Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Balrampur Chini Mills Ltd on 3 July, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Excise Appeal No. 2549-2552 of 2010-EX[SM]
With E/CO/209 & 208/2010
Excise Appeal No. 2591-2592 of 2010-EX[SM]
For approval and signature:
Honble Ms. Archana Wadhwa, Member (Judicial)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
Excise Appeal No. 2549 of 2010-EX[SM]
[Arising out of Order-In-Appeal No 142-143-CE/ALLD/2010 dated 30.04.2010 passed by Commissioner of Customs & Central Excise (Appeals), Allahabad]
Commissioner of Central Excise. Appellant
Allahabad
Vs.
M/s. Balrampur Chini Mills Ltd., Respondent
Excise Appeal No. 2550 of 2010-EX[SM] With Cross/209/2011 [Arising out of Order-In-Appeal No 138-139-CE/ALLD/2010 dated 30.04.2010 passed by Commissioner of Customs & Central Excise (Appeals), Allahabad] Commissioner of Central Excise. Appellant Allahabad Vs. M/s. Balrampur Chini Mills Ltd., Respondent Excise Appeal No. 2551 of 2010-EX[SM] With Cross/208/2011 [Arising out of Order-In-Appeal No 136-137-CE/ALLD/2010 dated 30.04.2010 passed by Commissioner of Customs & Central Excise (Appeals), Allahabad] Commissioner of Central Excise. Appellant Allahabad Vs. M/s. Balrampur Chini Mills Ltd., Respondent Excise Appeal No. 2552 of 2010-EX[SM] [Arising out of Order-In-Appeal No 133-CE/ALLD/2010 dated 29.04.2010 passed by Commissioner of Customs & Central Excise (Appeals), Allahabad] Commissioner of Central Excise. Appellant Allahabad Vs. M/s. Jaypee Cement Blending Unit Respondent Excise Appeal No. 2591 of 2010-EX[SM] [Arising out of Order-In-Appeal No 136-137-CE/ALLD/2010 dated 30.04.2010 passed by Commissioner of Customs & Central Excise (Appeals), Allahabad] M/s. Balrampur Chini Mills Ltd. Appellant Vs. Commissioner of Central Excise. Respondent Allahabad Excise Appeal No. 2592 of 2010-EX[SM] [Arising out of Order-In-Appeal No 138-139-CE/ALLD/2010 dated 30.04.2010 passed by Commissioner of Customs & Central Excise (Appeals), Allahabad] M/s. Balrampur Chini Mills Ltd. Appellant Vs. Commissioner of Central Excise. Respondent Allahabad Appearance:
Shri Narender Verma, Shri Hemant Bajaj & Shri Mayank Garg, Advocates for the Appellant Shri A.K. Jain, AR for the Respondent CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Date of Hearing /Decision: 3.07.2013 ORDER NO . FO/ 56899-56904 /2013-SM(Br) Per Ms. Archana Wadhwa:
All the appeals, some filed by the Revenue and some filed by the assessee are being disposed of by a common order as an identical issue is involved. I find that in appeal No. 2549/2010, the dispute relates to interest on the wrongly availed credit of Rs.5,557/-. Admittedly, the interest on the said amount is going to be much less than the principal amount. As such, I find no justifiable reason for the Revenue to file the appeal against the amount which is much less Rs.5,000/-. However, Keeping in view that the issue involved is important and the identical issue is involved in other appeals, I proceed to decide the same on merits.
2. The appellants are engaged in manufacture of sugar and were availing the benefit of Cenvat credit of duty paid on various inputs as also on capital goods. However, while availing the Cenvat credit in respect of capital goods, it seems that they availed the credit in respect of those items which according to the Revenue were not capital goods,. The said fact was pointed out by the audit and the appellant accepted the same and reversed the excess availed credit.
3. The dispute relates to as to whether such excess availed credit which was reversed by the assessee, even before utilization, would attract interest and penalty or not. Commissioner (Appeals) vide his impugned order has held that since the assessee reversed the credit before utilization, and the same remains only as a book entry, no interest would be leviable. However, he imposed penalties upon the assessee for availing inadmissible credit. The said order of Commissioner (Appeals) stand appealed against by the Revenue as also by the assessee.
4. After hearing both sides, duly represented by Shri Narender Verma, Shri Hemant Bajaj and Shri Mayank Garg appearing for the assessees and Shri A.K. Jain, AR appearing for the Revenue, I find that the issue of interest on unutilized reverse credit entry was the subject matter of Honble Supreme Court decision in the case of Union of India vs. Ind-Swift Laboratories Ltd. reported as [2011 (265) ELT 3(SC)] laying down that the interest would be leviable from the date of wrong availment of credit. The said decision was considered by Honble Karnataka High Court in the case of Commissioner of Central Excise & Service Tax Bangalore vs. Bill Forge Pvt. Ltd. [2012 (26) STR 204 (Kar)] as also in the subsequent decision in the case of CCE, Bangalore vs. Pearl Insulation Ltd. [2012 (281) ELT 192 (Kar)] and it was held that said Supreme Court decision relate to taking of credit or utilizing the same wrongly and cannot apply to availment of Cenvat credit in the account books. The entire case law was considered by the Tribunal in the case of CCE, Raipur vs. M/s. Sharda Energy and Minerals Ltd. vide its Final Order No. 55193/2013 dated 10.1.2013, it was held as under:-
8. Learned Advocate appearing for the respondent draws my attention to a latest decision of the Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise and ST Bangalore V/s Bill Forge Pvt. Ltd. 2012 (26) S.T.R. 204 (Kar.). The Supreme Court decision in the case of Ind-Swift Laboratories Ltd. was considered and it was held, that the interest would be payable from the date Cenvat credit is taken or utilized wrongly. By following the said decision of the Hon'ble Supreme Court, the Hon'ble Karnataka High Court, in an identical set of facts held that the assessee had not taken or utilized the Credit but only availed wrong credit in their account books and on pointing out the mistake, immediately reversed the entry. As no benefit of wrong entry in account books was taken, interest is not payable. The said order of the Karnataka High Court stand subsequently followed by them in the case of Commissioner of Central Excise, Bangalore V/s Pearl Insulation Ltd 2012 (281) E.L.T. 192 (Kar.).
9. In as much as issue stands decided, by Karnataka High Court by interpreting Supreme Court decision in Ind-Swift and the facts are not in dispute, I find no merits in the revenues appeal. The same is accordingly rejected. In view of the above, I find no infirmity in the order of the Commissioner (Appeals) while setting aside the interest confirmation. Revenues appeals are accordingly rejected.
5. As regards the assessees appeal against imposition of penalty, the contention of the learned advocate is that once they reversed the credit, it amounts to as if it was never taken. For the above proposal, he relies upon the Honble Supreme Court decision in the case of Commissioner of Central Excise, vs. Bombay Dyeing and Mfg. Co. Ltd. reported as [2007 (215) ELT 3 (SC)] as also on Honble Allahabad High Court decision in the case of Hello Minerals Water Pvt. Ltd. vs. Union of India [2004 (174) ELT 422 (All)]. As such, he submits that once the wrongly availed credit stands reversed by them, which amounts as if the same was never availed in which case penalty would not be leviable upon the appellant.
6. Countering the above argument, learned DR appearing for the Revenue submits that appellant had not challenged the fact of wrongly availment of credit and have reversed the same on being pointed out by the audit. This fact itself reflects upon their malafide in which case penal provisions should be invoked against the assessee.
7. After having appreciated the submissions made by both sides, I find that is a case of allegedly wrong availment of credit in some of the capital goods. When the audit pointed out the fact to the assessee that they were not entitled to avail the credit, the appellant instead of entering into litigation, accepted the same and reversed the same immediately. Admittedly penal provisions are invokable, once there is a malafide on the part of the assessee. In the present case, the show cause notice does not attribute any malafide intention to the appellant so as to invoke the penal provisions of Section 11AC. The arguments of the learned DR is that since 11AC stand invoked that itself is sufficient to attribute malafide to the appellant, cannot be appreciated inasmuch as there has to be element supported by evidence to invoke the provisions of Section 11 AC itself. In the absence of any such element, I do not find any justification for imposing penalties upon the assessee. The same is accordingly set aside.
8. In view of the above discussions, Revenues appeal are rejected and assessee appeals are allowed.
(Dictated and pronounce in the open Court) (Archana Wadhwa) Member (Judicial) ss ??
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