Custom, Excise & Service Tax Tribunal
Heidelberg Cement India Ltd vs Commissioner Of Central Excise, ... on 21 November, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/28537/2013-SM [Arising out of Order-in-Appeal No. 481/2013 dated 13/09/2013 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Heidelberg Cement India Ltd. P.O. Ammasandra, Taluk Turuvekere, Tumkur 572 211 Karnataka Appellant(s) Versus Commissioner of Central Excise, Service Tax And Customs Bangalore-II PB 5400, CR Building, Queens Road, Bangalore - 560 001 Karnataka Respondent(s)
Appearance:
Shri L.S. Karthikeyan, Advocate World Trade Centre No.404-406, 4th Floor, South Wing Brigade Gateway Campus No.26/1, Dr. Rajkumar Road, Bangalore - 560 055 Karnataka For the Appellant Smt Ezhil Mathi, AR For the Respondent Date of Hearing: 21/11/2016 Date of Decision: 21/11/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21215 / 2016 Per: S.S GARG The present appeal is directed against the impugned order passed by the Commissioner (Appeals) vide order dated 13.09.2013 vide which the Commissioner (Appeals) has rejected the appeal of the appellant. Briefly the facts of the present case are that the appellants are engaged in the manufacture of Cement and Cement Clinker falling under Chapter Heading 25232940 & 25231000 of the Central Excise Tariff Act, 1985. They are availing the facility of cenvat credit under Cenvat Credit Rules 2004. During the course of audit of financial records of the assessee, the Accountant Generals Audit Party observed that the appellant made a provision for obsolescence of stock of stores and spares in the Books of Accounts for the years 2007 & 2008, that the provisions made at the end of December 2009 is Rs. 78,09,412/- (Rupees Seventy Eight Lakhs Nine Thousand Four Hundred and Twelve only) and the assessee have not paid the amount equivalent to credit availed in the said items; that the bifurcation of cenvatable and non-cenvatable items were not forthcoming from the assessee. Thereafter a show-cause notice dated 25.02.2011 was issued proposing to demand the cenvat credit of Rs. 12,49,506/- (Rupees Twelve Lakhs Forty Nine Thousand Five Hundred and Six only) attributable to the cenvat credit availed on value of inputs written off partially in the Books of Accounts for the year 2007-08. Appellant filed reply to the show-cause notice rebutting all the allegations. The Additional Commissioner vide his Order-in-Original dated 20.01.2012 rejected all the submissions made by the appellant and confirmed the demand along with interest and penalty. Aggrieved by the said order, the appellant filed an appeal before the Commissioner and the Commissioner (Appeals) vide his impugned order dated 13.09.2013 upheld the demand as confirmed by the Order-in-Original. Aggrieved by the said Order-in-Appeal, the present appeal has been filed.
2. Heard both the parties and perused the records.
3. The learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the legal provisions as well as documentary evidence produced by the appellant in support of his submissions. He further submitted that the provision of Rule 3(5B) of Cenvat Credit Rules is not attracted in the present case. He further submitted that the provisions relating to reversal of credit on the value of inputs written off fully was introduced for the first time in the Cenvat Credit Rules 2004 by way of insertion of Rule 3(5B) w.e.f. 11.05.2007. Further the provisions for reversal of credit for partial write off was also introduced subsequently vide amendment in Rule 3(5B) from 01.03.2011. He further submitted that the appellant has made the provisions to write off the input/capital goods, only in financial books and the input and capital goods are very much lying in the inventory at the time of provision and being used as and when required by the production team. He also submitted that the appellant has made provision to write off the value of inputs partially in their books of account for the obsolescence stock on store and spare parts in terms of the company policy. The company policy does not allow the appellant to make any provision to write off the obsolescence stock of store and spare parts fully. He further submitted that in the present case the appellant has made the provision to write off the input/capital goods partially and the period of dispute involved is prior to 01.03.2011, the amended provisions of Rule 3(5B) are not applicable. For this submission, the learned counsel relied upon the following authorities:
a) Circular No. 645/36/2002-CX dated 16.07.2002
b) CCE, Jamshedpur Vs. Tata Motors Ltd. 2008 (221) E.L.T. 545 (Tri.-Kolkata)
c) Sanghavi Engineering Vs. CCE, Hyderabad 2013 (297) E.L.T. 277 (Tri.-Bang.) 3.1. He further submitted that the inputs have been subsequently used in the manufacture and hence the appellants are entitled to take back the credit in terms of the provisions to Rule 3(5B). He further submitted that in reply to the show-cause notice the appellants have filed the policy of the company along with worksheets and other documents to prove that they have made partial provisions. But both the parties below have not examined the documentary evidence. The appellant has also produced these documents in the present appeal also. But in the impugned order, the learned Commissioner (Appeals) has observed that the appellants have not produced any documentary evidence to prove that the provision is made only for partial value of goods for write off. In view of this finding returned by the Commissioner, I am of the opinion that this case needs to be remanded back to the learned Commissioner with a direction to consider the documents and the worksheets and the policy of the company with regard to partial write off. Therefore I set aside the impugned order and remand the matter back to the learned Commissioner to decide the matter at de novo after considering the documentary evidence produced by the appellant. The learned Commissioner is directed to dispose of the case within a period of two months from the date of receipt of the certified copy of the order. Before disposing of the case, the learned Commissioner will afford an opportunity of hearing to the appellant and also an opportunity of producing any documents in support of his submission. With this the appeal is allowed by way of remand.
(Operative portion of the Order was pronounced in Open Court on 21/11/2016) (S.S GARG) JUDICIAL MEMBER iss