Custom, Excise & Service Tax Tribunal
M/S Bhusan Power & Steel Ltd vs Commissioner Of Central Excise & ... on 30 August, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Ex. Appeal No.282/11
Arising out of O/O No.CCE/BBSR II/4-5/Commissioner/2011 dated 28.01.2011 passed by Commr. of Central Excise & Customs, BBSR.
For approval and signature:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
1. Whether Press Reporters may be allowed to see
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 His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s Bhusan Power & Steel Ltd.
APPELLANT(S)
VERSUS
Commissioner of Central Excise & Customs, BBSR II
RESPONDENT (S)
APPEARANCE Shri K. K. Acharya, Advocate for the Appellant (s) Shri S. Chakraborty, Asstt. Commr. (A.R.) for the Department CORAM:
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER DATE OF HEARING & PRONOUNCEMENT : 30. 08. 2013 ORDER NO.FO/A/71038/2013 Per Dr. D. M. Misra :
This appeal is filed against the Order-in-Original No. CCE/BBSR II/4-5/Commissioner/2011 dated 28.01.2011 passed by Commr. of Central Excise & Customs, BBSR II.
2. Briefly stated the facts of the case are that the Appellants are engaged in the manufacture of sponge iron, steel ingot/billet falling under Chapter 72 of the Central Excise Tariff Act, 1985. The Appellant had installed a Captive Power Plant for generation of electricity and used the same in the manufacture of their final products. For the purposes of generation of electricity, the Appellant used various inputs and input services, on which they have availed cenvat credit. The allegation of the Department is that since a part of generated electricity utilizing the inputs on which cenvat credit availed, were sold outsiders, therefore, the Appellants are not eligible to cenvat credit on the inputs or required to discharge 10% of the value of electricity generated and sold to outsiders. In the mean time, the Govt. of India has brought a retrospective amendment to Rule 6 of Cenvat Credit Rules, 2004 through Section 72 & 73 of Finance Act, 2010, whereby, the assessee were allowed to reverse proportionate cenvat credit availed on the inputs that had gone into the manufacture of exempted product. Consequently, the Appellant had calculated the amount of cenvat credit that were proportionately utilized in the generation of electricity sold to outsiders. The total amount of cenvat credit calculated by the Appellant was Rs.25,15,583/- for the relevant period and interest of Rs.21,82,196/- and the said amounts have been duly certified by a Chartered Accountant. The ld. Commissioner, though did not dispute about the quantum of proportionate credit and accepted the payment along with interest, but imposed a penalty of Rs.2.00 lakhs under Rule 15 (1) of the Cenvat Credit Rules, 2004. Aggrieved by the said order to the extent of imposition of penalty, the Appellants are in appeal.
3. The ld. Advocate, Shri K. K. Acharya, appearing for the Appellant, has submitted that by virture of Section 72 & 73 of the Finance Act, 2010, Rule 6 of the Cenvat Credit Rules, 2002/2004, had been amended retrospectively and an assessee has been given an opportunity to reverse proportionate cenvat credit availed on the inputs that had gone into the manufacture of finished exempted products. Consequently, the Appellant had calculated the cenvat credit proportionately and reversed the same along with interest by following the procedure laid down under the said Section 72/73 of the Finance Act, 2010. The ld. Advocate has submitted that the impugned order passed by the ld. Commissioner imposing penalty of Rs.2.00 lakhs on the Appellant, is un-sustainable in view of Explanation II to sub-section (5) of Section 72/73 of the Finance Act, 2010, wherein it has been laid down that no penalty be imposed on reversal of proportionate credit. The ld. Advocate has further referred to the judgement of the Tribunal in the case of Standards INTL. Precision Engineers P.Ltd. Vs. CCEx., Bangalore II reported in 2010 (258) ELT 456 (Tri.-Bang.), wherein this Tribunal on similar facts and circumstances, has set aside the penalty imposed. The ld. Advocate has further submitted that even though Rule 15 (1) had not been invoked in the impugned notice, the ld. Commissioner has travelled beyond the show-cause notice in imposing penalty under Rule 15 (1) of Cenvat Credit Rules, 2004.
4. The ld.A.R. for the Revenue, reiterated the findings of the ld. Commissioner. However, he did not place any contrary decision to the one cited by the ld.Advocate for the Appellant.
5. Heard both sides and perused the records. I find that the issue involved in the present case revolves in a very narrow compass. I find that it is not in dispute by either side on the quantum of proportionate cenvat credit of Rs.25,15,583/- availed by the Appellant during the period 2005-06, 2006-07 & 2007-08, which relate to inputs utilized in the generation of electricity, which were not consumed within the factory of production, but sold out factory. I find that by virture of Section 72/73 of Finance Act, 2010, the assessees were given an opportunity to reverse proportionate cenvat credit availed on inputs that had gone into the manufacture of exempted product for the period from September, 2004 to March, 2005. I find that a procedure has been laid down for reversing the said proportionate credit and the said amendment was given retrospective effect starting from 10th September, 2004 and ending of 31st March, 2008. It is not in dispute that the present period falls within the laid down period as mentioned in the said Finance Act, 2010. An explanation has been placed in the said retrospective amendment dealing with penal consequences on reversal of the credit for the relevant period. The said Explanation reads as follows :
Explanation. - For the removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have been so punishable had this section not come into force. I agree with the submissions of the ld. Advocate for the Appellant that in view of the specific Explanation contained in the said retrospective amendment no penalty could be imposed. The ld. Advocate drew my attention to the findings of the ld. Commissioner, wherein the ld. Commissioner himself had acknowledged that both the Department and the Assessee were in a wrong notion on the applicability of relevant provisions during the said period. In these circumstances, I do not find any merit in imposing penalty on the Appellant. Consequently, imposition of penalty of Rs.2.00 lakhs (Rupees two lakhs only) under Rule 15 (1) of the Cenvat Credit Rules, 2004, deserves to be set aside and accordingly, the same is set aside. Consequently, the order of the ld.Commissioner is modified to the extent of imposition of penalty of Rs.2.00 lakhs imposed under Rule 15 (1) of the Cenvat Credit Rules, 2004. Appeal is disposed of on the above terms.
( Dictated and pronounced in the open Court) Sd/ (DR. D.M.MISRA) MEMBER (JUDICIAL) mm 5 Ex. Appeal No.282/11