Custom, Excise & Service Tax Tribunal
C.C.E., Jaipur I vs M/S Supreme Cylinders Ltd on 14 January, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-III Date of hearing/decision:14.1.2010 Central Excise Appeal No.2312 of 2006-SM Arising out of the order in appeal No.90(MPM)CE/JPR-i/2006 dated 3.4.2006 passed by the Commissioner (Appeals I), Central Excise, Jaipur. Honble Shri M. Veeraiyan, 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? Yes 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? yes 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes C.C.E., Jaipur I Appellant Vs. M/s Supreme Cylinders Ltd. Respondents
Appearance:
Shri V.K. Saxena, Authorized Departmental Representative (Jt.CDR) for the Revenue and Shri Atul Gupta, Company Secretary for the respondents Coram: Honble Shri M. Veeraiyan, Member (Technical) Oral Order No.____________________ Per M. Veeraiyan:
This is an appeal by the Department against the order of Commissioner (Appeals) No. 90(MPM)CE/JPR-i/2006 dated 3.4.2006.
2. Heard both sides.
3. The respondent is a manufacturer of cylinders falling under Chapter Heading 73.11 of Central Excise Tariff Act, 1985. They supplied hot rolled MS sheets to M/s International Engineering and Manufacturing Pvt. Ltd. referred to as job worker and got foot rings and VS plates manufactured on job work basis. The respondent took Cenvat credit and removed the same to the job worker and received back the materials after completion of job work. On the ground that there were certain irregularities on the part of the job worker in not following the procedure prescribed under Rule 57F of Central Excise Rules, the duty was demanded which was paid by the job worker and said amount of duty was taken as credit by the respondent based on supplementary invoices issued by the job worker. The credit taken by the respondent of the duty paid by the job worker was directed to be reversed which was done under protest. Subsequently, they claimed refund which was denied by the original authority but allowed by the Commissioner (Appeals) vide his impugned order.
4. Learned Jt. CDR submits that the duty demand from the job worker was made invoking extended period of limitation. The order for demand of duty on the job worker stands upheld by the Commissioner (Appeals) and by the Tribunal as well. Therefore, by implication, the ingredients of fraud, misstatement is there on the part of the job worker and therefore, the duty paid by job worker could not have been taken as credit by the respondents.
5. Learned Company Secretary, supporting the order of the Commissioner (Appeals), submits that the demand of duty on the job worker has been confirmed but no penalty under Rule 173Q has been imposed. The order of the original authority relating to the job worker clearly records that the offences have been committed due to ignorance. Under these circumstances, the credit of duty paid by the job worker has been rightly taken by the respondent and therefore, he seeks upholding the order of the Commissioner (Appeals).
6. I have carefully considered the submissions from both sides. The Commissioner (Appeals) has held that Rule 9(1)(b) of Cenvat Credit Rules, 2004 is not applicable and that the respondents are eligible to take credit of duty paid by the job worker with the following findings:
I also find that, penalty under erstwhile Rule 173Q had not been imposed, in the paraa 13 of the said order in original. The Adjudicating Authority of the said order in original has found that , there is no allegation in the show cause notice that goods manufactured by the party were even attempted to be cleared for anyother channel. However, an offence has been committed due to ignorance, I consider that a token penalty should be imposed upon the party to justify the act committed by them. In view of these findings, I find that the Adjudicating Authority of the said order in original had found that the offence had been committed due to ignorance , in view of this, I find that , the findings of the Adjudicating Authority are contrary to the said order in original.
7. The grounds of appeal do not dispute the factual findings that the demand of duty on the job worker has been made after holding that non-payment was due to ignorance on the part of job worker. Though the duty has been demanded by invoking the extended period of limitation it is noticed that there is a clear finding by the original authority in charge of the job worker that non-payment was due to ignorance, therefore, the question of invoking bar under Rule 9(1)(b) does not arise. The said Rule which provides for credit based on supplementary invoice bars passing of credit when duty became payable on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Excise Act.. or the rules made there under with intent to evade payment of duty. Whether supplying unit has resorted to fraud, collusion or any wilful misstatement has to be determined by the jurisdictional authority in charge of the supplying unit. Undisputedly, the authorities in respect of job workers unit in this case have held that the non-payment was due to ignorance. Under these circumstances, the question of invoking the exception provided under Rule 9(1)(b) does not arise. Therefore, there are no valid grounds adduced to interfere with the order of the Commissioner (Appeals).
8. The appeal is, therefore, rejected.
(M. Veeraiyan) Member (Technical) scd/ 4