23.06.2016 has decided the matter in favour of the appellant after holding that the provisions of Rule 6 of the Cenvat Credit Rules 2004 are not applicable in the instant case since bagasse could not be equated to exempted goods.
4. On the other hand the learned AR reiterated the findings in the impugned order.
5. After considering the facts and circumstances, I am of the view that keeping in view the order passed by the Tribunal in favour of the appellant as cited supra on the identical issue, therefore I allow this appeal by setting aside the impugned order.
(Operative portion of the Order was pronounced in Open Court on 16/12/2016) (S.S GARG) JUDICIAL MEMBER iss