Custom, Excise & Service Tax Tribunal
M/S. Kandhari Beverages Pvt. Ltd vs Cce, Chandigarh on 7 June, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI PRINCIPAL BENCH, COURT NO. III Excise Appeal No. 872 of 2011-SM(BR) [Arising out of Order-In-Appeal No 184/CE/Chd-I/2010 dt. 15.12.2010 passed by Commissioner of Customs & Central Excise (Appeals), Chandigarh ] For approval and signature: Honble Ms. Archana Wadhwa, 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 should 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. Kandhari Beverages Pvt. Ltd. Appellants Vs. CCE, Chandigarh Respondent
Appearance:
Shri J P. Kaushik, Advocate for the Appellant Shri R.K. Mathur, AR for the Respondents CORAM:
Hon'ble Ms. Archana Wadhwa, Member (Judicial) Date of Hearing : 07.06.2013 ORDER NO .FO/ 56572 /2013-SM(Br) Per Archana Wadhwa:
After hearing both sides, I find that the appellants are engaged in the manufacture of different kinds of aerated water. They were using furnace oil as fuel in their captive power plant for generation of steam. Such steam was being used by them in the manufacture of dutiable as well as exempted final products.
2. In terms of Rule 6(2) of Cenvat Credit Rules, the appellants were not maintaining any separate accounts as the Rule itself provided that no separate accounts are required to be maintained in respect of furnace oil used as fuel. However, as the appellant had availed the Cenvat credit in respect of entire quantity of furnace oil which was used for generation of steam, which in turn was used in the manufacture of dutiable as well as exempted final products, Revenue initiated proceedings against them for recovery of proportionate Cenvat credit. Such proceedings were initiated by way of issuance of show cause notice dated 15.1.09 for the period February, 2004 to May, 2005. The same was contested by the appellants but culminated into impugned orders passed by the authorities below confirming the demand and imposition of penalty.
3. It is seen that during the relevant period, the provisions of Rule 6(2) were the subject matter of various decisions of Honble High Court as also by the Larger Bench of the Tribunal. Honble Punjab and Haryana High Court in the case of Commissioner of Central Excise, Ludhiana vs. Nestle India [2010 (250) ELT 341 (P&H)] held that there is no requirement of reversal of credit availed on the fuel which stand used in the manufacture of dutiable as well as exempted final product. To the similar effect is the decision of Honble Gujarat High Court in the case of CCE vs. Charak Pharma P. Ltd. [2012 (278) ELT 319 (Guj)]. Larger Bench of the Tribunal in the case of Gujarat Narmada Fertilizers Co. Ltd. reported in [2007 (208) ELT 342 (Tri-LB)] also held that inasmuch as sub-rule (2) of Rule 6 of Cenvat Credit Rules does not require separate maintenance of records in respect of fuel, there is no requirement of proportionate reversal of credit when such fuel is ultimately used in the manufacture of exempted products.
4. When the said Larger Bench of the Tribunal was appealed against by the Revenue it stand over-ruled by the Honble Supreme Court in the case of Commissioner of Central Excise vs. Gujarat Narmada Fertilizers Co. Ltd. [2009 (240) ELT 661 (SC)]. Learned advocate appearing for the appellant fairly agrees that the issue on merits stands finally settled against the appellant by the said decision of the Honble Supreme Court. However, he submits that during the relevant period, there were decisions in favour of the assessee and as such, no malafide can be attributed to the appellant, in which case, extended period of limitation would not be applicable. Inasmuch as the demands stand raised in the year 2009 for the year 2004-2005, the same is hopelessly barred by limitation.
5. By considering said argument of the learned advocate, I find that the Tribunal in the case of Diamond Cements Ltd. vs. CCE Bhopal [2012 (283) ELT 226 (Tri-LB)] has held that when during the relevant period, the decision of the Higher appellate forums were in favour of the assessee, no suppression can be alleged against the assessee. Admittedly, in the present case the Honble Punjab and Haryana High Court, the Honble Gujarat High Court as also the Larger Bench of the Tribunal has interpreted the provisions of Rule 6(2) of Cenvat Credit Rules in a manner that no reversal liability of Cenvat credit would arise in respect of assessee where no separate accounts are being maintained in case of fuel which is being used for dutiable as also for exempted final product. If the expert bodies, judicial as well as quasi judicial, have interpreted the law in favour of the assessee, the assessee cannot be held guilty of any suppression or mis-statement etc. Inasmuch as the show cause notice stand issued by invoking the longer period of limitation, I hold that demand is barred by limitation. Accordingly, the impugned order is set aside on this ground and appeal allowed with consequential relief to the appellant.
(Pronounced in the open court )
( Archana Wadhwa ) Member(Judicial)
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