Custom, Excise & Service Tax Tribunal
Hubergroup India Pvt Ltd vs Daman on 26 April, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
REGIONAL BENCH - COURT NO. 03
Excise Appeal No. 12488 of 2019
[Arising out of OIO-05-T-REMISSION-DAMAN-2019 dated 31/07/2019 passedby
Commissioner of Central Excise, Customs and Service Tax-DAMAN]
HUBERGROUP INDIA PVT LTD .....Appellant
Survey No. 11 & 13, Village- Morkhal
Silvassa
Dadra And Nagar Haveli
VERSUS
C.C.E. & S.T.-DAMAN .....Respondent
3rd Floor...Adarsh Dham Building, Vapi-Daman Road, Vapi Opp.Vapi Town Police Station, Vapi Gujarat- 396191 APPEARANCE:
Shri Suriyanaraynan, Advocate for the Appellant Shri Ghanshyam Soni, Joint Commissioner (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR FINAL ORDER NO.A / 10400 /2022 DATE OF HEARING: 26.04.2022 DATE OF DECISION: 26.04.2022 RAMESH NAIR The issue involved in the present case is that whether the appellant is required to pay a Cenvat Credit in respect of inputs though issued for production lying in shop floor but not used for the production and the same was destroyed in fire. The Learned Commissioner Competent Authority for granting the remission of duty in respect of destruction of Goods, held that the input though issued but not used in the manufacture hence remained as such. Therefore, in respect of destruction thereof the appellant is required to pay the amount of Cenvat Credit. Being aggrieved by the said order of the Commissioner, appellant filed the present appeal.
2. Shri Suriyanaraynan, Learned Counsel appearing on behalf of the appellant submits that the subject input though lying as such but the same was issued for production and was admittedly lying on the shop floor. Once
2|Page E/12488/2019 the input was issued for production. Even though the same is not used the same is treated as work in progress. Therefore, the goods destroyed in work in progress no demand can be made in respect of Cenvat Credit of the said input. He placed reliance on the following judgments:
Pluto Plastics Private Ltd and Another Vs. CCE-2017 (6) TMI 320- CESTAT Mumbai RSWM Ltd Vs. CCE-2015 (327) ELT 216 (Tri.-Delhi) CCE Vs. Fenner India Ltd.-2014 (307) ELT 516 (Madras)
3. Shri Ghanshyam Soni Learned Joint Commissioner Authorized Representative appearing on behalf of the revenue reiterates the findings of the impugned order. He also placed reliance on the following judgments:-
BIOPAC INDIA CORPN. LTD. VS. COMMISSIONER OF CENTRAL EXCISE, VAPI [(2008 (224) ELT 548 (TRI.-ABAD)] COMMISSIONER OF C.EX. AND CUSTOMS VS. BIOPAC INDIA CORPORATION LTD [2010 (258) ELT 56 (GUJ-HC)] COMMR. OF C. EX. & CUS., AHMEDABAD-II Versus INTAS PHARMACEUTICALS LTD. [2013 (289) ELT 256 (Guj.-HC)] SHREE RAMA MULTI-TECH LTD. Versus COMMISSIONER OF C. EX & CUSTOMS [2016 (331) ELT 348 (Guj-HC)]
4. I have carefully considered the submission made by both the sides and perused the records. I find from the impugned order that the Learned Commissioner has granted the remission of duty in respect of Goods which is in work in progress. It is also not in dispute that the input in question had been issued for production and the same was lying on the shop floor. The same was admitted by the Commissioner in his order. The reason for not granting the remission is that even though the input was issued for production and lying on shop floor but the same was in form of input as such. Therefore, it was contended that the same was not used in the production. Accordingly, the remission was not granted. I find that even though the inputs were not put to use in the production but the input were
3|Page E/12488/2019 issued for the production and was in the progress of use in the manufacturer of final product. Once the input has been issued for the production and lying on shop floor. The same should be treated as work in progress. Consequently, the demand of Cenvat Credit cannot be made. In the case of work in progress the specific issue has been considered by this Tribunal in the case of RSWM Ltd Vs. CCE-2015 (327) ELT 216(Tri.-Del.) (Supra), Wherein following order was passed:-
"5.I have carefully considered the submissions from both the sides and perused the records I find that the legal issue on the disputed point stands settled and it is only the factual position, which needs to be examined As such, is to be seen as to whether the inputs were destroyed when they were stored as such in the puts store room or whether, when the same was issued for further processing and were destroyed in the blow room, they have to be held as inputs in process.
6.Report from the Superintendent was called for and stand placed by him before the Bench vide his letter dated 8-5-2009 it stand recorded as under:-
"It is to inform that the raw material i.e.fiber/Dyed fiber was burnt in the fire incident. The above said raw material was kept in the blow room Athough the fiber was issued to the blow room but it appears that no process was undertaken thereon by the assessee so I cannot be sad that the fibre was processed material. Hence fibre burnt in fire was in the nature of input as such on which no process was undertaken by the assessee Shri SN Sadhu Executive (Excise) of the assessee in his statement dated 24-3-2007 recorded under Section 14 of Central Excise Act 1944 has also stated that the raw material i.e. fibre kept in blow room burnt in fire incidents occurred on 3-2-2004 and 12-2- 2005. Further it is informed that in case of fire incident occurred on 3-2-2004, the assessee has also claimed expenses towards dying and processing charges so fibre burnt on 3-2-2004 might be processed fibre."
7. As is seen from above, inputs were admittedly issued from the raw materials stock and were destroyed when the same were in the blow room. As such it can be held that the inputs were under process Further the appellant have also claimed the expenses towards dying and process purchases thus landing support to the stand in view of the above there is no legal obligation, on the part of the appellant to reverse the Canvat credit so availed by them. Accordingly, I set aside the impugned order and allow the appeal with consequential relief to the appellant."
From the above decision it can be seen that the facts in that and present case is absolutely identical that though the input was not used and issued for
4|Page E/12488/2019 production, the demand of Cenvat Credit thereon was set aside. As per my above discussion and taking support of the above decision the demand of Cenvat Credit in respect of inputs issued for production and lying in shop floor is not sustainable. Hence, I set aside the impugned order and allow the Appeal.
(Dictated & Pronounced in the open Court) RAMESH NAIR MEMBER (JUDICIAL) Palak