Custom, Excise & Service Tax Tribunal
Cce, Indore vs M/S.Ruchi Soya Industries Ltd on 19 February, 2016
IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/decision:19.02.2016
Excise Cross Objection No.32/2007, COD No.11/2007 and in
Appeal No.3477/2006-EX(DB)
[(Arising out of Order-in-Appeal No.IND-I/277/2006 dated 31.01.2006 passed by the Commissioner (Appeals-I), Central Excise, Indore (M.P.)]
For approval and signature:
Honble Shri S. K. Mohanty, Member (Judicial)
Honble Shri B. Ravichandran, Member (Technical)
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Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
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Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
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Whether Their Lordships wish to see the fair copy of the Order?
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Whether Order is to be circulated to the Departmental authorities?
CCE, Indore .Appellants
Vs.
M/s.Ruchi Soya Industries Ltd. Respondent
Appearance:
Rep. by Shri Govind Dixit, DR for the appellant. Rep. by Shri R. Sudhinder, Advocate for the respondent. Coram: Honble Shri S.K. Mohanty, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No.51005/2016 dated:19/02/2016 Per B. Ravichandran:
The appeal by Revenue is against order dated 31.07.2006 of Commissioner (Appeals-I), Central Excise, Indore. The Respondents are engaged in the manufacture of soya/palm/palmolein refined oil and vanaspati. They are availing credit of duty paid on various inputs. They have not maintained separate accounts of receipt and utilization of inputs used in dutiable and exempted final products. Hence, proceedings were initiated against them to recover an amount equal to 8% of value of exempted goods in terms of Rule 6 of Cenvat Credit Rules, 2002. The exempted products cleared by them are acid oils, spent earth. The Original Authority confirmed a demand of Rs.5,49,009/- being 8% of value of exempted acid oil. Equal penalty was also imposed. There is another issue of improper accounting of goods received for reprocessing and cleared thereafter. A demand of Rs.s4,89,802/- was confirmed on the ground the quantity of refined oil obtained after reprocessing is not entered in the RG-I register.
2. On appeal, the Commissioner (Appeals) allowed the respondents appeal relating to demand of 8% amount on the value of exempted acid oil. He held that the respondents have reversed the entire credit taken in respect of Sulphuric Acid and hence there is no justification for a further demand of a percentage amount on exempted final products. On demand regarding improper maintenance of accounts of receipt of re-processed goods, the Commissioner (Appeals) remanded the matter to Original Authority. He observed that the respondents have maintained accounts and this required verification before a finding is arrived. He had set aside the penalties imposed by the Original Authority.
3. Aggrieved by this order, the Revenue is in appeal before us.
4. In the grounds of appeal, the Department contended that the Commissioner (Appeals) erred in holding that the respondents have used only Sulphuric Acid for the manufacture of Acid Oil. It is an admitted fact that the Acid Oil is manufactured from soap stock using Sulphuric Acid. The soap stock is a by-product emerging during the course of manufacture of refined oil and was exempted vide Notification No.115/75-CE. Various inputs like Phosphoric Acid, Caustic Soda, etc. are used in the manufacture of refined oil. Hence, reversing credit availed on Sulphuric Acid does not absolve the respondents from the liability to pay 8% of value of exempted goods. Regarding improper accounting of re-processed goods received, the Department contended that the respondent failed to prove that the goods received for re-processing were properly accounted for and hence, the Commissioner (Appeals) is not correct in setting aside the demand.
5. The respondent filed cross objections along with the application for condonation of delay in filing such cross objection. It was submitted that there was one day delay in filing such cross objection.
6. The respondent contended that Rule -6 will apply in respect of inputs, which are used by way of raw materials in the manufacture of principal product and not to the waste which incidentally emerge during process of manufacturing principal product. The soap stock emerges as inevitable incidental by-product and hence, the provision of Rule 6 is not attracted in such situation. Reliance was placed on the Tribunals decision in the case of Rama Industries Ltd. 2004 (178) ELT 720 (Tribunal-Delhi).
7. We have heard both the sides and examined appeal records.
8. We find that it is recorded in the impugned order that Sulphuric Acid has been used in the manufacture of Acid Oil from soap stocks. This process is separate and independent of manufacture of refined edible oils. During the manufacture of edible oils, the by-product viz. soap stock emerges. The present demand is for a percentage amount of exempted Acid Oil. The entire credit taken on Sulphuric Acid used in the manufacture of Acid Oil has been reversed by the respondents. We find no reason to interfere with the decision of the Commissioner (Appeals) in this regard.
9. Regarding the second issue of not maintaining proper accounts in respect of the products received for re-processing, the Commissioner (Appeals) observed that one to one correlation of returned goods as per the entries in the RG-I is not possible in a unit having huge turnover. He observed further that the appellants have entered all the returned goods in the RG-I and taken back the credit of excise duty paid. There is no need to maintain separate records for returned goods. The appropriate duty has been paid when the returned goods were cleared. The ld. Commissioner (Appeals) recorded that the respondents produced copies of RG-I register and the respondents claim regarding proper accounting appears to be correct. He directed the Lower Authority to examine the evidences produced by the respondents for a fresh decision. We find no infirmity in the findings of the Commissioner (Appeals).
10. Considering the above discussion and analysis, we find no merit in the present appeal by the Revenue. Accordingly, the same is dismissed. The cross objections and the misc. application for condition of delay are also disposed of.
[operative portion already pronounced in open court] ( S.K. Mohanty ) Member (Judicial) ( B. Ravichandran ) Member (Technical) Ckp.
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