Custom, Excise & Service Tax Tribunal
M/S The Simbhaoli Sugar Mills Ltd vs C.C.E., Meerut Ii on 27 April, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-IV SINGLE MEMBER BENCH Date of hearing/decision: 27.4.2010 Central Excise Appeal No.2707 of 2007-SM Arising out of the order in appeal No.148-CE/MRT-II/2007 dated 26.7.07 passed by the Commissioner (Appeals), Central Excise, Meerut II. For Approval and Signature: Honble Shri M. Veeraiyan, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 27 of 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes M/s The Simbhaoli Sugar Mills Ltd. . Appellant Vs. C.C.E., Meerut II . Respondent
Appearance:
Shri Kapil Vaish, Chartered Accountant for the appellant Shri S.N. Srivastava, Authorised Departmental Representative (SDR) for the Revenue Coram: Honble Shri M. Veeraiyan, Technical Member Oral Order No.____________________ Per M. Veeraiyan:
This is an appeal against the order of Commissioner (Appeals) No. 148-CE/MRT-II/2007 dated 26.7.07.
2. Heard both sides.
3. The appellant, a manufacturer of De-natured Ethyl Alcohol, Fusel Oil and Carbon dioxide, receiveed duty paid M.S. Shapes and Sections and duty involved was Rs.2,28,906/-.They took 50% of the said amount, that is Rs.1,14,454/-, as credit on capital goods during the month of September 2005. The original authority held that M.S. Shapes and Sections do not fall under the category of capital goods and hence disallowed the cenvat credit based on show cause notice dated 24th August, 2006.The appellant, on being informed of the objection by the Department, reversed the credit taken by them before issue of show cause notice. They also did not take the balance 50% of the credit. The original authority apart from confirming the demand of duty amounting to Rs.1,14,454/- along with interest imposed equal amount as penalty in terms of Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944.
4. Learned Chartered Accountant at the outset, on instruction from his clients, submits that they are not disputing the duty demand and interest. They have taken the credit bona fidely. On Department pointing out that they were not eligible for the credit, they have paid back the credit availed by them. There is no intention on their part to evade any tax. Even now the issue whether such Shapes and Sections could be treated as capital goods and eligible for credit is subject to differing interpretations and the matter is before the Larger Bench in the case of Vandana Global - 2008 (88) RLT 176. He submits that there is no justification for imposition of any penalty. In this regard, he relies on the decision of the Tribunal in the case of TISCO Ltd. vs. Commissioner of Central Excise, Jamshedpur reported in 2006 (199) ELT 855 (Tri-Mumbai).
5. Learned SDR reiterates the finding of the Commissioner (Appeals).
6. The duty demand along with interest is not being disputed. The only issue before me is whether, in the facts and circumstances of the case, penalty is warranted. The issue of eligibility of cenvat credit in respect of impugned goods has been a disputed one and the differing decisions have been ruling the field requiring reference to Larger Bench. Under these circumstances, the ingredients of suppression, mis-statement of facts etc. are not attributable to the assessee. In view of the above, I hold that penalty is not justified.
7. In view of the above, the appeal is disposed of by upholding the demand of duty along with interest as uncontested and by setting aside the penalty imposed.
(M. Veeraiyan) Technical Member scd/ 3