Custom, Excise & Service Tax Tribunal
Cce, Pondicherry vs M/S. Jeevan Diesels & Electricals Ltd on 9 April, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
E/136/2009 and E/CO/104/2009
(Arising out of Order-in-Appeal No. 162/2008 (P) dated 29.12.2008 passed by the Commissioner of Central Excise (Appeals), Chennai)
CCE, Pondicherry Appellant
Vs.
M/s. Jeevan Diesels & Electricals Ltd. Respondent s
Appearance Shri C. Dhanasekaran, SDR For the Appellant Shri S. Vinayaka,Advocate and Shri K.S. Jain, M.D. For the Respondent CORAM Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing: 09.04.2010 Date of Decision: 09.04.2010 Final Order No. ____________ Heard both sides. It is the case of the Department that the respondents received back DG sets and took credit of duty paid on the same but these were not subjected to any manufacturing process and therefore under Rule 16(2) of the Central Excise Rules, 2002 they were required to reverse the credit taken by them. It is the contention of the respondents that some of these sets were dismantled and either the dismantled items were sold or re-made DG sets were sold and in some cases the DG sets were sold as such. They further contend that while clearing the goods they have appropriated duty with reference to the transaction value. It is also their contention that they have disclosed the receipt and the sale of the impugned DG sets in the monthly returns giving cross-reference to the original clearance number in which the DG sets were initially received back. They also support the impugned Order-in-Appeal passed by the lower appellate authority holding that the demand to be entirely time-barred.
2. The learned SDR appearing for the Department states that the Department has come in appeal challenging the impugned order as the respondents had not indicated in the return that some of the sets were not amounting to manufacture as required under Rule 16(2).
3. In the course of the hearing, the respondents pointed out a Table in page 30 of the cross-objection filed by them which gives the details of the eight cases of DG sets received and how they have been cleared on payment of duty.
4. After considering the submissions from both sides as well as the case records including the Table at page 30 of the cross-objection submitted by the respondents, I find that in 5 out of the 8 cases the duty paid by the respondents on the goods cleared by them which are co-relatable to the originally retuned goods is more than the credit taken. Hence in respect of goods covered under Sl. Nos. 1, 4, 5, 6 and 8, there cannot be any question of further demand as the duty amount paid by them is already more than the amount required to be reversed.
5. As regards the other three cases, I find that though the respondents had declared returning the receipt and sale of the goods including dismantled components in some cases, it was not declared to the Department that in these cases the processes undertaken by them after receipt of the returned goods did not amount to manufacture. In the absence of such a declaration, the Department could not have applied the first part of Rule 16(2) and demanded duty within the normal time limit prescribed under the law. Only after the audits scrutiny, the factual aspect was known to the Department and hence I am of the view that it is correct in invoking the larger period of limitation.
6. However, in respect of cases at Sl. Nos. 2, 3 and 7 of the Table referred to above, it is seen that the duty paid is short by only Rs.561/- in respect of Sl. No. 2, it is short by Rs.10,510/- in respect of Sl. No. 3 and it is short by Rs.138/- in respect of Sl. No. 7. Since Rule 16(2) requires the respondents to reverse the credit taken on returned goods, the amount paid by them on the transaction value of the clearances made can be adjusted against such requirement of reversal of the credit. I find that the appellants are only required to pay Rs.561/- in respect of Sl. No. 2 and Rs.138/- in respect of Sl. No. 7. As regards Sl. No. 3 the learned Managing Director Shri K.S. Jain present during the hearing states that out of the DG sets received the alternator was still in stock and the same has been subsequently cleared on payment of duty. The duty paid in respect of the alternator is required to be ascertained and in case it is more than Rs.10,510/- the respondents would not be required to pay any further amount but in case it is short, the respondents should be required to pay the amount to the extent of the shortfall. As regards the interest and penalty amounts which were imposed by the original authority, the same have also to be revised considering the fact that the respondents have to pay only a small amount towards duty. For the purpose of re-calculation of the payable amount of duty to be paid as indicated above and to determine the interest and penal liability on such redetermined amount of duty, after setting aside the impugned order, I remand the matter to the original authority for the aforesaid limited purpose only. The Departments appeal is allowed in the above terms.
The cross-objection filed by the respondents also stands disposed of.
(Dictated and pronounced in open court) (Dr. Chittaranjan Satapathy) Technical Member Rex ??
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