Custom, Excise & Service Tax Tribunal
M/S. The Amaravathi Co-Operative Sugar ... vs Commissioner Of Central Excise, ... on 22 July, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.E/303/2006
[Arising out of Order-in-Appeal No.02/2006-CE dated 31.01.2006 passed by the Commissioner of Central Excise (Appeals), Coimbatore]
For approval and signature:
Honble Mr. P. KARTHIKEYAN, Member (Technical)
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 the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s. The Amaravathi Co-operative Sugar Mills Ltd.
Appellants
Versus
Commissioner of Central Excise, Coimbatore
Respondent
Appearance:
Shri K. Mani, Cons.
Shri M.K.A.K. Mohiddin, JDR For the Appellants For the Respondent CORAM:
Mr. P. Karthikeyan, Member (Technical) Date of hearing : 22.7.2008 Date of decision : 22.7.2008 Final Order No.____________ The appellants are engaged in the manufacture of sugar. In the year 2002, the appellants exported 39 consignments of sugar following the appropriate procedure. The goods exported had been cleared from a duty-paid godown, a little away from the factory premises. The sugar exported had been repacked in the godown in HDPE bags of capacity of 50 kgs. and 100 kgs. The appellants had taken duty paid on HDPE bags as CENVAT credit. The lower authorities found that the appellant had used these inputs outside the factory. The statutory provisions as interpreted by the apex court in the J.K. Udaipur Udyog Ltd. case reported in 2006 (194) E.L.T. 3 (S.C.) did not allow use of inputs outside the factory premises. In the impugned order, the Commissioner affirmed demand of credit on HDPEbags so used outside the factory to the extent of Rs.61,447/- and a penalty of Rs.5,000/- imposed on the appellants. The impugned order also sustained demand of appropriate interest on the credit irregularly availed.
2. The learned consultant submits that input credit could not be denied on the ground that the same was utilised outside the factory. The judgement in the case of J.K. Udaipur Udyog Ltd. (supra) relied on by the lower appellate authority had been overturned by a judgement of the apex Court in Vikram Cement Vs Commissioner of Central Excise, Indore reported in 2006 (194) E.L.T. 3 (S.C.). Therefore, the impugned order was not sustainable.
3. The learned JDR reiterates the findings of the Commissioner in the impugned order. He submits that the judgement of the apex court in the Vikram Cement case dealt with use of explosives (inputs) in mines etc. by cement factories and the ratio did not apply universally.
4. I have considered the rival submissions on the dispute. The impugned demand and penalty is on the sole ground that the appellants had used credit-availed inputs outside the factory. The HDPE bags had been taken to a godown located away from the factory where sugar had been packed in export packing of 50 kgs. capacity and 100 kgs. capacity. Export of sugar as per the prescribed procedure is not in dispute. The impugned order rests on the ratio of the apex courts judgement in J.K. Udaipur Udyog Ltd. case (supra).
5. I find that in the Vikram Cement case (supra) cited by the learned consultant, the apex Court had found as follows:
The schemes of MODVAT and CENVAT credit are not therefore, different and we are unable to agree with the conclusion of the court in J.K. Udaipur Udyog Ltd. that the decision in Jaypee Rewa Cement would have no application to CENVAT Rules Having regard to the fact that CENVAT Rules in fact substitute the MODVAT Rules, the decision in Jaypee Rewa Cement would continue to apply. The apex Court concurred with the view held in the Jaypee Rewa Cement (supra), that the relevant rules did not in any way specify that the inputs had to be utilised within the factory premises. In view of this settled position, the impugned order is not sustainable. Hence the same is set aside and this appeal allowed. (Dictated and pronounced in open court) (P. KARTHIKEYAN) MEMBER (T) ksr 22-07-2008 ??
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