Custom, Excise & Service Tax Tribunal
M/S. Thiru Arooran Sugars Ltd vs Cce, Pondicherry on 20 October, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/488/2005
(Arising out of Order-in-Original No. 3/2005 dated 10.3.2005 passed by the Commissioner of Central Excise, Pondicherry)
For approval and signature:
Honble Ms. Jyoti Balasundaram, Vice President
Honble Dr. Chittaranjan Satapathy, Technical 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 the Members wish to see the fair copy of the Order?
4. Whether Order is to be circulated to the Departmental authorities?
M/s. Thiru Arooran Sugars Ltd. Appellants
Vs.
CCE, Pondicherry Respondent
Appearance Shri S. Muthuvenkataraman , Advocate, for the Appellants Shri V.V. Hariharan, Jt. CDR for the Respondent CORAM Honble Ms. Jyoti Balasundaram, Vice-President Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing: 20.10.2009 Date of Decision: 20.10.2009 Final Order No. ____________ Per Dr. Chittaranjan Satapathy Heard both sides. We find that while hearing the stay petition and allowing complete waiver of the predeposit, the Bench had taken into consideration the following:-
The appellants had taken input duty credit to the extent of over Rs.2.8 crores on components and parts of boiler, turbine and pollution control equipment during the period 1995 2000. The Commissioner of Central Excise has disallowed this credit on the ground that, during the said period, the said components and parts of machinery were not available in the assessees factory at Achithur. After examining the records and hearing both sides, we find, prior to the above period, the assessee had their factory at Tirumandankudi, where they had been availing similar credit. In respect of such past availment of credit, a dispute had arisen between them and the Department, which was ultimately resolved by the Commissioner (Appeals) in Orders-in-Appeal Nos. 84 to 136/2003 dated 27.2.2003. This order of the Commissioner (Appeals) held that the components and parts were eligible for input duty credit and also that the said inputs had not been removed by the assessee out of their factory. It was categorically held by the appellate authority that the inputs had lost their identity through utilization in the cogeneration plant. Ld. Counsel for the assessee has pointed out that this crucial finding of the appellate authority has become final for want of challenge by the Department. Thus, we find that the ground on which the input duty credit in question was disallowed by the Commissioner is untenable in view of the Order-in-Appeal cited by the assessees counsel.
2. The learned counsel appearing for the appellants further argues that had the Department not disputed the entitlement to the impugned credit, the appellants would have availed it before shifting their unit and transferring the boiler, turbine, pollution control equipment. According to him, what the lower appellate authority has allowed is the credit relating to the earlier period and the same has no connection to the subsequent transfer of the boiler etc. or shifting of the unit. In fact, the lower appellate authority was very much in the know of such transfer and shifting which is recorded in his Order-in-Appeal under which the credit has been permitted. The learned counsel further argues that the appellants have transferred their unit from Tirumandankudi to Achithur but the ownership remains with the appellants and the assets and liabilities remain with them. Hence the credit allowed by the lower appellate authority in the appeal proceedings, which has not been challenged by the Department, cannot be denied to the appellants.
3. Heard the learned Jt. CDR. He raises no question about the factual aspect of the case. He reiterates the finding of the lower authority that the appellants are not entitled to the transfer of the credit in terms of Rule 8 of the CENVAT Credit Rules.
4. After hearing both sides and perusal of the case records we find that the present case is not one of the cases which is sought to be covered under Rule 8 of the CENVAT Credit Rules. This is not a case where factory has been shifted at a time when there is unutilized credit in the balance. The rule requires that when a factory shifts to a new site, the credit lying unutilized shall be allowed to be transferred if the inputs and the capital goods are also transferred to the new site. In the present case, the transfer of the unit has taken place first and the lower appellate authority has allowed the credit to the appellants at a later point of time. Rule 8 does not envisage such a situation nor does it provide for such a case. Moreover, in the present case, the inputs were utilized long ago and only the credit in respect of them was disputed which has been finally decided by the lower appellate authority against which the Department, as mentioned earlier, has not filed any appeal. Since the inputs had been utilized earlier and there is nothing remaining to be transferred of the said inputs, for that reason also Rule 8 cannot have any application to the present case. The fact that the boiler etc. manufactured utilizing such inputs have been transferred later on were sister concern of the units has also no relevance because the credit in question is not related to the boilers but to the inputs used in such boilers. Normally if dispute was not raised in respect of input duty credit in first place or if the appeal would have been decided in good time, the appellants would have utilized the credit for clearance of the finished goods instead of paying duty through cash. It is only because of the departmental action to unjustly deny the credit the appellants were not able to utilize the same. To deny the appellants to utilize the credit even after the lower appellate authority has allowed the same would be grossly unfair and unjust and there is no provision in the rules for such denial. Hence, we set aside the impugned order and allow the appeal with consequential benefit to the appellants.
(Dictated and pronounced in open court)
(Dr. Chittaranjan Satapathy) (Jyoti Balasundaram)
Technical Member Vice President
Rex
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