Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Coromandel Fertilizers Ltd on 20 July, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. E/1046/2006
E/CO-267/06
(Arising out of Order-in-Appeal No. AT/461/BEL/2005 dated 30/11/2005 passed by the Commissioner (Appeals) Central Excise, Mumbai-Zone-II
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
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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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Commissioner of Central Excise, Belapur
:
Appellants
VS
Coromandel Fertilizers Ltd.
Respondents
Appearance
Shri S.S. Katiyar, SDR Authorized Representative
Ms. Aparna Hirandagi, Advocate For Respondent
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of hearing : 20/07/2010
Date of decision : /2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
Revenue has filed this appeal.
2. Earlier this Tribunal has dismissed the appeal of the Revenue holding that it was not maintainable as the authorization to file the appeal was not proper. The Revenue went in appeal before the Honble High court of Bombay, The Honble High Court remanded this matter back to this Tribunal to pass the order on merits. Accordingly, I take up the appeal for disposal.
3. The facts of this case are that the respondent availed Cenvat credit during the period from 1.7.2003 to 5.7.2003 out of which a credit to the extent of Rs.2,89,284/- was utilized for payment of duty liability on clearance of excisable goods during the month of June 2003. It was alleged that the respondent has contravened the sub-rule (3) of Rule 3 of the Cenvat Credit Rules 2002. On pointing out the respondents paid the duty demand along with interest through TR6 Challan under protest. After realizing that they are not required to pay the duty, in view of the Notification No. 18/2003 CE(NT) dated 13.3.2003 amending Rule 3 ibid, they filed a refund claim of Rs. 5,73,568/-. The adjudicating authority rejected the entire claim but permitted to the respondent to restore the credit of Rs.2,89,284/- in the Cenvat account which was debited on 5.7.2003. The respondent filed an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) allowed the appeal of the respondent with the following observations:-
The issue involved in the present case is whether duty of Rs.2,89,284/- paid on 8.7.2004 along with interest of Rs.2,84,284/- by the appellants were refundable to them under the law. The appellants strongly rely upon the amendment in Rule 3 of Cenvat Credit Rule,2002 vide Notification No. 18/2003 CE(NT) dated 13.03.2003. Prior to 18.03.2003, the manufacturer was allowed to discharge duty liability for the month through cenvat account, only to the extent of credit available at the end of that month in terms of sub-rule (3) of Rule 3. However, this restriction was removed vide Notification No. 18/2003. The appellants have correctly pointed out that, the restriction to utilize cenvat credit was not in existence in the amended Rule 3 w.e.f. 18.03,2003. The issue involved was pertaining to the month of June, 2003 and hence the effect of this amendment was legally binding and correctly applicable to the present case. The lower authority has wrongly quoted and relied upon Boards Circular No. 201/9/20003 CX 6 dated 15.10.2003 for rejection of refund claim in question. It is doubtful whether such a circular exists. But even if it does, the legal position that, no circular of instruction can deprive the effect or benefit given vide any notification or any amendment made in such notification as held by the Apex Court in the case of Collector of Central Excise Vs. Himalayan Co-op. Milk Product Union Ltd., reported at 2000 (122) ELT 322 (S.C.). Therefore, the lower authority has erred in rejecting the claim on the said circular. In view of amendment in Notification No. 18/2003, the cenvat credit availed during the period from 1.7.2003 to 5.7.2003 (immediately succeeding month) which was utilized by the appellants for payment of duty for the month o fjune, 2003 was legally correct and hence, there would not have been any question of payment of equivalent duty thorough cash/personal ledger account. It was obvious that, the appellants were not legally required to pay duty through personal ledger account, but they made the payment in cash as per the direction by the Central Excise Officers. However, the lower authority has permitted the appellants to avail to restore the cenvat account of Rs. 2,89,284/- which was debited for payment of duty for the month of June 2003. In this situation, the option is left to the appellants to avail the credit either in cenvat account or personal ledger account. When the issue was resolved in favour of the appellants, they were not required to pay duty in cash, as alleged in show cause notice. Thus, in any case, as there was no delayed payment of duty on the part of the appellants, there was no question of charging interest. The lower authority while rejecting refund claim of interest vide impugned order he has not justified as to how the int4erest was attracted. Therefore, a recovery of interest was contrary to the provisions of law and hence, the appellant were entitled for refund of interest already paid. Therefore impugned order rejecting the claim of interest of Rs. 2,84,284/- paid by the appellants cannot be sustained and it is liable to be set aside. As result of this appeal, I allow the appellants to take credit of Rs. 2,89,284/- either in Personal Ledger Account or in Cenvat Account. However, consequent to this order, the appellants shall inform to the jurisdictional Assistant/Deputy Commissioner what option they are exercising. I also direct the lower authority to refund an amount of Rs. 2,84,284./- paid towards interest to the appellants after examining relevant payment challans and any other details, if any.
Aggrieved from the same, the Revenue is before me.
4. Shri S.S. Katiyar, the learned SDR submitted that as per Notification No. 13/2003-CE(NT) dated .1.3.2003 there was an amendment in Cenvat Credit Rule 3 (3). As per that amendment a new proviso was inserted w.e.f. 1.4.2003 replacing the earlier proviso. On 13.3.2003, vide Notification No. 18/03 CE(NT) the whole Sub-rule (3) of Rule 3 ibid was substituted by the new Rule 3(3) ibid which was also to be effective from 1at Day of April 2003.
5. The respondent has considered that the Notification No. 18/2003 CE (NT) dated 13.3.2003 is only effective w.e.f. 1.4.2003 and availed the credit wrongly as the amendment inserting the proviso to Rule 3(3) of the Cenvat Credit Rules, 2002 vide Notification No. 13/2003 CE (NT) was enforceable, the respondent has not complied with the said amended proviso vide Notification No.13/2003. Hence, the order-in-original is sustainable and the impugned demand dropped by the Commissioner (Appeals) is not justified. He further submitted that his contention is being supported by the corrigendum of 201/9/2003CX 6 dated 15.10.2003 also which confirms that the proviso to Rule 3(3) ibid was in force on 1.4.2003.
6. On the other hand, Ms. Aparna Hirandagi the learned Advocate appearing on behalf of the respondent submitted that as per the statue book showing the sub rule 3(3) of the Cenvat Credit Rule2002 (amended) was not having any proviso to Sub-rule 3(3) of Cenvat Credit Rule 2002, Hence, the amendment sought by Notification No. 13/2003 CE (NT) dated 13.3.2003 has been taken over by the Notification No. 18/2003 CE(NT) dated 13.3.2003. When the proviso to sub rule (3) of Rule 3 ibid was not the statue book, their respondent has rightly taken the credit and are entitled for refund claim with interest.
7. Heard both sides and perused the records.
8. On careful examination of the statue book and same is the part of this order as annexed to the Annexure 1.
9. In the statue book sub-rule (3) of rule 3 is reproduced are as under:-
1[(3) The CENVAT credit may be utilized for payment of
(a) any duty of excise on any final product; or
(b) an amount equal to CENVAT credit taken on inputs if such inputs are removed as such or after being partially processed; or
(c) an amount equal to the CENVAT Credit taken on capital goods if such capital goods are removed as such ; or
(d) an amount under sub rule (2) of rule 16 of Central Excise Rules, 2002.].
And the foot note indicates that same has been substituted w.e.f. 1.4.2003 by Notification No. 18/2003 CE(NT) 13.3.2003. In the statue book sub rule (4) has also been amended substituted by the earlier Notification No. 13/2003 CE(NT) dated 1.3.2003 is also indicated in the foot note. From bare perusal of the statue book it is clear that the substitution of the proviso to Sub-rule (3) of Rule 3 ibid which is reproduced here as under:-
provided that while paying duty, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month for payment of duty relating to the month.
was not in the statue book of the Cenvat credit Rules, 2002 which were effective from 1.4.2003. Hence, I do not find that the respondent has committed any error in availing the Cenvat credit as observed Commissioner (Appeals) in the impugned order.
10. Accordingly, I do not find any force in the arguments of the learned DR. Hence, the appeal filed by the Revenue is rejected, the impugned order is upheld. Cross-objections are also disposed of in the above manner.
(Pronounced in court on /2010)
(Ashok Jindal)
Member (Judicial)
Sm.
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