Commissioner Of Central Excise vs M/S Tata Advanced Materials Ltd on 11 April, 2011

[Cites 1, Cited by 11]

Karnataka High Court

Commissioner Of Central Excise vs M/S Tata Advanced Materials Ltd on 11 April, 2011

Bench: N.Kumar, Ravi Malimath

EN THE §~i:c:3%»é Csum" Q? §<ARE'€AT£xE<A AT BM~é_:3¥fé§L'C::§:':L:f;-«:  A.

BAKED THEE THE 13?" DAY <3§Apm__. ~2--3.':'j:~.V  
?RESENT    'n' >"#h
THE H{}E\§'BLE MR. Ji3S_TICé'-$?~;:'é<ZL}P~*i;ﬁ.é--"..V  " V
ANE3 ~._ ' "  "

THE HQNBLE Mr-cf; '2.:JsT;:iﬁ'E"s'-<:£a'«,i"M«AL1MA*§"H"
CEA.NO.33_j)F{_»2:OU9jj AA - 

BETWEfE;§_.Im.'_--. % V 

The Commiésiasnef"0f'{'.3{ér*:t:§*§.l 'Excise,
Bangalore E C{>:'{}m§:Ss:s§or:er€ite,
P,§5i\1<1{.S4OQ, Queeaws Rﬁjadg

 Basj%ga:"ere~.- aw 00:'; """  WAPPELLANT

  S§"'E  ﬁeeraigi, Advocate)

-AND?

 V' ;M;f?s'~??.aia iaévazéceé Materiaig Ltd,,
 E's3§;«1,jG_g}'}Egané I§"Bd{§Stf"§a§ Area,
 -ff.--}ég'-am Anekai Taiuk
'"-,§ ag_sr%gaE@re - 562 $496: ..RES?§E'éSE?\£T



{By Sréﬁaghoramen 8: Sréecoytoanye, Advocates)

>§<>%<>§<

This CEA fiied under Section 356 of the '€'T;V&VVE"E:tﬁ£"i';V€"V~,z'

Excise Act, 1944 arigiog out of order dated 20/'ii/f.§:'Ge.C8"'«V
passed in Fmai Order No. 1294/2008, prayingﬁto 
the substaotiai question of Eaw stated therein, seieséjdee "the 
order passed in the CESTAT, South Zone BeoCh;"~8ﬂ'angaIo.re  
in Final Order ¥\Io,o1294/2008 dated:"20/1112-808 in" egppeai 

No, E/346/2008,

This CEA coming  l5"ea__ringA1V-.:t:h'$§§""""dey,
NKUMAR 3., delivered thefoHowir1~g»:'- _ '~  

  e 

ThEvsd'avp._o'e;_d .iéii;:.:by 't.Fje..dre've~nde'% chailenging the order
passed 153/  that the assessee is not

iiable to reoeraéevvt:oe__ax'.a'tio;§ent of cem/at credit in support

 of the'3'goeAo$VV%_desifoye_d.«for which he claimed compensation

V.V'--f:"o.ro" me" v1;i':'et;J'r<a:"rus:e Com do ny.

 f'f.Iff_Eje.i:'eésessee purchased the eapitai goods in

 the 3é'eerv--._i§§>§ and paid the excise duty, The said caoitai

"""'.""2g§ooc€s; were used in menufecioréeg of excésebée goods"

E,/'

2&2,



Therefore, the asseseee evaiﬁee tee cem/'at eredét and

utiiised the same at the time of ciearirzg the exeﬁigeble

goods manufactured in his faetery. Tee said capi.ta.J§'_;g'e'e%j¢;' 

were eestmyed in a fire accident onM__2';§-%QS:;_T.2{3 03§wt

Thereafter, the assessee emrchesedghee\§§ CeVe'§«§eEi"ge_e::%.§»;.§iiieT_ 

Invoice Ne.3§3 dated 2?'.11.2;.QQ43. 4{2:tﬁ 't~hai: b§;.'5§.e5" %"':eV"§3{3"€e 'V

forth a cfaim before the ' '§»:.§.$furance'~._Ceﬁ1pe;2y fer
reimbursement in terms;__<)'ﬁ_the_'Enst;1renrgévpoiicy fai{en. The
Insurance Cemparay re§_rf{a"ea_;r:§ed: E-ﬁe."-».fanj.eunt {:0 the

assessee, whis:h"'§eCE:Jd3ed3itﬁe""e}{e.is~e_._..¥3uty, which the

assessee had .peV::;"V-"er:_fE%e&'~c_api¥;aE goods. On coming to

know of th7<~:,__5ar3f:e';' the  Department calied upon the

 assess§{eee'i"0 reikersée the cenvat credit. When the same

"=__Vwa:e..noii_ eee.e;'*~-.tbey raised a demand for payment at' the

seie---._arﬁeVé'3je_i:,','"V The assessee preferred en eppeat

-V c;haiEie%e;g:"f1ag {He saie demand, which came to be dismésaed

 ':j%3\,? 'tee Cemmissienee of Aepeaie. Against the said order,

 'ereferree an eepeei ':0 the Trébene§, fee "§'"rébueaé



heie that me eeseeeee had Eegaiiy evexied tee cemzet ereee

and further used the same fer payment of due; en the féneﬁ

predusztzte, When the game were destroyed, :he;r,§.,:e'r~;e

eempensated by the Eneeranee Comeany 

excise duty. "?here is me iegai pr0g;é5.ie_n :.:r}eI'e2"" "E><<:iAse.e,4 "

Act, 1944 empowering the Excise'»Au:;m§¥e:'e»s'

the cerwet credit er to put f<;>-rfdw 'tjhvei'r V<jeTi*r,:1:"a3a*f;{§._.._VVVVV '§3'heM

contention of the revenge thatV_:ﬁie'vves3Vsuessee'- efidoubte
benefit has no substar'€<:e..a'5_ tihe  by the Excise
Authorities is without an,y"i;as§['i"s Vand,_fi{e_refe,~fe., he set aside

the order paseed.*'e3['vth'eve._§)r.i_gi--net Authority as weli as the

Appeilate A--::_tr*uQrif3:_e"."id the relief to the assessee.

 Aggri.e§ed. by tﬁ'e._seme,: the revenue is in appeai.

-V partiéee,   2;

' '"_"_v»We§,'ﬁeve heard the learned Ceunsei fer the



4. The agpeai was admitieé is <;ei'*1sié§:f i»~'%;'l§"ii<:=*,V_

feéiowing siibstaritia! cguegtiang of iaw:

1.

Wiieiher an assessee can <:1:;§jri'i (::EE\;3.\f!ff§~§;:::.{:rxé{.§:it''A§§} '' 'V respect sf an input whichV'».Qti2ew$'isé.§e'V':-::i:'c7i'-thezgié ﬁg' manufacturing of the:'iV_c>:is.V:put"'-0?' an aéséijsséega _:%3n which he 33 iigbie we the Diesent case t:h'exV:"g0o'«rihsiiiiji of which the assessegwgs C§:£Ti'i'Fi':..i-fig ii, had in fact, the assessee, equivalent value of the goods from the insurance company? * ,Whei:_h_er ihe._%1qiEnipugneVd'~.._§ia9der: of the Tribunal ameuhigs. i::<:i«..e:Vr1c:)'u~;r.a§_,j1"i'§r'i.r_'; unjust enrichment in the iii:-»:mds Q5 afi.--.a's$7e§3_ae'~i§$J'E*ie ciaims CENVAT credit ir'i7'ir_espVec:t 0fx§i::;o"t|é wiiich has not in fact gone into jti':e.;:"%*:éiV.s'*;:,ifa~tt;;ring activity of the assessee? is Q

5. Tee Sepreme Ceim: in the case ef the Ce.iiee§e;f_ of Centre! Excise, Paine 2/5. Dai {chi Kerea-i?§ka"i~~V_';-{ﬁe repaired in 2999 (222) 5.1.7: 353 (3,e_.,> air'pi'a%§;:i,iiﬁigeie '* as amder:-

".2 ,7. it is: deer free?--!:i7ese"Riiies, Tee read them, that a manuf.éveiiiirerVobi9ain§erecii; for the excise duty? gzzeicf ifr1a_teri'ai'fé> be used by him in the ',e7redL1e,i§ii2;'7 'excisab/e product imiiz-ediateiy" * if requisite deciaratieiii Oﬁ5*f?3I€.':?§V.x er?" et:i%he--vriedgement thereof? Vcredit at any time triijeié arriai:ii*ig payment of exii;,fise._ 0ii.Vj:£*i7e"e§:<Tcisabie product. There is ire ;5rQ1?i.r3ioi3'~.ii'i which provides for :3 rfﬁferseéi' the.'-credit""by the excise authorities where «:'€...h.as been illegally or irreguiariy A -iifz"'~:ri.i,f"zi<:f2 event if: stands Cenceiied or, if V_ '«.i'__;ifiiiefe:--a:2f;_ i%.;ge:"te be paid for. We are here reaiiy A...44eencerr§edV' witiz credit that has been validly iekeige, V and 5&5 benefit is aveilebie to the " "---{'i?ai?fU2€6C{'£.!f€!' without? eriy {imitation in time or V' efherwise iirziese the manufacturer iégeif cheeses nest ée wee the raw materia! in its ...7m excisaeie product. The credit is, z"f?erefere_,..VV_f..4_ e~.._ indefeasibfe. It shouid arise be noted their E/_7;ez*e ' "

is no c:o--reiet:'or: of the raw materiaf end._%f7ej_~.. ' % ﬁne! product; that is to say, :'tvis"n»etées' z'f ;:re«;:a» 4' can be taken only an e ﬁne!-«_;Dr<§':3';}{:'t eet?f}a'~£":'\i:: :"*~.. manufactured out of Size ;5e_rti::u1erWe-;jeVi}g«f. mete/fa! ﬁe which the cred§t"~.!s re/eted.ef'.= Credit may be take.::zaga:'{2ese fffre 'exeise éfuiy of:

e ﬁnei product mei;a;%e.:'tz::"e§g':V5¥.%;.'j€*f;§ee very day that it becomes avaifabfe, > _

6., Thervefeire, itifs c:¥e§.ar'ti*{e:ti_"t.h_e_fje is no prevision in the r:,;'VieWs'VT'vv'ehii:fE} §§::?fQ7vieie$:"for e'"'r"ie \V;ersai of the credit by the Excise«Au--thV0rEt%ie.E§j~eS{'ceVpt.iwhere it has been irregularly taken if} _VwhEeh" e_£Ien1:'.=it Astahifis canceiied or if utiiised has to be for. "This 'E$'"'r'1'<'>tV the Case of the revenue. in the "é';a_'ei:e:'it' 'x»1h'en the asssessee purchaeed the capital g0e€i:3 :a:";cj. he has paéd the excise duty en them, in "»~<.__ §'ewf he"ieV__entit!ed te get the credit on the duty paid whiie the fiﬁiehee ereeucte feem hie feeiory, .?%eeerdéng§y, he etiiésed the eenvat credi: and eieered the E as /' ;./ finished products. it ie abeet three years after each eaymeet, the cepitei goods were destroyed in fire. A3-'--t_§2e aseeesee tree irieeted the said eapitei geede, he 99.? eiaim fer eayment of the less. sustained by H mciudee the payment of excise ::iijt~;k';u«_T'he_;«'§e':e%e'ne'e Cempany in terms of the peiicy ti'ae"_<_:Aem;5eV;§eeteé"

asseesee. Mereiy because the'i--v..;ffi-sguretiee. the assessee the vaiueV<;if.__goodiS""inVe'it:«.:i'ing the"e><ei"Vsie duty paid, that weuid not rentie-r the'u:'ai;a__i.E:fi*;£é'g<it" 'ef the cenvat credit wrong er. ie*t_e'guia§t. time, it does not confer Department to demand reversal ofeifedit Verj .t3efa:L}'i't.4te pay the said amount. The asseseee has exfaidgithe premium and Covered the risk of "=__tt§i:e«.eepEVte§_ee'e.de and when the geede were destroyed in t'et<i'i*és.V.ef"tti"e»--_in;e'i;i"tance peiicy, the insurance Cemeany has

-Ve0me4erjs'e:te:i'".Vthe asseesee. It ie not a Case of deebie ':';:1a"yii'eeritv'3es cerstendee by the department. At any rate, "Exfeise Beeettment tzee i"i€) gay in tee instant case ee V /=' heié by tine Apex Caurt, in that véew sf the matter; the subgtantiai questions ef iaw frameﬁ En this appeai amswered in favour 0f the assesses and»AA»Va gaEns;€"€hfe;»v ' revenue, Accordingiyf {ﬁe appeai is dismigsézd. .5 Em ¢ Q} W3 M? % $3 W V Prs*

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Karnataka High Court

Commissioner Of Central Excise vs M/S Tata Advanced Materials Ltd on 11 April, 2011

Bench: N.Kumar, Ravi Malimath