Custom, Excise & Service Tax Tribunal
Cm Enviro Systems Pvt Ltd vs Commissioner Of Central Excise ... on 13 June, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20322/2015-SM [Arising out of Order-in-Appeal No. 643-2014-CE dated 30/10/2014 passed by Commissioner of Service Tax , (Appeals) BANGALORE-I] Cm Enviro Systems Pvt Ltd Unit-ii No.18&19, Ist Main Road, 1st Cross Road, Kiadb Industrial Estate, Dabaspet, Bangalore BANGALORE - 562111 KARNATAKA Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax Bangalore-i POST BOX NO 5400...CR BUILDINGS, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Mr. Rajesh Kumar T.A. C.A. HIRAGANGE & ASSOCIATES #1010, 1st floor(Above Corp.Bank) 26th Main, 4th T Block, Jayanagar, BANGALORE - 560041 KARNATAKA For the Appellant Mr. Naveen Kushalappa, A.R. For the Respondent Date of Hearing: 07/06/2017 Date of Decision: 13/06/2017 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 20918/ 2017 Per : S.S GARG The present appeal is directed against the impugned order dated 30.10.2014 passed by Commissioner (Appeals) whereby the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the order-in-original.
2. Briefly the facts of the present case are that the appellants are engaged in the manufacture of environmental simulation systems under Chapter 84 & 85 of the CETA 1985 and are availing the Cenvat credit on input services and capital goods. During the course of audit verification of the record of the appellant, it was found that the appellants are availing Cenvat credit on inputs/capital goods and services and the credit taken are utilized towards payment of duty liability on their finished goods. The appellants are also clearing the goods without payment of duty under Notification No. 10/1997 dated 01.03.1997 and it was found that the appellants are not maintaining separate accounts of receipts, consumptions and inventory of inputs and input services for manufacture of dutiable and exempted goods as per Rule 6(2) of the Cenvat Credit Rules 2004. Further the appellant did not reverse the amount equal to 10% of the value of the exempted goods under Rule 6(3)(b) of the Cenvat Credit Rules 2004. On these allegations, a show-cause notice dated 08.03.2011 demanding an amount of Rs 8,82,565/- under proviso to Section 11A of the Central Excise Act read with Rule 14 of the Cenvat Credit Rules 2004 along with interest and penalty was issued. After following the due process of law, the Original Authority confirmed the demand by order-in-original dated 30.11.2011. Aggrieved by the said order, appellant filed appeal before the Commissioner who rejected the appeal of the appellant.
3. Heard both the parties and perused the material on record. Learned Consultant for the appellant submitted that the impugned order is not sustainable in law as the same has been passed by misinterpreting the provisions contained in rule 6 of the Cenvat Credit Rules 2004. He further submitted that the impugned order is contrary to the binding judicial precedents. He further submitted that the appellants have reversed the credit attributable to clearance made under Notification 10/97 along with interest and therefore demanding of the amount of exempted turnover is not correct. He further submitted that the option under Rule 6 of the CCR 2004 is to be opted by the assessee and not by the department. In support of his submission, he relied upon the decision in the case of Mercedes Benz India (P) Ltd Vs CCE Pune [2015(40)STR 381(Tri-Mum)] and Rice Food Products [2009(247)ELT 391]. He further submitted that the appellant had maintained separate records for inputs and had not availed the credit on inputs which are used for manufacture of goods cleared under 10/97. He also submitted that with regard to input services, appellant had not maintained separate records and paid the amount attributable to credit of input services pertaining to exempted goods. However, by oversight they had not paid an amount of Rs 28,500/- and Rs 18,898/-. Further they paid the same amount without considering the excess amount paid during November 2008. He further submitted that appellant has reversed the credit along with interest @24% and not 13% and the appellant has also enclosed November 2008 return where it is clearly disclosed that the credit is reversed towards Notification 10/97. After considering the submissions of both the parties and perusal of the material on record and the judgements cited by the appellant, I find that the appellants have already reversed the credit attributable to clearances made under 10/97 along with interest and by relying upon the decision of Mercedes Benz India (P) Ltd cited (supra), I am of the view that the impugned order demanding 10% of the amount of exempted turnover is not legally sustainable and therefore I set aside the impugned order by allowing the appeal of the appellant with consequential relief if any.
(Order was pronounced in Open Court on 13/06/2017) S.S GARG JUDICIAL MEMBER pnr 3