Custom, Excise & Service Tax Tribunal
M/S Rupa & Co. Ltd vs Commr. Of Central Excise, Kol.I on 8 June, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, EAST REGIONAL BENCH : KOLKATA
Ex. Appeal No.229/06
Arising out of O/O No.CCE/Commr./Kol.I/Adjn./No.01/2006 dated 27.01.2006 passed by Commissioner of Central Excise, Kolkata I Commissionerate.
For approval and signatures:
SHRI S. S. KANG, HONBLE VICE PRESIDENT
SHRI M. VEERAIYAN, HONBLE TECHNICAL MEMBER
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 Rupa & Co. Ltd.
APPELLANT(S)
VERSUS
Commr. of Central Excise, Kol.I
RESPONDENT (S)
APPEARANCE Shri J. P. Khaitan, Sr. Advocate and Shri P. Banerjee, Advocate for the Appellant (s) Shri A. K. Sharma, JDR for the Department CORAM:
SHRI S. S. KANG, HONBLE VICE PRESIDENT SHRI M. VEERAIYAN, HONBLE TECHNICAL MEMBER Date of hearing & decision : 08. 06. 2010 ORDER NO..
Per Shri S. S. Kang :
Heard both sides. The appellants filed this appeal against the impugned order whereby the credit of Rs.61,35,312/- was disallowed by the adjudicating authority.
2. Brief facts of the case are that the appellants are engaged in the manufacture of hosiery goods. W.e.f.1.4.2003, the Central Excise duty was imposed in respect of hosiery goods and the Cenvat Credit has also allowed in respect of the inputs, lying in stock or in process or contained in finished products lying in stock as on 31st March,2003 by introducing Rule 9A of Cenvat Credit Rules, 2002 by way of transitional provisions for Textile Articles. As per the provisions of Rule 9A of Rules, the manufacturer was to file a declaration on or before 15th June, 2003 in respect of the inputs lying in stock, contained in the goods under process or contained in finished products. The Rule further provides that the manufacturer can claim credit of actual duty paid in respect of inputs subject to availability of the documents evidencing actual payment of duty. Sub-rule (2) of Rule 9A of Rules further provides that in case the manufacturer who is unable to produce the document evidencing actual payment of duty, is entitled to avail deemed credit in respect of the inputs lying in stock or in process or contained in finished goods as per formula provided under Notification 35/03-CE. The appellants filed a declaration on 4.6.2003 claiming the amount of Rs.19,75,985/- in respect of the yarn contained in the finished goods as deemed credit in view of the provisions of Sub-rule (2) of Rule 9A of the Rules. Subsequently, the appellants on 11.7.2003 claimed the benefit of the credit in view of the provisions of Sub-rule (1) of Rule 9A of the Rules of amount of Rs.81,11,297/- in respect of yarn contained in the finished goods on the ground that they have the documents showing payment of duty on the inputs contained in the final products. Before the adjudicating authority, the appellants conceded that they have only documents regarding payment of duty on the inputs to the extent of Rs.55,12,633/- as against actual claim of Rs.81,11,297/-. The adjudicating authority in the impugned order rejected the claim of the appellants on the ground that they failed to produce the documents showing actual payment of duty in respect of the inputs contained in the final products and the documents produced by the appellants are not valid duty paying documents.
3. The contention of the appellants is that the appellants produced the invoices issued by the consignment agents showing clearance of the goods i.e. yarn and as per the provisions of Rule 7 of the Cenvat Credit Rules, 2002, the Cenvat credit can be taken on the basis of the documents, such as, invoices issued by the manufacturers or from the premises of the consignment agents of the manufacturer or from any other premises from where the goods were sold by, or on behalf of the said manufacturer. The contention is that as the invoices are issued by the consignment agents on behalf of the manufacturer, hence, the findings of the adjudicating authority that the invoices issued by the consignment agent in respect of valid duty payment documents are not sustainable. The appellants also produced certificate from the manufacturer in respect of the duty payment on yarn supplied to the consignment agents and subsequently, the same were supplied to the appellants. The contention is that the appellants proved that the actual duty payment is in respect of the yarn by producing certificate and by producing invoices issued by the manufacturer showing payment of duty, hence, the credit is permissible to the appellants as per the provisions under Sub-rule (1) of Rule 9A of the Cenvat Credit Rules,2002. The appellants also relied upon the decisions of the Tribunal in the cases of M/s Rupa & Co. Vs. Commissioner of Central Excise, Coimbatore reported in 2008 (225) ELT 552 (Tri.-Chennai) and Commissioner of Central Excise, Kanpur Vs. L & H Sugar Mills Ltd. reported in 1999 (105) ELT 368 (Tribunal.).
4. The ld.JDR for the Revenue submitted that as per the provisions of Rule 9A of Cenvat Credit Rules, 2002, which are transitional provisions for Textile and Textile Articles, the manufacturer has to file declaration on or before 15th June, 2003 claiming the credit in respect of the inputs lying in stock or in process or contained in finished products on actual basis by producing the duty paying documents or as provided under Sub-rule (2), in case the manufacturer is not having duty paying documents, the manufactuer is entitled for deemed credit. The appellants first filed declaration under Sub-rule (2) of Rule 9A of the Rules in respect of the yarn contained in the entire quantity of finished goods and claimed deemed credit of Rs.19,75,985/-. Subsequently, after due date on 11.7.2003, the appellants claimed credit as per the provisions of Sub-rule (1) of Rule 9A of the Cenvat Credit Rules and claimed the credit of Rs.81,11,297/- in respect of the inputs contained in the finished goods and before the adjudicating authority, the appellants only claimed the benefit to the extent of Rs.55,12,633/-. The documents relied upon by the appellants were issued by the consignment agents and majority of the documents does not contain particulars regarding payment of duty. The documents relating to the months of August and October, 2002, whereas the appellants claimed the benefit of credit on the basis of invoices as on 31.3.2003. The contention is that as the declaration claiming actual Cenvat credit was filed after the due date and only produced documents issued by consignment agents without containing duty payment particulars, hence, the credit is rightly denied.
5. We find that the appellants first filed the declaration claiming benefit of deemed credit as provided Sub-rule (2) of Rule 9A of the Rules and subsequently, after the due date as provided under Sub-rule (4) of Rule 9A of Rules, the appellants claimed the benefit of actual payment of duty on the inputs contained in the finished goods as provided under Sub-rule (1) of Rule 9A of the Rules. For ready reference, the required portion of Rule 9A is reproduced below :
Rule 9A. Transitional provisions for Textile and Textile Articles.- (1) [A manufacturer, producer, first stage dealer or second stage dealer of goods falling under Chapter 50 to 63 of the First Schedule to the Tariff Act ] shall be entitled to avail credit equal to the duty paid on inputs of such finished product, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of inputs (whether lying in stock or in process or contained in finished products lying in stock) and subject to availability of the document evidencing actual payment of duty thereon.
(2) Notwithstanding anything contained in sub-rule (1), the manufacturer, producer, first stage dealer or second stage dealer, as the case may be, referred to in the said sub-rule, who is unable to produce the document evidencing actual payment of duty, shall be entitled to avail credit, calculated in a manner referred to in sub-rule (3), on inputs falling under Chapters 50 to 63 of the First Schedule to the Tariff Act, lying in stock or in process or contained in finished products lying in stock as on 31st day of March, 2003 upon making a written declaration of the description, quantity and value of the stock of each of such goods. The declaration made under this sub-rule shall exclude quantity of stock declared under sub-rule (1).
(3) (a)..
(b)..
(i)
(ii)..
.
(4) The declaration referred to in this rule shall be made on or before the 15th day of June, 2003.
6. The claim of the appellants prior to due date i.e. on 15th June, 2003, was under Sub-rule (2) of Rule 9A of the Rules and the total credit claimed was of Rs.19,75,985/-. Subsequently, after the due date i.e. on 11.7.2003, the appellants claimed the credit of Rs.81,11,297/- in respect of the inputs contained in the finished goods on the ground that they have documents of the actual payment of duty. The claim was scrutinized by the Revenue and before the adjudicating authority, the appellants only claimed the benefit to the extent of Rs.55,12,633/.
7. We find that a major part of the claim is on the basis of the invoices issued by the consignment agent and without duty payments particulars. The appellants tried to correlate to duty payment by producing certificate of consignment agents or by manufacturer. We find that the invoices are issued by the consignment agents much prior to 31.3.2003 i.e. for the months of August and October, 2002 and the appellants claimed the credit in respect of the yarn contained in the finished products as on 1.3.03 and there is no evidence on record that the goods manufactured out of the yarn received in August, October, 2002, were still in the stock.
8. Further we find that Rule 9A of Rules provides that the manufacturer has to file declaration prior to the due date in respect of the claim under Sub-rule (1) and in respect of Sub-rule (2), the declaration made under sub-rule (2) shall exclude quantity of stock declared under Sub-rule (1). Meaning thereby that the appellant has to file one declaration under Sub-rule (1) claiming the credit in respect of inputs on actual basis showing documents evidencing actual payment of duty and other declaration under Sub-rule (2) where the documents are not available with the manufacturer for deemed credit and the declarations are to be filed on or before 15th June, 2003 as provided under Sub-rule (4). The claim of the appellant under sub-rule (1) of Rule 9A of Rules is after the due date.
9. The appellants relied upon the decision of the Tribunal in the case of M/s Rupa & Co. (cited supra) where the credit was declined merely on the ground that the invoice was issued by un-registered depot of the manufacturer. In the other case relied upon the appellants, i.e., the Commissioner of Central Excise, Kanpur Vs. L & H Sugar Mills Ltd. (cited supra), we find that the credit was denied as the invoice was issued by the un-registered dealer and the Tribunal held that the burden placed on the dealer which is impossible to discharge, hence, the matter was remanded. Therefore, the ratio of the above decisions is not applicable to the facts of present case.
10. In view of the above discussions as the declaration under sub-rule (1) of Rule 9A was filed after due date and the appellants failed to produce the necessary documents showing payment of duty, we find no infirmity in the impugned order and the appeal is dismissed.
(Dictated and pronounced in the open Court)
Sd/ Sd/
(M. VEERAIYAN) (S. S. KANG)
TECHNICAL MEMBER VICE PRESIDENT
mm/
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Ex.Appeal No.229/06