Custom, Excise & Service Tax Tribunal
M/S Maa Chintapurni Iron & Steel (I) Pvt. ... vs Cce, Thane-I on 25 September, 2014
IN THE CUSTOMS, EXCISE AND SERVECE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II APPLICATION NO. E/Extn./96252/14 IN APPEAL NO. E/878/11 (Arising out of Order-in-Appeal No. SB (75) 75/Th-I/2011 dated 21.02.2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-I.) For approval and signature: Honble Shri Anil Choudhary, Member (Judicial) =====================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy : Seen
of the order?
4. Whether order is to be circulated to the Departmental : Yes
authorities?
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M/s Maa Chintapurni Iron & Steel (I) Pvt. Ltd.
: Appellant
Versus
CCE, Thane-I
: Respondent
Appearance
Shri H.G. Dharmadhikari, Advocate
: For Appellant
Shri S.G. Dewalwar, Addl. Commissioner (A.R.)
: For Respondent
CORAM:
HONBLE SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL)
Date of Hearing : 25.09.2014 Date of Decision: 25.09.2014
ORDER NO.......................................................
Per: Anil Choudhary:
The present appeal is against the Order-in-Appeal No. SB (75) 75/Th-I/2011 dated 21.02.2011 passed by the Commissioner of Central Excise (Appeals), Mumbai-I.
2. The brief facts of the case are, that the appellant M/s Maa Chintapurni Iron & Steel (I) Pvt. Ltd. are manufacturer of CTD/TMT bars falling under Chapter Heading No. 72141090 and registered under Central Excise Registration No. AABCM9597NXM001. During the course of audit, conducted by Department it was observed that appellant had availed CENVAT credit of duty totally Rs. 4,74,895/- (4,65,580+9,315), on capital goods viz. Electric Motor, Metal Rolls, Rough forging rolls, Coil, Pulverizer Unit, Gear Box, Capacitors, Refractory, Bricks, Pinion and chokes and had claimed depreciation under Section 32 of Income Tax Act, 1961. On being pointed out by Audit, appellant had partly paid amount of Rs. 2,07,791/- (2,03,718+4,073) and had not paid the balance amount for period 2004-05 to 2007-08. The issue involved in the present appeal is of the availment of CENVAT credit of Excise duty paid on capital goods procured from second stage dealers. Wherein, the department has alleged that the appellant has availed the CENVAT credit of the duty paid on capital goods and has also availed the benefit of depreciation on the value of duty. Hence, CENVAT credit is liable to be denied in terms of sub-Rule (4) of Rule 4 of CENVAT Credit Rules, 2004.
3. Show-cause notice was issued to the appellant dated 29.09.2008, demanding amount of Rs. 2,67,104/- (2,61,862+5,242) for wrongly availing CENVAT credit and further demanding interest and penalty under Section 11AC of Central Excise Act, 1944 read with Rule 15(2) of CENVAT Credit Rules, 2004, and the show-cause notice was confirmed by the Assistant Commissioner. Appellant being aggrieved had filed an application for stay with appeal on 21.02.2009, wherein, the Commissioner (Appeals) had partly rejected the appeal and upheld the impugned order to the extent of CENVAT credit amounting to Rs. 71,844/- (Rs. 70,434 + 1,410) along with interest payable on Capacitors & Motors and had set aside the impugned order to the extent it relates to CENVAT credit amounting to Rs. 1,95,260/- (Rs. 1,91,428/- + 3,832) payable on CI Rails, Rolls & Pulverizer units. Also reduced penalty under Section 11AC of Central Excise Act, 1944 read with Rule 15 (2) of CENVAT Credit Rule, 2004, to Rs. 71,844/-
Aggrieved by the impugned orders, appellant is before this Tribunal.
4. The learned Counsel of the appellant have made following contentions.
4.1 Appellant contends that they have availed the CENVAT credit of excise duty paid on capital goods, but have not availed the benefit of depreciation on excise duty amounting to Rs. 71,844/-, which is denied and wrongly alleged by the department. In support to this, appellant has submitted the reconciliation statement and further states that on the same method of accounting when the Commissioner of Central Excise has allowed credit on CI Rails, Pulverizer unit, it should have also allowed the credit on motors & capacitors which are accounted for charging of depreciation net of Excise duty.
4.2 Appellant further demonstrates from the ledger abstract of the amount capitalized under electrical installation along with reconciliation statement clearly establishes that the amount of duty of which CENVAT credit is availed is not at all capitalized and the department has wrongly understood the invoice issued by first stage dealer namely, Makharia Machineries Pvt. Ltd.; which was prepared to facilitate the credit of excise duty paid by the original manufacturer, to be availed by the purchaser which was not a commercial invoice. Commercial invoice was issued separately considering the VAT amount which was disclose in ledger abstract of electrical installation. If all these, documents were harmoniously considered by the department than it would have been clear that the excise duty paid on electrical installation is not capitalized by the appellant, nor depreciation claimed on same.
4.3 Appellant further contends that as there was no supression of fact and the auditors have since raised the query only on basis of verification of records, which itself proves that proper record were maintained by the appellant. Hence penalty should not be imposed on them. It is a settled proposition of law that when demand is not sustainable, penalty is also not imposable. He relies on judgement passed by the Bangalore Bench of this Tribunal, SPARE Engineering Vs. CCE.
5. The ld. AR. for the Revenue, reiterates & relies on the impugned order.
6. Heard both the parties
7. Hearing heard the rival contentions, I hold, as is evident from the copy of documents produced, that CENVAT duty amount have not been debited in Asset Account, and no depreciation on CENVAT component is claimed. Thus, the appeal is allowed. The impugned order is set aside to the extent duty and penalty have been confirmed. Appellant will be entitled to consequential relief.
8. Extension application is dismissed as infructuous.
(Pronounced in open Court) (Anil Choudhary) Member (Judicial) Sp 2