Custom, Excise & Service Tax Tribunal
M/S. R.K. Industries vs Cce, Raipur on 2 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 725 OF 2007-SM [Arising out of Order-in-Appeal No. 194-CE/RPR/APPL I/2006 dated 28.11.2006 passed by the Commissioner (Appeals), Central Excise, Raipur] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy of the order? 4. Whether order is to be circulated to the Departmental authorities? M/s. R.K. Industries Appellant Vs. CCE, Raipur Respondent
Appearance:
Smt. Reena Kher, Advocate for the appellants; Shri R.K. Verma, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 2nd June, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
The relevant facts of the case, in brief, are that the appellants are engaged in the manufacture of Wires. On 1.4.2005 they opted for availing SSI Exemption benefit under notification No. 8/2003-CE dated 1.3.2003. They availed SSI Exemption benefit during the financial year 2005-06. However, in the month of January, 2006 they felt to opt out of SSI Exemption and, therefore, they deposited the entire amount of duty of Rs. 1,28,400/- on 12.1.2006 and 13.3.2006 in respect of clearances made during the financial year, 2005-06. A show cause notice dated 24.3.2006 was issued proposing the demand of Rs. 3,46,456/- equivalent to the Cenvat credit in respect of inputs lying in stock or in process or contained in final product on 1.4.2005. The original authority confirmed the demand and imposed penalty of Rs. 50,000/- along with interest. The Commissioner (Appeals) upheld the adjudication order.
2. Learned Advocate on behalf of the appellants submits that though they have opted for SSI Exemption on 1.4.2005, but, they opted out from SSI Exemption in 2006 and paid the entire amount of duty in question on 10.1.2006 and 13.3.2006. She submits that in view of opting out of SSI Exemption there is no reason of denial of credit on stock as on 1.4.2005. Her alternative submission is that if the demand of the duty is upheld the amount deposited by the appellants on 10.1.2006 and 13.3.2006 is liable to be adjusted. She also submits that the appellant is a small unit and there is no intention to evade payment of duty and, therefore, penalty is not warranted.
3. Learned D.R. reiterates the findings of the Commissioner (Appeals). He submits that Rule 11(2) of Cenvat Credit Rules, 2004 provides that if a manufacturer who opts for exemption from the whole of the duty of excise leviable on goods manufactured by him under a notification based on the value or quantity of clearances in a financial year, and who has been taking CENVAT credit on inputs or input services before such option is exercised, shall be required to pay an amount equivalent to Cenvat credit, if any, lying in his credit, the balance, if any, still remaining shall lapse and shall not be allowed to be utilized for payment of duty on any excisable goods, whether cleared for home consumption or for export.
4. In the present case, there is no dispute that the appellants availed SSI exemption during the financial year 2005-06. On a query from the Bench, the learned Advocate submits that the appellants voluntarily deposited the duty on 10.1.2006 and 13.3.2006 in respect of clearances made during the entire financial year. Learned Advocate also points out that the appellants have not availed any further Cenvat credit. It is also submitted by the appellants that the payment was made on their own without any permission from the department. So, in my view, the demand under Rule 11(2) of the Rules is justified.
5. In view of the above discussion, demand of duty is upheld. However, considering the facts and circumstances of the case and that the appellants is a small unit the amount of penalty is reduced to Rs.25,000/-. At this stage, learned Advocate submits that the amount deposited by the appellants may be allowed to adjust against the amount of demand. As such, the original authority is directed to adjust the deposit made by the appellants against the present demand in accordance with law. Appeal is disposed of in the above terms.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK