Custom, Excise & Service Tax Tribunal
Cce, Hyderabad vs M/S. Kedia Vanaspathi Ltd on 8 January, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court I
Date of Hearing: 08/01/2010
Date of decision:08/01/2010
Appeal No.E/642/07
(Arising out of Order-in-Appeal Nos.2&3/2007(H-II)(D)CE dt. 30/3/2007 passed by CCE&C(Appeals), Hyderabad )
For approval and signature:
Honble Mr. M.V.Raindran, 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?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CCE, Hyderabad
..Appellant(s)
Vs.
M/s. Kedia Vanaspathi Ltd.
Respondent(s)
Appearance Ms.Sudha Koka, SDR for the Revenue.
Mr.V.Venkateshwaran, Consultant for the respondent.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2009 Per M.V.Ravindran This appeal is filed by the Revenue against the Order-in-Appeal Nos.2&3/2007(H-II)(D)CE dt. 30/3/2007.
2. Heard both sides and perused records.
3. The issue involved in this case is regarding the utilization of the credit, which was taken by the respondent on an Order-in-appeal No.84/2004(H-III)CE dt. 28/4/2004 vide which ld. Commissioner(Appeals) has allowed the appeal of the respondent. Consequently the said Order-in-Appeal was challenged before the Tribunal and the Tribunal remanded the matter back to the lower authorities for reconsideration of the issue. On reconsideration of the issue, the ld. Commissioner(Appeals) passed an order-in-appeal No.136/2005(H-III)CE dt. 30/6/2005 allowing the appeal of the respondent once again. Aggrieved by such an order, Revenue has filed an appeal No.E/954/2005. Pending decision of such appeal, the lower authorities felt that the appellant should not have taken the credit amount which was sanctioned vide order-in-appeal No.84/2004 and having utilized the same, the appellant is liable to repay back to the Department. The same was paid back and subsequently applied for the refund of the said amount, which was rejected by the department which was accepted and allowed by the adjudicating authority. Aggrieved by such an order, Revenue preferred an appeal before the ld. Commissioner(Appeals). Ld. Commissioner(Appeals) by impugned order in this appeal also upheld the Order-in-Original. I find that the entire issue has arisen from order-in-appeal No.136/2005(H-III)CE dt. 30/6/2005, which allowed the money credit to the appellants. Appeal No.954/2005 against the said Order-in-appeal was disposed of by this Bench vide Final Order No.1317/08 dt. 25/9/2008 holding in favour of the assessee. I may respectfully reproduce the findings:-
5. On a very careful consideration of the issue, we find that the Commissioner(Appeals) has stated that all the provisions relied on by the Revenue in order to deny the benefit of the credit and also transfer the same to another unit of the manufacturer are from the Cenvat Credit Rules and they would not be applicable and he has rightly relied on decision on the Honble High Court of Calcutta in the case of M/s. Rasoi wherein the same points have been considered. Even in the case of CCE, Hyderabad Vs. Agarwal Industries Pvt. Ltd. [2006(73) RLT 49 (CESTAT-Ban.)] which has been decided by this Bench, the same issue has been considered and it has been held that the money credit accumulated can be utilized even though the notification No.45/89-CE is rescinded. The Paragraphs 6 & 7 in the above decision are very relevant which are reproduced herein below:
6 We have gone through the records of the case carefully. The money credit scheme was introduced for encouraging the use of minor oils in the manufacture of vanaspati. When the assessee used certain minor oils, they would be entitled to money credit which can be utilized for payment of duty on vanaspati. In the year 1996, the money credit scheme was abolished. At that time, the respondents accumulated money credit to the tune of Rs. 17.92 crores. The duty was introduced on vanaspati at the rate of Rs. 1.25 per kg as per Notification 37/03-CE dated 30.4.03. The respondents requested that the accumulated amount of credit in their RG23 B-2 may be allowed to be adjusted against the duty payable on clearance of their final on monthly basis. According to the original authority, the money credit available and unutilized lapsed when the notification allowing is rescinded. Relying on various case laws, the Commissioner (Appeals) has allowed the appeal of the respondents. The principle enunciated in all the case laws cited by the respondents. The principle enunciated in all the case laws cited by the respondents and the Commissioner (Appeals) is that the right acquired in terms of the Notification cannot be extinguished by the rescinding of the same notification in the present case. The respondents acquired a right for money credit in terms of the Notification No.45/89 When the above notification was rescinded in 1996, the respondents, had accumulated money credit to the tune of Rs. 17.92 crores. In other words they had acquired a right to use the money credit for payment of duty on vanaspati. In the case of Tungabhadra Industries Ltd. vs. UOI, 2000 (118) ELT 545 (SC), the apex court observed as follows:.
If the notification that had been issued in the year 1987 is examined, it would appear that paragraph (iii) unequivocally, provides that the amount of credit utilised for payment of duty shall not exceed Rs. 1000/- per tonne of vegetable products on any individual clearance. It is thus clear that credits may be accumulated in favour of a manufacturer of vegetable products, pursuant to the notification on the basis of rates provided in the notification on the inputs and that credit could be utilised for payment of duty while clearing the final product and the accumulated credit will not ipso facto get exhausted or lapsed on the rescinding of the notification issued under Rule 57K of the Rules, and therefore, notwithstanding the rescinding of the notification issued in the year 1987 by the notification dated 25th of August, 1989, a manufacturer would continue to utilise the credit accumulated in his favour for payment of duty, even after the recession of the notification, but subject to the provision, contained in Clause (iii) of the notification, which granted the accumulation of credit and utilisation of the same for payment of duty.
7. In view of the clear principle laid down by the Apex Court, the grounds of appeal made by the Revenue have no merits. In the grounds of appeal, the Revenue has elaborately discussed the difference between the modvat scheme the money credit scheme. In our view, these differences are not at all relevant. The main question is whether a right conferred by law and acquired in terms of certain provisions of the notification can be extinguished by rescinding of that notification. The Supreme Court and the various High Courts have answered this question in the negative. In other words, as far as the present case is concerned, the accumulated money credit would not lapse. They would be entitled for payment of duty on vanaspati from the date of the introduction of duty on vanaspati. However, the duty payment shall be subject to the conditions mentioned in the notification by which the money credit was accumulated, namely Notification No. 45/89. Hence Revenues appeal has no merits. The same is rejected. In our view, considering the views taken by this Bench in the above mentioned case and also the reliance of the Commissioner (Appeals) on the decision of the Honble High Court of Calcutta, it is very clear that by rescinding the notification, the credit accrued does not lapse and it can be utilized. Further credit accrued to one unit could be used at other unit at a different place owned, by the same manufacturer. In these circumstances, we do not find any merit in the fl Revenues appeal and the same is dismissed.
4. Since the issue is now stands settled in favour of the respondents, on the very same issue, I do not find any reason for interference is required in the order of the ld. Commissioner(Appeals) and I hold that the impugned order is correct and legal, and does not suffer from any infirmity.
5. Accordingly, Revenues appeal is dismissed.
(Pronounced and dictated in open court) (M.V.Ravindran) Member (Judicial) Nr 5