Custom, Excise & Service Tax Tribunal
M/S. Softesule Pvt. Ltd vs Commissioner Of Central Excise, Mumbai ... on 4 August, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. E/512/09 (Arising out of Order-in-Appeal No. AH/116/M-III/2009 dated 16/3/2009 passed by the Commissioner (Appeals) Central Excise, Mumbai Zone-II For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Softesule Pvt. Ltd.
:
Appellants
VS
Commissioner of Central Excise, Mumbai -III
Respondents
Appearance
Ms. Purnima Laxminarayanan, Advocate for Appellants
Shri V.K. Singh, JDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of decision : 04/08/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
The appellant has filed this appeal against the order of lower authorities confirming the demand with interest and equivalent amount of penalty holding that the appellant has wrongly taken credit on inputs used for the manufacture of P &P Medicine which are fully exempt from payment of duty.
2. The learned Advocate Ms. Purnima Laxminarayanan submitted that the appellant has already reversed the credit by paying duty on the final product. She further submitted that they have paid a duty of Rs.31,99,763/- on P & P medicines which are exempt against the availment of the credit used in those P & P medicines to the tune of Rs. 2,20,379/-. She further submitted that in the series of decisions, it is held by this Tribunal that in such a situation when the duty has been discharged by the appellant on the exempted final products, the same may be treated as reversal of the Cenvat credit on inputs used in the manufacture of the final exempted product. In the case of PSL Holdings Ltd. Vs. Commissioner of Central Excise, Rajkot reported in 2003(156) ELT 602 (T). This Tribunal has held as under:-
We have considered the submissions made by both sides. The undisputed facts on record are that the appellants were availing the benefit of the Cenvat credit of duty paid on the coating materials and were paying the duty of excise on their final product on the full value of the coated pipes. As such the credit availed by them was being utilized for payment of duty on the coated value of the pipes. By adopting such an exercise, the credit availed by the appellants is reversed by way of utilizing the same for payment of duty on the final product which they were not required to pay. In these circumstances, in our views, the credit availed by the appellants and utilized by them for the purpose for which the same was not required to be utilized, already stands reversed by them. As such, they cannot be asked to once again reverse the credit so availed. Accordingly, we set aside the impugned order and allow the appeal with consequential relief to the appellants.
3. Heard.
4. It is not in dispute that the appellant has paid the duty of Rs. 31,99,763/- which the appellant was not liable to pay as the final product is exempt from payment of duty. As held by this Tribunal, in the case of PSL Holdings Ltd. (Supra), the credit availed by the appellant is being realized for payment of duty on their final product, the appellant has reversed the credit availed on the inputs used in the manufacture of their final product. Accordingly, the appellant cannot be asked to reverse the credit so availed. Following the same ratio, in this case also, the appellants have discharged their obligation of reversal of credit taken on inputs used in manufacturing the exempted final product by clearing the final product on payment of duty. Accordingly, the impugned order is set aside, the appeal is allowed.
(Pronounced in court) (Ashok Jindal) Member (Judicial) Sm 3