Custom, Excise & Service Tax Tribunal
Ebg India Pvt. Ltd vs Commissioner Of Central Excise, Nashik on 3 December, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No. I APPEAL No. E/2017/03 (Arising out of Order-in-Appeal No. CEX.XI/JMJ/122/916/ NSK/APPEAL/2003 dated 28.5.2003 passed by Commissioner of Central Excise & Customs (Appeals), Nashik) For approval and signature: Hon'ble Mr. P.G. Chacko, Member (Judicial) and Hon'ble Mr. K.K. Agarwal, 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 :
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?
====================================================== EBG India Pvt. Ltd. Appellant Vs. Commissioner of Central Excise, Nashik Respondent Appearance: Shri Prakash Shah, Advocate, for appellant Shri N.A. Sayed, Authorised Representative (JDR), for respondent CORAM: Hon'ble Mr. P.G. Chacko, Member (Judicial) and Hon'ble Mr. K.K. Agarwal, Member (Technical) Date of Hearing: 3.12.2008 Date of Decision: 3.12.2008 ORDER NO................................. Per: P.G. Chacko
In this appeal filed by the assessee, the short question arising for consideration is whether they were entitled to avail CENVAT credit on inputs on the strength of supplementary invoices and 'differential duty certificates' during the period from 1.4.2000 to 28.8.2000. Prior to 1.4.2000, CENVAT credit of differential duty paid on inputs by a manufacturer/supplier thereof could be availed by a manufacturer of final product on the strength of a certificate issued by the range officer concerned under Rule 57E of the erstwhile Central Excise Rules, 1944. When the said rule was replaced by a new set of rules w.e.f. 1.4.2000 by Notification 11/2000-CE(NT) dated 1.3.2000, neither a supplementary invoice nor a differential duty certificate was specified under the new rules as a document for the purpose of availment of CENVAT credit. It was only on 29.8.2000 that provision was made for availment of CENVAT credit on inputs on the strength of supplementary invoices. Therefore, according to the department, CENVAT credit could not be availed on the strength of supplementary invoice or differential duty certificate during the period from 1.4.2000 to 28.8.2000 in the absence of specific provision for use of these documents for the said purpose. Both the lower authorities have upheld this view and consequently, CENVAT credits totaling to Rs.15,47,200/- have been denied to the assessee for the above period. There is also a penalty of Rs.3,00,000/- on them on the ground of irregular availment of CENVAT credit.
2. Heard both sides. The learned counsel has mainly relied on the Supreme Court's decision in CCE, Madras vs. Home Ashok Leyland Ltd. 2007 (210) ELT 178 (SC), wherein Rule 57E was held to be a procedural and clarificatory provision not affecting the substantive right of a manufacturer of final product to claim MODVAT credit of the duty paid on the inputs used by him in the manufacture of the final product. He has also claimed support from the decision of a learned single Member of the Tribunal in CCE, Goa vs. Essel Pro-Pack Ltd. 2007 (8) STR 609 (Tri.-Mum.), wherein TR-6 challan was accepted as a valid document for availment of CENVAT credit of service tax. We have heard the learned JDR also, who has reiterated the findings of the Commissioner (Appeals).
3. After considering the submissions, we are of the view that the appellants were entitled to take CENVAT credit on inputs in the manner they did during the period of dispute. It is not in dispute that an invoice issued under Rule 52A of the Central Excise Rules, 1944 was one of the documents prescribed for the taking of credit on inputs. When the inputs in question were received in the appellants' factory under cover of such invoices, MODVAT credit of the duty paid thereon was availed by them. Subsequently, on account of enhancement of value, additional amounts of duty came to be paid on the goods by the supplier, which was certified by the departmental officer concerned under Rule 57E. The input supplier also issued supplementary invoices whereunder additional duty was paid, to the appellants. These supplementary invoices were also issued under Rule 52A. We do not find any reason to hold that the supplementary invoice evidencing payment of additional duty amount should be treated on a different footing vis-`-vis the original invoices evidencing original payment of duty on the said goods inasmuch as both these documents were issued under the same provision of law. If the appellants were entitled to take MODVAT credit on their inputs prior to 1.4.2000 on the strength of the original invoices issued by the supplier, they could validly claim to be entitled to take CENVAT credit of the additional amounts of duty paid on the same goods by the supplier under the supplementary invoices. Moreover, the differential duty certificates issued by an officer of central excise were also available to confirm the factum of payment of additional amounts of duty by the supplier. In any case, it was not in dispute that the inputs were received in the appellants' factory and used in or in relation to the manufacture of the final products. The substantive requirements of CENVAT credit were thus met by the party. The benefit was not liable to be denied on procedural grounds. In the case of Home Ashok Leyland Ltd. (supra), it was held that Rule 57E was only a procedural provision. In that case also the substantive conditions for availment of MODVAT credit under Rule 57A of the Central Excise Rules, 1944 were found to have been complied with by the assessee. The Hon'ble Supreme Court held to the effect that non-observance of the procedure under Rule 57E was not to be held out as a ground for denial of the substantive benefit of MODVAT credit otherwise admissible under Rule 57A. In the light of this ruling of the apex court, we hold that the benefit of CENVAT credit of additional duty paid on inputs under cover of supplementary invoice issued under Rule 52A was not to be denied to the appellants on the ground that the differential duty certificates were issued under a provision (Rule 57E), which was non-existent during the period of dispute, or on the ground that such certificates were not issued by the proper officer, the substantive conditions for availment of CENVAT credit having admittedly been fulfilled by the party. We have found that, though the decision in Essel Pro-Pack Ltd. case is not much of any aid to the appellants, they have been able to claim support from the decision of the apex court in Home Ashok Leyland Ltd. case.
4. In the result, the impugned order is set aside and the appeal is allowed.
(Pronounced in Court) (K.K. Agarwal) Member (Technical) (P.G. Chacko) Member (Judicial) tvu 1 5