Custom, Excise & Service Tax Tribunal
M/S Flex Industries Ltd. Vs. C.C.E., vs Indore on 2 February, 2009
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III Date of hearing/decision:2.2.2009 Stay Application No.2715 of 2008 in Central Excise Appeal No.2705 of 2008 Arising out of the order in original No.36/Commr./CEX/IND/2008 dated 29.9.08 passed by the Commissioner of Central Excise, Indore., M.P. Appellant Respondent
M/s Flex Industries Ltd. vs. C.C.E.,
Indore
Appearance:
Shri K.K. Anand, Advocate for the appellant
Shri A.K. Rastogi, Authorized Departmental Representative (DR) for the Revenue Coram : Honble Mr. M. Veeraiyan, Member (Technical) Honble Mr. P.K. Das, Member (Judicial) Order No.____________________ Per P.K. Das:
The relevant facts of the case, in brief, are that the applicants were engaged in the manufacturing polyester chips on job work basis for Flex Industries , NOIDA. They received duty paid raw materials supplied free of cost by the NOIDA unit for use in job work materials. But NOIDA unit availed the credit on the raw materials, which were sent to the applicant for job work. NOIDA unit was manufacturing the final product polyester film and cleared on payment of duty by utilizing Cenvat credit. The allegation and findings are that the applicant used raw material and not utilised the credit and , therefore, the said amount of credit would be included in the assessable value of the job work material. Commissioner confirmed the demand of duty of Rs.1.01 crores and imposed penalty of equal amount along with interest.
2. After hearing both sides and on perusal of the record, we find that NOIDA unit utilised the Cenvat credit and cleared the final product on payment of duty. The Honble Supreme Court in the case of C.C.E., Pune vs. Dai Ichi Karkaria Ltd. 1999 (112) ELT 353 (SC) held that modvat credit utilized by the assessee would not be included in the assessable value of the final product. The main grievance of the Revenue is that the credit was not utilised by appellant unit and therefore, the amount would be included in the value. We notice that prima facie, there is revenue neutrality. In view of that, the applicant made out a prima facie case for wavier of pre-deposit of the entire duty and penalty. Accordingly, pre-deposit of duty and penalty is waived till disposal of the appeal. Stay petition is allowed.
(Dictated and pronounced in the open Court) (M. Veeraiyan) Member (Technical) (P.K. Das) Member (Judicial) scd/