Custom, Excise & Service Tax Tribunal
Shree Cement Ltd vs Cce, Jaipur on 16 October, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing/Order : 16.10.2014
Appeal No. E/1970/2006-EX(DB)
[Arising out of Order-in-Appeal No. 178(HKS)CE/JPR-II/2006 dated 13.3.2006 passed by the Commissioner (Appeals), Central Excise, Jaipur]
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would 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 of the order?
4.
Whether order is to be circulated to the Department Authorities?
Shree Cement Ltd. Appellant
Vs.
CCE, Jaipur Respondent
Appearance:
Shri Jitin Singhal, Advocate - for the Appellant Ms. Sweta Bector, A.R. - for the Respondent Coram : Honble Mr. Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) F. Order No. 54153/2014 Per R.K. Singh :
Appeal is filed against Order-in-Appeal No.178(HKS)CE/JPR-II/2006 dated 13.3.2006 which set aside Order-in-Original No. 33/2004-DEMAND dated 29.3.2004 and confirmed demand of Rs.8,89,656/- under Rule 57CC of the erstwhile Central Excise Rules, 1944.
2. The facts, briefly stated, are as under :
The assessee, a manufacturer of cement, had captive mines where they produced limestone using explosives etc. While the limestone was used for the captive use but some of it was also cleared to another unit manufacturing cement (M/s Raj Cement). The impugned demand was confirmed on the ground that the goods cleared to M/s Raj Cement were not chargeable to duty and therefore as per the provisions of Rule 57CC ibid they were liable to pay 8% of the value of such clearances. The appellants have contended that they have already reversed the Cenvat credit on inputs used in or in relation to such clearances and that limestone so cleared cannot be called to be a manufactured item. During the hearing while the ld. A.R. stated that the provisions of Rule 57CC are quite obvious and correctly interpreted by the Commissioner (Appeals), the ld. Advocate for the assessee stated that in view of the reversal of the entire credit on inputs relatable to the clearances of limestone to M/s Raj Cement, recovery of an amount equal to 8% of the value of such clearances is not justified in terms of law. The appellant referred to the judgements of Gujarat High Court in the cases of CCE, Ahmedabad-II Vs. Maize products 2009 (234) ELT 431 (Guj.) and CCE Vs. Maan Pharmaceuticals Ltd. 2011 (263) E:T 661 (Guj.).
3. We have considered the submissions of both sides. We have also perused the judgements of Gujarat High Court cited by the assessee. We find that in paras 4 to 7 of the judgement in the case of Maize Products (supra), which was approvingly referred to in the case of Maan Pharmaceuticals Ltd. (supra), the Gujarat High Court observed as under :
4.?After hearing the parties, the Tribunal has issued the following directions.
(6)?We have carefully considered the submissions. We are convinced that the demand is highly disproportionate to the credit availed on the common inputs which could be attributed to goods which have been cleared without payment of duty. We are not going to the merits of the decision of the Commissioner in so far as the same relates to dropping of the demand in the four show cause notices as the Department is not in appeal before us. We are inclined to accept the offer of the appellant-company to reverse the entire credit attributable to the exempted product covered in the nine show cause notices and accordingly we set aside the order of the Commissioner confirming the demand in respect of the nine show cause notices with the direction to consider and accept their offer to reverse the entire credit on the common inputs i.e. caustic soda lye and hydrochloric acid. The department shall re-determine the credit taken on the common inputs i.e., caustic soda lye and hydrochloric acid in so far as they relate to demand proposed in the 9 show cause notices. The assessee shall produce the necessary evidence in the form of chartered accountants certificate for the relevant period. If any further credit is to be reversed, the same shall be reversed within four weeks from the date of receipt of the communication from the department.
5.?The appellant has produced relevant extracts from the relevant Rule of Cenvat Credit Rules, 2002 which relates to obligation of manufacturer of dutiable and exempted products. Under sub-rule (2) of the said Rules, a manufacturer is required to maintain separate accounts regarding inputs used for manufacturing of dutiable products and inputs used for manufacturing of exempted products. However, sub-rule (3) stipulates that, in a case where the manufacturer opts not to maintain separate accounts, the manufacturer shall follow either condition (a) or condition (b), as the case may be. Under the Rule, Explanation-I provides that the amount mentioned in any of the conditions shall be paid by the manufacturer by debiting the Cenvat credit or otherwise.
6.?Thus, in effect, the directions issued by the Tribunal are merely in consonance with the requirement of the relevant rule, and it is not possible to state that the Tribunal has committed any error in issuing such directions. The respondent-assessee having accepted before the Tribunal to reverse the Cenvat credit as recorded by the Tribunal in paragraph No. 4 of the impugned order as regards reversal of the amount involved and any more amount that may be reversible, the Tribunal has issued directions accordingly.
7.?In fact, the directions of the Tribunal primarily go to show that the direction was to re-determine the credit taken on common inputs and accept the offer to reverse such entire credit on common inputs insofar as they relate to demand proposed in the nine show cause notices. The Tribunal has also recorded the undertaking given by the respondent-assessee that if any further credit is to be reversed, the same shall be reversed within four weeks from the date of receipt of the communication from the Department. Hence, in the facts and circumstances of the case, it is apparent that the entire controversy has been decided by the Tribunal by merely remitting the matter back to the Adjudicating Authority to re-determine the credit in accordance with law. If any reversal has been made by the respondent-assessee, the same is subject to verification and adjustment if ultimately any further amount is found reversible.
4. It is evident that the ratio of the said judgement in the case of Maize Products (supra) is squarely applicable to the present case. Accordingly, we allow the appeal and remand the case to the original adjudicating authority for de novo adjudication in accordance with the ratio of the judgement of Gujarat High Court in the case of M/s Maize Products and to verify whether the entire credit in respect of inputs used in or in relation to the production of limestone cleared to M/s Raj Cement stands reversed and also to decide whether any interest liability with regard thereto arises. Needless to say that the assessee shall be liable to pay any differential amount of Cenvat credit which is found not to have been reversed and the interest chargeable, if any.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) RM 1