Custom, Excise & Service Tax Tribunal
Cipla Ltd vs Siliguri on 11 July, 2024
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
REGIONAL BENCH - COURT NO.2
Excise Appeal No. 76008 of 2015
(Arising out of Order-in-Original No.08-09/COMM/CE/SLG/15-16 dated 17/07/2015
passed by Commissioner of Customs, Central Excise & Service Tax, Siliguri.)
M/s. Cipla Ltd.
(Village-Taza Block, Rorathang, Dist.- East Sikkim-737132)
Appellant
VERSUS
Commr. of Central Excise & Service Tax, Siliguri
(C. R. Building, Haren Mukherjee Road, Hakim Para, Siliguri-734001)
Respondent
APPEARANCE :
Mr. Rahul Tangri & Ms. Payal Bharwani both Advocate for the Appellant Mr. S. Mukhopadhyay, Authorized Representative for the Respondent CORAM:
HON'BLE MR. R. MURALIDHAR, MEMBER (JUDICIAL) HON'BLE MR. RAJEEV TANDON, MEMBER (TECHNICAL) FINAL ORDER NO.76495/2024 Date of Hearing : 11 July 2024 Date of Decision: 11 July 2024 PER R. MURALIDHAR:
The appellant is manufacturer of medicaments falling under Chapter 30 of the Central Excise Tariff Act, 1985. They were also claiming the benefit of area-based exemption under Notification No. 20/2007-CE dated 25.04.2007. The appellants have utilized the Cenvat Credit available under Basic Excise Duty for payment of Education Cess and Secondary & Higher Education Cess (SHE Cess in short). On the ground that the appellants are prohibited from utilizing Cenvat Credit of BED for discharge of payment of Education Cess and SHE Cess, the Show Cause Notices were issued demanding Rs.
3,04,58,052 and 41,07,865. There was also a demand for Rs.4,77,134 on account of erroneous availment of the same. After due process, the Adjudicating Authority confirmed the demands of Rs.2,00,87,868 and 41,07,865 and Rs.1,77,134 along with interest and penalty. Being aggrieved, the appellant is before the Tribunal.
2Excise Appeal No. 76008 of 2015
2. The Learned Counsel appearing on behalf of the appellant submits that the issue is no more res integra. This Bench in the case of Godrej Consumer Products Ltd. & German Remedies Ltd. V. CCE & ST, Siliguri vide Final Order No. 76521-76522/2023 dated 29/08/2023 has held that the assessee is entitled to utilize Cenvat Credit of BED for payment of Education Cess and SHE Cess. He submits that earlier the issue was decided by Hon'ble Guwahati High Court in the case of UOI Vs. Kamakhya Cosmetics & Pharmaceutical Pvt. Ltd.-2012 (7) TMI 902 (Guwahati High Court), which was relied upon by this Bench. Hence, the Learned Counsel submits that the appeal may be allowed on merits.
3. The Learned Counsel also submits that the Show Cause Notice has been issued on 26.04.2012 for the transactions which took place in 2011-12 to 2012-13 and on 19.08.2024 for the period September 2013 to February 2014. He submits that the debiting of BED for payment of Education Cess and SHEC was shown in the monthly Returns. The fact that the appellant is operating in terms of exemption notification was also known to the Department. Therefore, part of the confirmed demand is hit by time bar.
4. The Learned AR reiterates the findings of the lower authority and justifies the confirmed demand.
5. Heard both sides and perused the Appeal papers and documentary evidence placed before us.
6. On going through the factual details, we find that the issue is no more res-integra. This Bench in the case of Godrej Consumer Products Ltd. & German Remedies Ltd. V. CCE & ST, Siliguri vide its Final Order No. 76521-76522/2023 dated 29/08/2023 had relied on the judgment of Hon'ble High Court of Guwahati in the case of 3 Excise Appeal No. 76008 of 2015 Kamakhya Costmetics & Pharmaceutical Pvt. Ltd.-2015 (323) ELT 33 (Gau.), and has held as under:-
12. Now, the jurisdictional High Court of Guwahati has an occasion to examine the issue in hand in the case of Kamakhya Cosmetics & Pharmaceutical Private Limited reported in 2015 (323) ELT 33 (Gau.), wherein the Hon'ble High Court has observed as under:-
"5. In the present case, the assessee utilized Cenvat credit of Basic Excise duty for paying Education Cess to which department raised objection. The Adjudicating authority held that Cenvat Credit of Basic Excise Duty could not be utilized for payment of Education Cess and accordingly deducted the amount from the refund due to the assesse.
6. The assessee preferred revision petition under Section 35EE of the Act which was allowed as follows :
"The appellant has utilized the Cenvat credit for payment of education Cess on final products in respect of which exemption under said notification is availed of and since Education Cess is also a Duty of excise, I hold that the appellant's action is correct and is in conformity with the Cenvat Credit Rules, 2004."
7. The above view was upheld by the Tribunal while dismissing appeal of the Revenue against the above order. It was held that there was no bar to utilize Cenvat credit of Basic Excise Duty for payment of Education Cess.
8. Since the view taken by the Tribunal is in conformity with the view taken by this Court referred to above, the question of law raised by the Revenue has to be decided against it and answered in the affirmative."
13. Therefore, following the decision of the Hon'ble Guwahati High Court, we hold that the appellants are entitled to utilise the cenvat credit of BED for payment of EC and SHEC.
14. Accordingly, the impugned orders are set aside and the appeals are allowed with consequential relief, if any.
[Emphasis supplied]
7. Since the issue in the present case is identical. Respectfully following the decision of the cited case law, we allow the appeal on merits.
4Excise Appeal No. 76008 of 2015
8. In the first Show Cause Notice there is an allegation about wrong utilization of Cenvat Credit to the extent of Rs. 4,77,134/-. On receipt of the Show Cause Notice on 3/01/2014, the Appellant has filed their letter on 11/05/2015 clarifying as to how this amount is not required to be paid. They have given a Table showing the details of Cenvat Credit availed on account of BED which has been taken in the Show Cause Notice. They have shown the details of the BED used by them as per the Cenvat Records. They have also given the detailed justification for difference and also provided the documents in support of justification to the authorities [Page No. 154 of the Appeal Book]. The details are as per the following Table:-
Month Credit availed during the Credit availed during the Difference Justification for the Documents provided in month in RG23A P-II in Month in RG23A P-II in in BED difference support of justification BED (as per annexure BED (as per CENVAT {B}-{A} attached in SCN)-{A} record)-{B} Jun-11 9407208+171739+85878 9428404+172163+86090 21196.00 The Difference in BED is Copy of invoice & debited vide part II no. Copy RG 23A part II 1059 for goods cleared on payment of duty Jul-11 7688142+129214+64617 7792705+131291+65656 104563.00 The Difference in BED is Copy of invoice & debited vide Part II no. copy RG 23A Part II 1450 & 1547 for goods cleared on payment of duty Aug-11 12177590+193076+96548 12216908+193862+96941 39318.00 The Difference in BED is Copy of Invoice & debited vide part II no. copy RG 23A Part II 1697 for goods cleared on payment of duty.
Jan-12 5597607+101777+50893 5609664+102018+51014 12057.00 The Difference in BED is Copy of ARE 1 &
debited vide part II no. Copy RG 23A Part II
4025 for non-export of
goods cleared for export
under LUT vide ARE1 no.
1/SKM/2011
Total= 1,77,134/-
5
Excise Appeal No. 76008 of 2015
9. In respect of the 3,00,000, they have taken the stand that AED which was taken by them in the ER-1 amount to Rs. 25,29,631/-
whereas in the SCN, it was reflected as Rs. 28,29,631. The Adjudicating Authority has dropped the demand of Rs.3,00,000/- after verifying the facts.
10. In respect of balance 1,77,134/- he has given a finding that proper evidence has not been provided by the Appellant. From the above Table, we find that the appellant has properly reconciled the difference and also he has enclosed the required documents in support of their justification. Therefore, we do not find any error in the submission of the appellant that 1,77,134/- is required to be dropped. Considering the documentary evidence placed by them, we set aside the confirmed demand of Rs. 1,77,134/-.
11. We also find that the issue is that of interpretation which got clarified only after the issue reaching the Guwahati High Court, we hold that the Department has not made out any case of suppression on the part of the Appellant. Therefore, the confirmed demand for the extended period stands set aside on account of time bar also.
12. Thus, the appeal stands allowed. The appellant would be eligible for consequential relief, if any, as per law.
(Operative part of the order was pronounced in the open court.) Sd/-
(R. Muralidhar) Member (Judicial) Sd/-
(Rajeev Tandon) Member (Technical) Pooja