Custom, Excise & Service Tax Tribunal
M/S. International Transformer (P) Ltd vs Cce, Lucknow on 7 July, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 2540 OF 2007-SM [Arising out of Order-in-Appeal No. 33-CE/2007 dated 28.3.2007 passed by the Commissioner (Appeals), Central Excise, Lucknow] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 1. Whether Press Reporters may be allowed to see the order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 of the order? 4. Whether order is to be circulated to the Departmental authorities? M/s. International Transformer (P) Ltd., Appellants Vs. CCE, Lucknow Respondent
Appearance:
Shri T.K. Srivastava, Advocate for the appellants; Shri S. Gautam, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 7th July, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
The relevant facts of the case as per records, in brief, are that the appellants are engaged in the manufacture of Electrical Transformer and parts thereof under heading No. 8504 of the Schedule to the Central Excise Tariff Act, 1985. They are also engaged in repairing of old and damaged transformers. The appellants were availing Cenvat credit on Transformer oil used in manufacturing activities as well as in repairing job. It is revealed from the show cause notice that the appellants reversed the proportionate amount of credit availed against receipt of transformer oil which is used in repairing of old and damaged transformers. Show cause notice dated 2.2.2005 was issued proposing to demand of duty of Rs. 36,492/- for the period April, 2000 to March, 2002. It has been alleged that the appellants are required to reverse the Cenvat credit on transformer oil on the basis of transaction value as being paid by UPSEB in terms provided under Rule 3(4) of Cenvat Credit Rules, 2001. The original authority confirmed the demand of duty and imposed penalty of equal amount. Commissioner (Appeals) upheld the adjudication order.
2. Learned Advocate on behalf of the appellants submits that they reversed the credit in terms of Rule 6 of Cenvat credit Rules, 2001. He further submits that in the instant case, there is no removal of goods as such from the factory and, therefore, Rule 3(4) of the Cenvat Credit Rules, 2001 would not apply. He further submits that there is no suppression of facts and, therefore, extended period of limitation would not apply. He also submits that the Commissioner (Appeals) has not given any finding on limitation.
3. Learned D.R. reiterates the findings of the Commissioner (Appeals). He submits that in this case the appellants removed the duty paid inputs for repair of transformers and, Rule 3(4) of the Rules would apply. He also submits that transformer oil was used in repairing job of transformers of UPSEB and, they are liable to reverse the credit on the transaction value of UPSEB as required under Rule 3(4) of the Rules. He also submits that reversal of credit is in respect of two different rates which is not acceptable and, they are liable to reverse the credit on the basis of transaction value of UPSEB.
4. After hearing both sides and on perusal of the records, I find from the show cause notice that the appellants reversed the proportionate amount of credit availed against receipt of transformer oil on the quantity of transformer oil used in repair of old and damaged transformers. The appellant maintained separate records in respect of Transformer Oil used in manufacturing activities as well as repairing work as required under Rule 6 of the Rules. There is no material available to show that the appellants removed the transformer oil as such from their factory. Rule 3(4) of the Rules provides that when inputs or capital goods on which Cenvat credit has been taken are removed as such from the factory, the manufacturer of the final product shall pay an amount equal to the duty of excise which is leviable on such goods at appropriate rate to such goods on the date of such removal and on the value determined for such goods under Section 4 or Section 4A of the Act, as the case may be and such removal shall be made under the cover of central excise invoice referred in Rule 7. In the present case it is admitted fact that transformer oil used in the appellants own factory for repairing work and they have reversed the proportionate credit on their own and, therefore, Rule 3(4) cannot be invoked. Hence, demand of duty on the basis of transaction value of UPSEB is not sustainable.
5. In view of the above discussion, impugned order is set aside. Appeal is allowed with consequential relief.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK