Custom, Excise & Service Tax Tribunal
C.C.E., Allahabad vs Govind Nagar Sugar Ltd on 11 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH : ALLAHABAD
Appeal Nos. E/2534 & 2535/2008-EX[SM]
E/CROSS/31/2009
Arising out of Order-in-Appeal Nos. 79,80/CE/ALLD/2008 dated 16.10.2008 passed by Commissioner (Appeals), Central Excise, Allahabad.
For approval and signature:
HONBLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982? : No
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? : Yes
3. Whether His Lordship wishes to see the fair copy
of the Order? : Seen
4. Whether Order is to be circulated to the Departmental
Authorities? : Yes
C.C.E., Allahabad APPELLANT
VERSUS
Govind Nagar Sugar Ltd. RESPONDENT
APPEARANCE Shri D.K. Deb, (Asstt. Commr.), A.R. for the Appellant Shri P.K. Mittal, Advocate for the respondent.
CORAM:
HONBLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) DATE OF HEARING & PRONOUNCEMENT : 11. 08. 2016 FINAL ORDER NO._ 70839-70840/2016 Per Mr. Anil Choudhary :
These appeals have been preferred by Revenue against common Order-in-Appeal dated 16/10/2008.
2. Issue involved in these appeals is that, whether under the facts and circumstances where capital goods were acquired prior to the scheme of modvate was implemented and such capital goods after user of about more than 10 years have been disposed of during the Financial Years 2006-07. Whether the respondent-assessee is required to pay duty on removal or clearance of the same under the Rule 3(5A) of CCR, 2004. The details of the demand are as follows:-
Appellant No. Name of the Appellant Appeal No. O.I.A. No. and date Passed by Amount duty confirmed Amount of penalty imposed 1 M/s. Govind Nagar Sugar Ltd., Walterganj, Basti (Appellant No.1) 210/CE/Appl/Alld/2007 14/Dem/07 dt 28.09.07 The Asstt. Commissioner Central Excise Div. Faizabad Rs.1,47,166/- alongwith interest Rs,1,47,166/-2
M/s. Govind Nagar Sugar Ltd., Walterganj, Basti (Appellant No.2) 1/CE/Appl/Alld/2008 MP(DEM-33/07)12 of 2007 dt 29.10.07 The Additional Commissioner C.Ex. Alld Rs.14,59,228/ alongwith interest Rs.14,59,228/
3. Heard the parties.
4. The admitted facts are that the respondent-assessee is manufacturer of Sugar and Molasses. They sold old plant and machinery as waste and scrap during the year 2006 and 2007, without payment of duty. The said scrap was alleged to have been generated out of capital goods pursuant to dismantling of old and unusable plant and machinery which have been acquired during the period 1992 and 1993. The relevant date for acquisition are 15/9/1992 to 3/6/1993.
5. The learned counsel for the respondent-assessee have argued that the whole demand is ab-initio void as it is nowhere case of the Revenue nor any facts have been brought on record that the appellant have taken any Cenvat credit on the same. It is further their case that the said capital assets were acquired prior to the launching of the Modvat Credit Scheme, which was launched for the first time from 1/3/1994 (on capital goods). Thus, the duty have been demanded only on presumption and accordingly learned Commissioner (Appeals) rightly set aside the Order-in-Original imposing duty on the removal of old scrap capital goods being plant and machinery with penalty under Rule 25 and 27 of the CER, 2002. Accordingly, pleads for dismissal of the appeal.
6. Learned A.R. for Revenue have relied on the rulings of this Tribunal in the case of R.B.M.P. Mills Ltd. Vs. C.C.E., wherein the assessee had cleared steel scrap during the period March, 1986 to July, 1987 without payment of duty and the appellant was a manufacturer of machine tools accessories and they had also opted for Modvat Credit facility of duty paid on inputs from March, 1986 under the Modvat Scheme where credit have been taken on inputs. The waste and scrap generated was required to be cleared on payment of duty. Under such circumstances, this Tribunal held that the demand of duty was justified.
7. Having considered the rival contentions. I find that it is a undisputed fact that the appellants have not taken any Cenvat or Modvat credit on the plant machinery in question. Further there is no scope of any presumption of having taken credit when the assets were acquired prior to launch of Modvat Scheme w.e.f. 1/3/1994, with respect to capital goods. I further find that Rule 3(5) of CCR has provided for a condition precedent which is, that the assessee must have taken Cenvat Credit on the capital goods which are subsequently removed and accordingly under such circumstances the assessee is liable to pay duty on removal of capital goods, subject to allowance of depreciation under the said Rule. It is also an admitted fact that the respondent-assessee in the present case have held the assets for more than 10 years and as such is entitled 100% depreciation of Cenvat Credit, if any, taken at the time of acquisition. Under these observations, I find that the impugned order is correct and requires no interference. Accordingly, the appeals of Revenue are dismissed. The respondent-assessee will be entitled to consequential benefits, in accordance with law.
8. The cross objection also stands disposed of.
(Order was dictated in the open Court)
(A.CHOUDHARY)
MEMBER (JUDICIAL) Patel/-
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E 2534 & 2535/EX[SM]
E/CROSS/31/2009