Custom, Excise & Service Tax Tribunal
M/S Dhanuka Agritech Ltd vs C.C.E., Delhi-Iii on 7 October, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. II APPEAL NO. E/2617/2012 [Arising out of Order-in-Appeal No. 183/BK/GGN/2012 dated 27.04.2012 passed by the Commissioner of Central Excise (Appeals), Delhi-III.] Date of hearing: 13.06.2016 Date of decision: 07.10.2016 For approval and signature: Honble Mr. Devender Singh, Member (Technical) =======================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
=======================================================
M/s Dhanuka Agritech Ltd.
:
Appellant
VS
C.C.E., Delhi-III
:
Respondent
Appearance:
Ms. Krati Somani, Advocate for the Appellant
Shri R. K. Sharma, A.R. for the Respondent
CORAM:
Honble Mr. Devender Singh, Member (Technical)
FINAL ORDER NO. 61509/2016
Per : Devender Singh
This appeal has been filed against the Order-in-Appeal No. 183/BK/GGN/2012 dated 27.04.2012 passed by the Commissioner of Central Excise (Appeals), Delhi-III.
2. Brief facts of the case are that the appellants are engaged in the manufacture of pesticides, herbicides, fungicides and insecticides. There was a fire accident in the appellants factory on in which raw material as well as inputs in process were burnt. The appellants reversed the cenvat credit amounting to Rs. 42,63,456/- in respect of raw material as well as work in process on 24.09.2009. Subsequently, they realized that they had inadvertently reversed the amount of Rs. 10,57,595/- pertaining to inputs contained in work in process on the manufacturing line at the time of breakout of fire in the factory. The refund claim filed by them was rejected by the original adjudicating authority on the ground that the refund claim application does not get covered under any provision of Section 11B of Central Excise Act, 1944. It was also rejected on merits on the ground that the party had not produced any evidence that the burnt goods had been put back to use in the manufacturing process and the grounds on which the insurance authorities denied their claim has not been submitted by the party, nor did they submit any test report and other relevant documents.
3. Heard the parties and perused the records.
4. Ld. Advocate for the appellants submitted that the appellants were not required to reverse the cenvat credit on inputs in process, which was destroyed in fire. She stated that the law on this issue was well settled as per the following judgments:
- CCE vs. Fenner India Ltd. [2014 (307) ELT 516 (Mad.)]
- Themis Medicare Ltd. vs. CCE [2014 (303) ELT 141 (Tri.-Ahmd.)]
- Hetoro Labs Ltd. vs. CCE [2015-TIOL-1849-CESTAT-Bang.]
- Sreepathi Pharmaceuticals vs. CCE [2015-TIOL-1823-CESTAT-Bang.]
- CCE vs. Cadbury India Ltd. [2015-TIOL-1407-CESTAT-Del.] She further argued that the lower authorities were not justified in rejecting the claim under Section 11B as the Larger Bench of the Honble Tribunal in the case of BDH Industries Ltd. vs. CCE 2008 (229) ELT 364 (Tri.-LB) had held that all types of refund have to be filed under Section 11B of the Act. She also referred to the case of Automotive Metal Stampings Pvt. Ltd. vs. CCE 2011-TIOL-731-CESTAT-Mum., where the Tribunal has held as under:
In view of the view taken by the Larger Bench in BDH Industries Ltd case, the reasoning for reversal of Cenvat Credit is not relevant. The re-credit has to be taken by filing refund claim only.
5. Ld. A.R., on the other hand, reiterated the findings in the Order-in-Original and stated that the refund in respect of the goods in question does not fall in any of the categories under Explanation A to sub-section 5 of Section 11B of the Central Excise Act. Further, the party had debited the duty since the goods were burnt. As no evidence of the same having put these burnt goods back into the manufacturing process has been given the refund of central excise duty is out of question. Further, necessary documentation of non-settlement of insurance claim had not been submitted and the facts have not been established.
6. I find that in this case, the party had inadvertently reversed the cenvat credit in respect of inputs used in work in process alongwith the credit in respect of raw material in store at the time of fire accident. Later on, they realized their mistake that credit on inputs contained in the work in process was incorrect and applied for refund. The first contention of the revenue that the refund cannot be entertained under Section 11B is not correct as the Larger Bench of Honble Tribunal in case of BDH Industries Ltd. vs. CCE (supra) has held that all types of refund will be governed by Section 11B of the Act. The same position particularly in respect of re-credit of cenvat credit has been reiterated in the case of Automotive Metal Stampings Pvt. Ltd. (supra). The second issue whether the appellant was required to reverse the cenvat credit on inputs in process which was destroyed in fire is also no longer res-integra and it has been held in following decisions that the credit on inputs in process need not be reversed.
- CCE vs. Fenner India Ltd. (supra)
- Themis Medicare Ltd. vs. CCE (supra)
- Hetoro Labs Ltd. vs. CCE (supra)
- Sreepathi Pharmaceuticals vs. CCE (supra)
- CCE vs. Cadbury India Ltd. (supra)
7. In view of the settled position on the above issues, the order of the Commissioner (Appeals) is set aside and the appeal is allowed.
(Order pronounced in the court on 07.10.2016) Devender Singh Member (Technical) RAS 5 E/2617/2012 - CHD