Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & St, ... vs M/S. S.T. Cottex Exports Pvt. Limited on 15 February, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017 COURT NO. I Appeal No. E/291/2009-DB Date of Hearing/ Decision : 15.02.2018 [Arising out of Order-in-Appeal No. OIA- 353/CE/APPL/LDH/2008 dated 24.10.2008 passed by the Commissioner (Appeals) Central Excise & ST, Chandigarh] Commissioner of Central Excise & ST, Ludhiana : Appellant vs. M/s. S.T. Cottex Exports Pvt. Limited : Respondent
Appearance:
Shri Satyapal, A.R. for the Appellant- Revenue(s) Shri Mohinder Singh, Advocate for the Respondent-Assessee(s) CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Honble Mr. Devender Singh, Member (Technical) Final Order No. 60090/2018 Per : Devender Singh The brief facts of the case are that the appellants are engaged in the manufacture of Cotton Yarn and Yarn of Man-made Staple Fibre. During the period July 2004 to December 2004, they cleared their final products for home consumption as well as for export without payment of duty, under Notification No. 30/2004-CE dated 09.07.2004. During same period, they had taken Cenvat credit on capital goods. Accordingly, a show cause notice was issued and the adjudicating authority disallowed the credit on the ground they had availed Cenvat credit on the capital goods which were exclusively used in the manufacture of exempted goods during the said period. The same was appealed against and the Commissioner (Appeals) allowed the appeal. Aggrieved by the same,the Revenue has filed this appeal.
2. Ld. AR submits that the appellants were engaged exclusively in the manufacture of goods of exempted category and hence, the Cenvat credit on capital goods could not be allowed. He relied on the following judgments:-
(a) CCE Indore vs. Surya Roshni Limited 2003 (155) ELT 481 (Tri. Del)
(b) Surya Roshni Limited vs. CCE Indore 2003 (158) ELT A273 (SC)
(c) Spenta International Limited vs. CCE, Thane 2007 (216) ELT 133 (Tri. LB)
(d) Brindavan Beverages Pvt. Limited vs. CCE, Meerut-II 2008 (232) ELT 475 (Tri. Delhi)
3. Ld. Advocate submits that they had started availing the benefit of Notification No. 29/2004-CE with effect from 18.06.2005. They had thus cleared the goods on payment of duty, as well as without payment of duty hence the contention of the department that the capital goods had been used exclusively for the manufacture of exempted goods was not correct. He relied on the judgment of Hon'ble Punjab & Haryana High Court in their own case, C.C.E.-CHD-II vs. S.T. cottex exports as reported at 2011 (268) ELT 318 (P&H), in which under identical circumstances, the order of the Tribunal allowing them the benefit of Cenvat credit of capital goods had been upheld.
4. Heard the parties and perused the record.
5. We find that the appellants had availed Cenvat credit of capital goods during the period July 2004 to December 2004, while availing the benefit of Notification No. 30/2004-Central Excise However, it is fact on record that the appellant had also cleared the goods on payment of duty under Notification No. 29/2004-CE with effect from 18.06.2005. Hence, we find no fault in the finding of the ld. Commissioner (Appeals) that capital goods were used for manufacture of exempted and duty paid goods. In the identical circumstances, in the appellants own case 2011 (268) ELT 318 (P&H) (Supra), the Hon'ble Punjab & Haryana High Court has held as below:-
5.?We are unable to accept the submission. Present is not a case of subsequent withdrawal of exemption as in the case of Surya Roshni Notification dated 9-7-2004 is prior to the period of January, 2005 to March, 2005. The Tribunal has held that goods were not used in manufacture of exempted goods. The finding is as under :-
I have carefully considered the submission from both sides and perused the records. Capital goods, in question, had been received during January, 2005 to March, 2005 and at that time the goods manufactured by using those capital goods- cotton yarn had been cleared by availing full duty exemption under notification No. 30/2004-C.E. However, from June, 2005 onward, the appellants started available benefit of notification No. 29/04-C.E. in respect of their clearance for export where there is optional rate of duty of 4% and there is no dispute about the fact that notification No. 29/04-C.E. and 30/04-C.E. were being available during the same period simultaneously. In view of this position, it cannot be said that the capital goods, in question, had been used exclusively for the manufacture of fully exempted finished products. Under sub-rule (4) of Rule 6 of Cenvat Credit Rules, 2004, capital goods cenvat credit is inadmissible only in respect of those capital goods which are exclusively used in the manufacture of exempted goods. But is is not so in this case. In the case of Surya Roshni Ltd. (supra) relied upon by the Commissioner (Appeals), the finished products at the time of receipt of capital goods were fully and unconditionally exempt from duty while it is not so in this case as in this case while Notification No. 30/4-C.E. provides full duty exemption subject to the condition that no input duty credit has been taken, Notification No. 29/04-C.E. issued on the same date provides optional rate of duty of 4% adv. without any condition. Therefore, the ratio of Tribunals judgment in the case of Surya Roshni Ltd. (supra) is not applicable to the facts of this case.
6.?In view of finding of the Tribunal that the assessee availed benefit of notification under which 4% duty was payable, it cannot be held that assessee used the capital goods in manufacture of exempted goods in which case the assessee could not claim the benefit of cenvat credit under Rule 6(4). No substantial question of law arises.
6. In view of the above, we find no infirmity in the order of the ld. Commissioner (Appeals) and the appeal of the Revenue, being devoid of any merit, is accordingly dismissed.
(Operated part of the order pronounced in the court) Ashok Jindal Member (Judicial) Devender Singh Member (Technical) KL 4 Appeal No. E/291/2009-DB