Custom, Excise & Service Tax Tribunal
M/S. S.L.B. Enterprises vs Cce, Meerut-Ii on 6 February, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Court No.II
E/Stay 2649/2011 in E/Appeal No.2008/2011
E/Stay 2650/2011 in E/Appeal No.2009/2011
(Arising out of order in appeal No2.91-92/CE/MRT-II/2011 dated 31.3.2011 passed by the Commissioner of Customs & Central Excise(Appeals), Meerut)
Date of Hearing: 6.2.2013
For Approval and signature:
Honble Mrs. Archana Wadhwa, Member Judicial
Honble Mr.Sahab Singh, Technical Member
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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
Department Authorities?
M/s. S.L.B. Enterprises Appellants
Vs
CCE, Meerut-II Respondent
Appeared for the Appellant: Shri R.M. Saxena, Advocate
Appeared for the Respondent: Shri A.K. Jain, DR
Coram: Honble Mrs. Archana Wadhwa, Member Judicial
Honble Mr. Sahab Singh, Member Technical
Stay Order No. 56174-56175/2013
Final Order No. 55552-55553
Per Archana Wadhwa:
After dispensing with the condition of pre-deposit in both the stay petitions, we proceed to decide the appeals itself as the dispute relates to factual position which can be verified only at the level of original authority.
2. After hearing both the sides, we find that the appellants had manufactured Menthol, Distilled Mentha oil and Piper Mint Oil which are dutiable products prior to 29.2.2008. With the issuance of Notification No. 4/2008-CE dated 1.3.2008, some of the appellants products became exempt. As such, the appellants reversed the credit of duty paid on the inputs which were lying in stock on the said date and were to be used in the manufacture of exempted products.
3. The dispute in the present appeals relates to availment of credit in respect of inputs received subsequently and utilized in the manufacture of exempted final products. Revenues case is that the appellant was not maintaining separate records for the inputs to be used in the manufacture of exempted as well as dutiable final product, they are liable to pay 10% of the value of the exempted final product in terms of provisions of Rule 6(3)(b). Accordingly, proceedings were initiated against the appellants which culminated into passing of the present impugned order.
4. Learned Advocate draws our attention to the submissions made by him before the authorities below submitting that after 1.3.2008, they had maintained separate records for inputs to be used in the manufacture of dutiable and exempted final products. Whereas the inputs to be used in exempted products are entered in Form IV register and no credit stands availed on the same, inputs required to be used in the manufacture of dutiable final products are entered in RG 23 Part I and credit stands availed in RG 23 Part II register.
5. While dealing with the above, the Commissioner (Appeals) has observed as under:-
The above arithmetical discussion necessitated because the appellant had disputed the amount confirmed by the adjudicating authority. As per the facts mentioned above, the appellant had wrongly availed the cenvat credit amounting to Rs. 17,74,063/- on the inputs intended for use in the manufacture of exempted goods and utilized the same for the payment of duty on the dutiable goods. The adjudicating authority had demanded the duty @ 10% of the value of the exempted goods. This demand is higher than the duty actually utilized. The Honble High Court of Gujarat in the case of Maize Products 2009 (234) ELT 431 (HC- Guj) has held that the reversal @ 10% is not required if the actual duty attributed on the inputs used in the exempted goods is ascertained. This finding was followed by the Honble CESTAT in the case of Peass Industrial Engineers Ltd 2010 (250) ELT 425 (T. Ahmed) in the instant case the actual duty utilized is ascertained for Rs. 17,74,063/-. Hence the demand of duty is reduced to Rs. 17,74,063/- from Rs. 35,03,696/-.
6. As is seen from the above, there seems to be no doubt that the inputs entered in both the registers were not considered to be cenvatable inputs. If that be so, the appellant seems to have a prima facie case. Otherwise also, it is the appellant contention that one of the common input is Mentha oil and as per various decisions, including the Honble Gujarat High Court judgment in the case of Maize Products 2009 (234) ELT 431 (HC-Guj), reversal of credit would not result in demand of 10% of value of exempted final product. In any case, Mentha oil is an agricultural product and question of availing credit does not arise.
7. In our view, the dispute relates to the factual position which is easily verifiable from the records maintained by the appellants. The lower authorities had not verified the records showing credit of duty availed by them. If that is done, it will become clear as to how much quantum of inputs stand utilized by the appellants in the manufacture of exempted final product on which no credit has been availed. This exercise is required to be done collectively by the Revenue with the cooperation of assessee. As such, we deem it fit to remand the matter to the adjudicating authority and direct him to find out the actual quantum of inputs on which the appellants had taken credit and the inputs on which they have not availed the credit and to re-decide the issue accordingly. The lower authorities would also consider the appellant plea that only common input is Mentha oil on which no duty has been paid, being a agricultural product. Their alternative submission that in any case credit involved on common inputs is required to be reversed instead of asking for 10% of the value of the final exempted product, would also be considered by the original authority.
8. At this stage, learned DR submits that as per the allegation in the show cause notice, they have not reversed even the credit in respect of input stock as on 1.3.2008. Learned Advocate submits that such reversal was subsequent to the issuance of the show cause notice and is not being agitated by the appellants. As the matter is being remanded, the original authority would examine the above aspect also. Both the stay petitions as also appeals get disposed of in the above manner.
(Order dictated and pronounced in the open Court.) (ARCHANA WADHWA) Member Judicial (SAHAB SINGH) Member Technical MPS* ??
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