Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs M/S Mayo (India) Ltd on 30 March, 2012
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. E/1225/04 (Arising out of Order-in-Appeal No. BPS(427)49/2003 dated 24.12.2003 passed by the Commissioner of Central Excise & Customs (Appeals), Aurangabad). For approval and signature: Honble Shri Sahab Singh, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Commissioner of Central Excise, Aurangabad Appellant Vs. M/s Mayo (India) Ltd. Respondent Appearance: Shri Navneet, Addl. Commissioner (A.R.) for Appellant None for Respondent CORAM: SHRI SAHAB SINGH, MEMBER (TECHNICAL) Date of Hearing: 22.03.2012 Date of Decision: 30.03.2012 ORDER NO. Per: Sahab Singh
This is an appeal filed by the Revenue against Order-in-Appeal No. BPS(427)49/2003 dated 24.12.2003.
2. Brief facts of the case are that M/s Mayo (India) Ltd. (hereinafter referred to as respondents) are manufacturer of Patent and Proprietary Medicaments falling under Chapter 30 of Central Excise Tariff Act, 1985. Respondents are availing Modvat Credit in respect of inputs purchased for manufacturing of final product. As per practice, respondents used to avail Modvat credit on the entire inputs received in the factory for manufacturing of dutiable as well as exempted goods. They used to reverse an amount equivalent to 8% of price of exempted goods in terms of procedure under Rule 57CC of the Central Excise Rules. Respondents had shown amount @ 8% representing duty on invoices issued and at the same time they had debited the said amount in their RG-23A Part-II or PLA account. The particulars of debit entries were mentioned on the invoices. Department took a view that respondent had contravened the provisions of Section 11D of the Central Excise Act read with Rule 57CC of the Central Excise Rules. Another issue related to availment of Modvat credit on Ciprofloxacin HCL used in the manufacture of Ciprofloxacin Tab 250/500 mg attracting nil rate of duty. Accordingly, a show-cause notice dated 21.11.2001 was issued to the respondent proposing the demand of duty, denial of Modvat credit, recovery of interest and imposition of penalty. The show-cause notice was confirmed by the Joint Commissioner on 19.3.2003. Respondents filed an appeal before Commissioner (Appeals) who vide the impugned order allowed their appeal. Aggrieved from the same, Revenue is in appeal before this Tribunal against the impugned order.
3. Learned Addl. Commissioner (A.R.) appearing for the Revenue submitted that the Commissioner (Appeals) had relied on Single Member judgment in case of Commissioner of Central Excise, Chennai Vs. Megatech Controls Ltd. reported in 2003 (108) ECR 566 (Tri), whereas the Tribunal in the case of Vimal Molders (I) Ltd. Vs. Commissioner of Central Excise, New Delhi 2004 (164) ELT 302 (Tri-Del) has held that 8% of price paid in lieu of CENVAT/MODVAT Credit taken on exempted final goods, but the same also collected from the customers, is an amount in excess of duty leviable on goods and is to be deposited with the Govt. On issue of MODVAT credit, he submitted that respondent had full knowledge that input Ciprofloxacin HCL was not a common input going into manufacture of exempted goods and dutiable final products and this fact was suppressed by the respondent from the department. Hence, extended period is invokable for denial of Modvat credit.
4. None appeared on behalf of the respondents despite notice.
5. After hearing the appellant and going through the case records, I find that first issue involved in appeal is whether show-cause notice disallowing Modvat credit is time barred and second issued is whether or not amount reversed in terms of Rule 57CC and collected by the assessee from the buyers is required to be paid under Section 11D of the Act.
6. I find that the respondent has filed Modvat Declaration on 23.4.1997 and Classification Declaration No. Mayo-5/97-98 dated 23.4.1997, Ciprofloxacin Tab 250/500 mg was attracting nil rate of duty Both these declarations were filed with the department. Moreover, departmental officers visited their factory on 17.7.1999, but show-cause notice for denying the Modvat credit was issued only on 21.11.2001. Therefore, I find that allegation of suppression of fact has rightly been held unsustainable by the Commissioner (Appeals).
7. As regards demand under Section 11D of the Act for amount reversed in terms of Rule 57CC and collected from the buyers, the issue stands settled in view of the Larger Benchs decision in the case of Unison Metals Ltd. Vs. Commissioner of Central Excise, Ahmedabad-I 2006 (204) ELT 323 (Tri-LB) in which it was held that payment of 8% amount on removal is as per Rules and no amount collected from buyers which are not paid to Govt. and Section 11D not applicable. Following the decision of Larger Bench, I do not find any infirmity in the Order-in-Appeal and uphold the same.
8. Revenues appeal is dismissed.
(Pronounced in Court on ) (Sahab Singh) Member (Technical) Sinha 1