Custom, Excise & Service Tax Tribunal
C.C.E & S.T. - Ghaziabad vs Mahaveer Cylinders Ltd on 1 September, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
REGIONAL BENCH: ALLAHABAD
SINGLE MEMBER BENCH
E/CO/51546/2015
E/51914/2015-EX(SM)
Dated of Hearing/decision: 01/9/2016
[Arising out of Order-in-Appeal NO. GZB/EXCUS/000/APP/302/2014-15 dated 26.12.2014 passed by Commissioner (Appeals), Central Excise, Ghaziabad]
For approval and signature:
Honble Shri Anil G. Shakkarwar, 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?
No
2.
Whether it would be released under Rule 27 of the 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 Department Authorities?
Yes
C.C.E & S.T. - Ghaziabad Appellant
Vs.
Mahaveer Cylinders Ltd. Respondent
Appearance:
Present for the Appellant: Shri Rajeev Ranjan (Joint Commissioner) A.R. Present for the Respondent: Shri Rajesh Chibber, Advocate Coram: Honble Shri Anil G. Shakkarwar, Member (Technical) Final Order No. 70759/2016 Per: Anil G. Shakkarwar The Respondent were manufactures of LPG Cylinders and registered with the Central Excise Department and were availing Cenvat Credit facility. The respondent were issued with a Show Cause Notice dated 4/7/2013 alleging that they were engaged in trading of H.R. Coils, S.C. Valves, LPG Cylinders etc. and they became the provider of exempted service as per the explanation to Rule 2(c) (e) of the Cenvat Credit Rules, 2004 and they were required to pay an amount 5% / 6% of value of the goods traded and they were called upon to Show Cause as to why amount of Rs.12,38,632/- should not be demanded from them. In reply to the said show cause notice the respondent submitted that they cleared input as such which have been either returned to same party or the third party, on which they made reversal of Cenvat Credit availed. They also contested that removing the input after reversal of Cenvat credit in no circumstances would be treated as trading activity. The original authority did not agree with the same and confirmed the demand. The respondent preferred appeal before Commissioner (Appeals) who vide Order-in-Appeal No. 302/14-15 dated 29.12.2014 set aside the Order-in-Original and allowed appeal filed before him.
2. Aggrieved by the order passed by the ld. Commissioner (Appeals) Revenue is before this Tribunal with a prayer to set aside order passed by Ld. Commissioner (Appeals).
3. The ld. D.R. submitted the ground of appeal which is basically repetition of contentions in the order-in-original.
4. The ld. Counsel for the respondent have submitted that they were clearing input as such on which Cenvat credit was taken, by reversal of Cenvat credit. Such action of clearance of inputs as such was treated by Revenue as trading actions. The Revenue treated such clearance of inputs as such on reversal of Cenvat credit as exempted service and demanded amount under Rule 6(3) of Cenvat Credit Rules 2004. The said contention was available on the record of the proceedings still Revenue did not raise any ground to establish that the same is not tenable in law. Further ld. Counsel relied on this Tribunal Final Order No. A/51689-51690/2015 passed in the case of Commissioner of Central Excise Ghaziabad Vs. M/s UP Telelinks, in which exactly same point was settled by holding that removal of inputs does not amount to trading Rule 3 (5) of Cenvat Credit Rules provide that if inputs are removed as such, the assessee is required to reverse only Cenvat credit availed on such inputs.
5. I have taken rival contention into consideration and I am of the view that removal of input as such by a manufacturer cannot be treated as trading activity and hence allegations in the show cause notice are not sustainable. Therefore, I reject the appeal. The respondent shall be entitled to consequential relief. Cross Objection No. 51546 of 2015 also stand disposed.
(Dictated and pronounced in the open Court) (ANIL G. SHAKKARWAR) MEMBER (TECHNICAL) (K. Gupta) E/CO/51546/2015 E/51914/2015-EX(SM) 1