Custom, Excise & Service Tax Tribunal
Allison Transmission India Private Ltd vs Commissioner Of Central Excise on 30 March, 2017
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/40152/2016
[Arising out of Order-in-Appeal No.338 & 339 (CXA-II) dt. 20.10.2015 passed by the Commissioner of Central Excise (Appeals-II), Chennai]
Allison Transmission India Private Ltd.
Appellant
Versus
Commissioner of Central Excise,
Chennai-IV Respondent
Appearance:
Shri J. Shankarraman, Advocate For the Appellant Shri S. Nagalingam, AC (AR) For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing/decision : 30.03.2017 FINAL ORDER No.40552/2017 The facts of the case are that appellants are engaged in the manufacture of transmission assembly. They had re-exported the imported raw material which were found defective and on which cenvat credit were availed without reversing such credit, during the period 29.09.2009 to 15.12.2011. Department took the view that appellant have thereby contravened provisions of rule 3 (5) of Cenvat Credit Rules 2004 since in the course of such exports they should have paid amount equal to cenvat credit availed thereon. In adjudication, original authority ordered recovery of the allegedly wrongly availed cenvat credit of Rs.27,51,590/-with interest thereon and imposed penalty of Rs.20,000/- under rule 15 (2) of the Rules.
2. Aggrieved, appellants filed appeal before Commissioner (Appeals). Department also filed appeal, on the grounds that equal penalty was not imposed vide impugned order dt. 20.10.2005 (impugned order). Appellants appeal was rejected and the department appeal was allowed. Aggrieved, appellants are before this forum.
3. Today when the matter came up for hearing, Shri J. Shankar Raman, Ld. Advocate for the appellants, took me through the provisions of Rule 3 (5) of the Rules. He submits that issue of eligibility credit in respect of inputs on which credit is availed but where those inputs were exported as such under bond, has been taken cognizance of by the Board and such removals are allowed to be exported under bond without any reversal of the credit. He submits that as far back as in 1996 vide circular No.283/117/96-CX dt. 31.12.1996, this aspect had been amply clarified by the Board, and this clarification has been reiterated subsequently also. Ld. Advocate also submits that the issue is fully covered by the ratio of the decision in the following cases :-
(i) CCE Jaipur-I Vs R.F.H. Metal Castings (P) Ltd.
2005 (184) ELT 194 (Tri.-Del.)
(ii) Zydex Industries Vs CCE Vadodara 2007 (219) ELT 602 (Tri.-Ahmd.)
(iii) MRF Ltd. Vs CCE & ST, LTU 2016-TIOL-1573-CESTAT-MAD
(iv) Videcon International Ltd. Vs CCE Vadodara-II 2009 (235) ELT 135 (Tri.-Ahmd.)
4. On the other hand, Ld. A.R supports the impugned order.
5. Heard both sides. From the discussions and arguments of ld. Advocate, it is amply clear that such inputs should be allowed for export under bond without any reversal of the credit in terms of circular No.345/2/2000-TRU dt. 29.8.2000 (para 8 thereof). Obviously this facility has been extended as a measure to facilitate the manufacturer in such a situation, otherwise, such manufacturer would face difficulty to get replacement of imported goods which have been found defective, especially in a high precision area such as manufacture of transmission assembly.
6. I am therefore of the considered opinion that the issue in dispute is fully covered by the Boards circulars supra and also covered by the ratio of the judgments cited by the ld. Advocate. This being so, appeal will succeed and is therefore allowed with consequential relief, if any, as per law.
(Dictated and pronounced in open court) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) gs 4 Appeal No.E/40152/2016