Custom, Excise & Service Tax Tribunal
M/S. K.N. Food Industries Pvt. Ltd vs Cce & Sts Kanpur on 22 August, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
Date of Hearing: 22.08.2014
E/3432/2012-EX[SM]
[Arising out of Order-in-Appeal No. 221/CE/APPL/KNP/2012 dated 31.07.2012 passed by the Commissioner Central Excise (Appeals), Kanpur]
For Approval & Signature :
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?
M/s. K.N. Food Industries Pvt. Ltd. Appellant
Vs.
CCE & STs Kanpur Respondent
Present for the Appellant : Shri Jatin Mahajan, Advocate Present for the Respondent : Shri Rakesh Puri, DR FINAL ORDER NO. 53257/2014 DATED: 22.08.2014 PER: R.K. Singh The appellants have filed this appeal against Order-in-Appeal No. 221/CE/APPL/KNP/2012 dated 31.07.2012 in terms of which, inter alia, Cenvat Credit of Rs. 8,46,525/- taken on the basis of endorsed Bills of Entry was disallowed to the appellants (although the same was earlier allowed by the original adjudicating authority). The Commissioner (Appeals) took the view that endorsed Bills of Entry are not valid documents for the purpose of availing the Cenvat Credit.
2. The Ld. Advocate has produced several judgments in their favour like the following:
(i) Sona Koyo Steerig Systems Ltd. Vs. CCE, Delhi-III. Gurgaon 2013 (296) ELT 481 (Tri.-Del.)
(ii) Marmagoa Steel Ltd. Vs. Union of India 2005 (192) ELT 82 (Bom.). (iii) Akzo Nobel Coatings (India ) Ltd. Vs. Commissioner Central Excise, Bangalore 2013 (290) ELT 108 (Tri.-Bang.) Regarding the suppression the ld. Advocate has contended that they had actually informed the department whenever credit on the basis of the endorsed Bills of entry was taken. Thus the charge of suppression of facts is not sustainable.
3. The Ld. AR has contended that only when the endorsement is by appellants corporate office, the endorsed Bills of Entry can be taken as valid documents as was also stated in Boards Circular dated 29.02.1996..
4. I have gone through the submissions of both sides. The Honble Bombay High Court in the case of Marmagoa Steel Ltd. Vs. Union of India (supra) on this issue held as under:
For availing the credit of duty, what is required to be established under Rule 57G is that the inputs received are in fact duty paid. The procedure set out in Rule 57G of the Central Excise Rules is to ensure that the credit is taken on the basis of duty paid documents. The bill of entry is one such documents set out in Rule 57G. The said rule does not require that the bill of entry should be in the name of the person claiming credit of duty. It is not in dispute that the goods imported and cleared on payment of duty by one person can be used as inputs and credit of duty can be claimed by another person by establishing that the imported duty paid goods have been received as inputs and that the importer has not taken credit of that duty. In the present case, it is established that the duty paid goods are receives as inputs, however, the credit is denied on the ground that the Bill of entry is not endorsed in the name of the appellant. Rule 57G does not require that for taking credit of duty, the bill of entry should be endorsed in the name of the claimant. Counsel for the revenue could point out any provision of law in the Act or the Rules regarding the endorsement of bills of entry. In the absence of any provision regarding endorsement on the bill of entry, the credit of duty cannot be denied on the ground that the bill of entry is not endorsed in the name of the claimant. As stated hereinabove, what is required to be established for taking credit of duty is that the goods used as inputs are duty paid and that the credit of duty paid on the said goods has not been taken. In the facts of the present case, the evidence on record i.e. the bills of entry together with the certificates issued by excise authorities at Surat and Goa, clearly show that the goods imported and cleared under the bills of entry on payment of duty were received and utilised by the appellant as inputs in its factory and that the importer has not utilised the credit of duty paid on the said goods. Thus, the appellant has established that the inputs received under the bills of entry were duty paid and, therefore, the authorities below were not justified in denying the credit of duty to the appellant. The two decisions relied upon by the Tribunal do not support the case of the revenue. In the case of Balmer Lawrie & Co. (supra), the issue was not relating to endorsement on the bills of entry and, therefore, the said decision is distinguishable on facts. Similarly, the decision of the Tribunal in the case of Tata Iron & Steel Co. Ltd. (supra) is also distinguishable on facts as the said decision is based on erroneous concession made by the Counsel for the appellant therein, that in the case of Balmer Lawrie & Co. it is held that the Modvat credit is not available on the basis of endorsed copies of bills of entry.
For all the aforesaid reasons, we are of the opinion that in the facts of the present case, the Tribunal was in error in holding that the credit of duty taken by the appellant was in contravention of Rule 57G. Accordingly, the question raised by the appellant is answered in the negative i.e. in favour of the appellant and against the Revenue.
The Honble Cestat in case of Akzo Noble Coating (India) Pvt. Ltd. (supra) has also held accordingly following the aforementioned judgment of Honble Bombay High Court. In view of these judicial precedents, the impugned Cenvat Credit can not be disallowed.
5. Further it is seen that the endorser M/s. Parle Products Pvt. Ltd. submitted to the department Bills of Entry wise declarations to the effect that all goods imported under the respective Bills of Entry have been transferred to M/s. K.N. Food Industries Pvt. Ltd. Further, receipt of goods by the appellants and their actual use in the manufacture of the final products (which the appellants manufactured on behalf of M/s. Parle Products Pvt. Ltd.) is not in question at all. In the wake of this, it is difficult to fathom as to how the appellants can be held guilty of suppression of facts. The Show Cause Notice was issued on 14.02.2011 while the impugned Bills of Entry are dated 17.09.2007, 19.06.2008 and 23.09.2008 and thus the impugned demand will also be hit by time bar presuming that the imposed credit was taken within a reasonable time of a few months from the dates of Bills of Entry (The date of taking impugned Cenvat credit is not mentioned in the Show Cause Notice or in the Order-in-Original and Order-in-Appeal.
5. In view of the foregoing, the appellants appeal is allowed and the impugned Order-in-Appeal is set aside to the extent that relates to this appeal.
[Dictated & Pronounced in the open court] (R.K. Singh) Technical Member Neha 1