Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, Trichy vs M/S. Bhel on 9 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/170/2010
(Arising out of Order-in-Appeal No. 166/2009 dated 21.12.2009 passed by the Commissioner of Central Excise (Appeals), Trichy)
Commissioner of Central Excise, Trichy Appellant
Vs.
M/s. BHEL Respondent
E/428/2010 and E/544/2010 (Arising out of Order-in-Original No. 2/2010 (C.Ex.) dated 28.4.2010 and Order-in-Original No. 8/2010 (C.Ex.) dated 22.7.2010 both passed by the Commissioner of Central Excise, Trichy) M/s. BHEL Appellant Vs. Commissioner of Central Excise, Trichy Respondent Appearance Ms. Cynduja Crishnan, Advocate for the Appellant Shri A. Cletus, Addl. Commissioner (AR) for the Revenue CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision: 09.01.2018 Final Order Nos. 40085-40087 / 2018 Per Bench All the above appeals involve a common issue and hence they are taken up together for hearing and are disposed by this common order. For sake of convenience, the parties herein are referred to as assessee and department.
2. The assessee M/s. BHEL are manufacturers of boilers. They had two units namely M/s. BHEL (HPBP) engaged in manufacture of boilers and M/s. BHEL (SSTP) engaged in manufacture of Seamless Steel Tubes (SS Tubes). In the month of July 2007, both these units merged. Prior to the merger, the SS Tubes were cleared to the boiler unit on which credit was availed. After merger, the assessee did not pay duty on SS Tubes and SFW Tubes as these were used for captive consumption and was covered by the exemption Notification No. 67/95 dated 16.3.95. The final products were removed by the assessee without payment of duty availing the whole exemption under Notification No. 6/2006-CE dated 1.3.2006, in terms of entry at Sl. No. 90 of the Notification. As per the said entry of the Notification, all goods supplied against International Competitive Bidding are exempted from the whole of central excise duty leviable thereon. As per the proviso to Notification No. 67/95, the exemption to inputs, captively consumed would not be available where the final products are exempted from the whole of duty or chargeable to nil rate of duty, except for the six types of clearances specified in the proviso. It thus appeared to the department that the assessee is not eligible for exemption under Notification No. 67/95, since the final products are cleared without payment of duty. A show cause notice was issued raising the above allegations and proposing to recover the duty, interest and for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalty. On appeal, the Commissioner (Appeals) set aside the same. Aggrieved, the department has filed Appeal No. E/170/2010. For the subsequent period i.e. from April 2008 to Mach 2009 and from April 2009 to March 2010, show cause notices were adjudicated by the Commissioner who confirmed the demand, interest and also imposed penalty. Aggrieved, the appellants have filed Appeal Nos. E/428/2010 and E/544/2010.
3. On behalf of the assessee, ld. counsel Ms. Cynduja Crishnan submitted that the issue stands covered by the decision in the case of M/s. Areva T & D India Ltd. Vs. Commissioner of Central Excise, LTU, Chennai reported in 2017-VIL-983-CESTAT-CHE.
4. Against this, the ld. AR Shri A. Cletus reiterated the grounds of appeal filed by the department. He submitted that the facts in the present case differ from that of the decision in Areva T & D India Ltd. cited supra. That here there is a merger of the two units and therefore the exemption under Notification No. 67/95 is not available to the assessee.
5. Heard both sides.
6. The issue is whether the assessee is eligible for exemption under Notification No. 67/95 for captive consumption of inputs when the final products are cleared availing exemption of Notification No. 6/2006. The issue stands covered by the decision in the case of Area T & D India Ltd. cited supra and the facts are identical. Applying the decision, we are of the view that the demand is unsustainable. The impugned orders in Appeal No. E/428/2010 and E/544/2010 are set aside and the appeals filed by the assessee are allowed with consequential relief if any. The appeal filed by the department E/170/2010 is without merit and the same is dismissed.
(Operative portion of the order was
pronounced in open court)
(Madhu Mohan Damodhar) (Sulekha Beevi C.S.)
Member (Technical) Member (Judicial)
Rex
2