Custom, Excise & Service Tax Tribunal
M/S Trinetra Cement Limited vs Cce, Jaipur-Ii on 9 November, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing/decision: 09.11.2016 Excise Appeal No. 58606 of 2013 (Arising out of order in original No. 07/2013/C.Ex/JPR-II dated 29.03.2013 passed by the Commissioner of Central Excise, Jaipur). M/s Trinetra Cement Limited Appellant Vs. CCE, Jaipur-II Respondent
Appearance:
Sh. Rahul Tangri, Advocate for the appellant Sh. M. R. Sharma, AR for the Respondent Coram:
Honble Mr. Justice (Dr.) Satish Chandra, President Honble Mr. Ashok K. Arya, Member (Technical) Final Order No. 54971 / 2016 Per: Justice (Dr.) Satish Chandra:
The present appeal is filed against the order dated 29.03.2013 passed by the Commissioner of Central Excise, Jaipur.
2. Brief facts of the case are that the appellant is engaged in the manufacture of ordinary Portland cement and pozzolana Portland cement falling under chapter 25 of the First Schedule to the Central Excise Tariff Act, 1985. The appellant had availed cenvat credit on input, capital goods and input services.
3. The first dispute is pertaining to cenvat credit of Rs. 5,18,98,485/- on inputs and capital goods which was denied by the lower authority. Ld. Counsel for the appellant submits that substantial credit was taken out of total credit in the first year itself as per Rule 4(2)(a) of the Cenvat Credit Rules, 2004. The cenvat credit is allowed @ 50% in the first year and remaining in the second year. But the assessee has wrongly availed 100% credit in the first year itself. The assessee submitted that cenvat credit which was availed was not utilised so no interest can be paid. Similarly, No penalty can also be levied. Ld. Counsel relies on the decision in the case of CCE vs. Satish Industries, 2013 (298) ELT 188 (Bom.) where it was observed that-
3. On perusal of the order passed by the Commissioner (Appeals) as also CESTAT, it is seen that the said authorities have not upheld the action of the assessee in availing 100% of the credit in the initial year but have held that by the time the appeal was heard the initial financial year being over in addition to the 50% credit of the initial year, the assessee became entitled to the remaining 50% of the credit available in the following financial year and thus the assessee was entitled to 100% credit on the date of the appellate order. It is not the case of the Revenue that the credit wrongly availed by the assessee has been utilised in the initial financial year. If the credit of the subsequent financial year wrongfully taken in the initial financial year if not utilised till the commencement of the subsequent financial year, then no prejudice is caused to the Revenue and the decision of the Tribunal deserves acceptance. By following the ratio laid-down by the Bombay High Court, as the facts are not clear in the impugned order, we set-aside the impugned order and remand the matter back on this issue to the adjudicating authority to decide the issue of utilisation of cenvat credit which was wrongly availed by the appellant in the first year. On this issue including the issues of interest and penalty, the Commissioner shall provide an opportunity of hearing to the appellant as per law. Ld. Counsel has assured that full cooperation will be extended to the adjudicating authority.
4. The next issue is pertaining to the credit amounting to Rs. 2,73,450/- availed on invoices not issued in the name of appellant. After hearing both sides and on perusal of the record, it appears that the invoices were inadvertently issued in the name of M/s India Cement which was the holding company of the appellant. The said mistake was not rectified by the appellant. However, ECC code and address of the appellant was mentioned on the invoices. Ld. Counsel submits that this is a procedural lapse. The Counsel of the appellant relied in the case of CCE vs. Chemplast Sanmar Ltd. 2007 (208) ELT 208 (Tri. Chennai); and also the ratio laid-down in the case of Larsen & Toubro Ltd. vs. Collector -1994 (72) ELT 948 (Tri.).
5. Considering the rival submissions and on perusal of the record, it appears that the issue needs fresh adjudication. Accordingly, we remand the matter back to the adjudicating authority to verify the ECC code and address and utilisation of the credit and use of the goods. These factual aspects are not emerging from the impugned order. Hence, we set-aside the impugned order and remand the matter to the adjudicating authority on this issue who will decide denovo after providing an opportunity of hearing to the appellant as per law.
6. The next issue is regarding credit amounting to Rs. 11,90,941/- which was not admissible to the appellant since the iron & steel items such as MS channel/ flat/ beams/ angles were not input or capital goods. The Commissioner has denied the benefit. From the record, it appears that the assessee has utilised these items in the manufacture of cage for PMCC (P), MCC, Panels, Grid Rotor Resistance etc. which are stated to be capital goods. The period is after 07.07.2009, when by introducing the amendment to the definition in Rule 2(k) of the Cenvat Credit Rules, 2004, the position has been changed and thereafter benefit is not admissible. During the course of arguments, ld. Counsel submits that the said explanation (amendment) is not applicable to the assessees case as his case is falling under Rule 2(a)(A)(iii) of the Cenvat Credit Rules (CCR), which relates to the component, spares and accessories of the goods specified at 2(a)(A) (i) and (ii) of the CCR.
6.1 After hearing the parties and on perusal of the record, it appears that the utilisation of the item in the factory is not clearly reflected in the impugned order. The position in the impugned order pertaining to the utilisation of the items is not clear; when it is so, we set-aside the impugned order and remand the matter to the adjudicating authority to decide the issue in denovo proceeding after providing an opportunity of hearing to the appellant.
7 The next issue pertains to the total cenvat credit amounting to Rs.3,95,10,036/-, out of which the adjudicating authority has already granted relief of Rs. 1,83,62,358/-. Thus, only dispute is regarding balance amount of Rs.2,11,47,678/-. The adjudicating authority has confirmed this demand on the ground that these items have been used for supporting structure or civil foundation.
7.1. During the course of arguments, ld. Counsel submits that in the instant case, the period is prior to 07.07.2009. O n the other hand, Ld. AR for the Revenue relied on the show cause notice as well as the impugned order passed by the lower authority. After hearing rival submissions of both sides it appears that the adjudicating authority has relied on the decision of the Larger Bench in the case of Vandana Global Ltd. vs. Commissioner -2010 (253) ELT 440 (Tri. LB,) where it was observed that the amendment is applicable retrospectively but the said decision of the Tribunal was set-aside by the Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd. vs. CCE&C 2015 (39) STR 726 (Guj.) where it was observed that-
8. Ld. Counsel for the Revenue has placed reliance on the decision of the Larger Bench of the Tribunal in Vandana Global Limited vs. Commissioner of Central Excise, Raipur -2010 (253) ELT 440. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 7.7.2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the Legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and / or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited vs. Union of India and Others, reported in (2011) 11 SCC 408 = 2011 (266) ELT 145 (SC) would nto be applicable to the facts of the instant case.
In the peculiar circumstances mentioned above, the issue regarding the admissibility of cenvat credit of Rs.2,11,47,678/-, we are of the view that it needs to be re-examined in the light of the decision of the Gujarat High Court (supra) as well as the charge made in the show cause notice.
8. The next issue of cenvat credit amounting to Rs. 22,70,019/- which was denied to the appellant by the adjudicating authority by referring to the definition of capital goods under Rule 2(a)(A)(i) and (ii) of CCR, ld. Counsel submits that credit is admissible on cement as input as the same has been used in the fabrication of capital goods like machinery, silos etc. Further, he submits that credit on cement has been availed only during the period prior to 07.07.2009.
8.1 On the other hand, ld. AR for the Revenue submits that the cement has been used for fabrication so it is neither input nor capital goods, hence, the cenvat credit is not available to the appellant.
8.2 After hearing rival submissions of both sides, it appears that the utilisation of subject goods is not clear, when it is so then we set-aside the impugned order and remand the matter on this issue also to the adjudicating authority. The adjudicating authority shall provide an opportunity of hearing to the appellant as per law.
9. Lastly, after hearing both the sides, we are of the view that the demand is not time barred as already discussed by the Commissioner (Appeals) in para 47.1 of the impugned order. The same is hereby sustained alongwith the reasons mentioned therein.
10. In view of the above, we set-aside the impugned order and remand the matter back to the adjudicating authority who shall decide the issues in denovo proceedings as mentioned above but by providing an opportunity of hearing to the appellant. In the result, the appeal is allowed by way of remand.
(Dictated and pronounced in the open Court).
(Justice (Dr.) Satish Chandra) President (Ashok K. Arya) Member (Technical) Pant