Custom, Excise & Service Tax Tribunal
M/S. Jindal Poly Film Ltd vs Commissioner Of Central Excise on 21 July, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. I
Excise Appeal No. 710-712 of 2005
& E / 340/ 11
[Arising out of Order-in-Appeal No. 47/CEX/2004 dated 30.12.2004 passed by the Commissioner of Customs & Central Excise, Nashik ]
For approval and signature:
Hon'ble Dr. C. Satapathy, Member (Technical)
Hon'ble Mr. M.V. Ravindran, 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 : No
of the CESTAT (Procedure) Rules, 1982 for
publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair : Seen
copy of the Order?
4. Whether Order is to be circulated to the : Yes
Departmental authorities?
-------------------------------------------------------------------------------------------------
M/s. Jindal Poly Film Ltd. Appellants Shri Punit Gupta Shri Vishnu Gupta
Vs.
Commissioner of Central Excise Respondent
Nashik
Appearance:
Shri L.P. Asthana, Advocate for the Appellants
Shri R.K. Verma, DR for the Respondent
CORAM: Hon'ble Dr. C. Satapathy, Member (Technical)
Hon'ble Mr. M.V. Ravindran, Member (Judicial)
Date of Hearing/decision : 21.7.2011
ORAL ORDER NO . ________________________
Per M.V. Ravindran (for the Bench):
All these three appeals are directed against order in original No. 47/CEX/2004 dated 30.12.2004. Since the issue involved in appeal Nos. 711-712 is consequent penalty on the individuals, all these appeals are disposed of by a common order.
2. The relevant fact that arise for consideration are that the appellant company in Appeal No. E/710/2005 had procured imported capital goods for installation in their plant. The said import of the capital goods took place in the month of December, 2002 while the appellant took the 50% credit of CVD paid on such capital goods on 30.8.2003, i.e. after 8 months from the importation of the goods. Allegation in the show cause notice is that the appellant having taken the Cenvat credit has not put to use the said imported capital goods and few parts of the capital goods were missing from the said capital goods, as such, the appellant is required to reverse the amount of Cenvat credit taken by them. A Show cause notice was issued demanding the same. The appellants contested the show cause notice before the adjudicating authority. The adjudicating authority did not accept the contentions raised by the appellant company and came to conclusion that the demand needs to be confirmed, did it so, along with interest and imposed equivalent amount of penalty on the appellant company and penalty on two individuals.
3. Shri L.P. Asthana, learned counsel appearing for all the appellants submits that during the pendency of the proceedings, the appellants have paid the amount of Cenvat credit reversal confirmed by the adjudicating authority and have also paid the applicable interest. It is his submission that though on imports they are eligible for the credit, they are only challenging the imposition of penalty. It is his submission that the adjudicating authority has wrongly applied the provisions of Cenvat credit Rules. He would submit that the appellant company was eligible to avail Cenvat credit of first 50% and there is no bar for possession or installation or use of capital goods for availing of such credit. He submits that the penalty imposed by the adjudicating authority need to be set aside.
4. Shri R.K. Verma, learned SDR appearing for the Revenue would reiterate the findings of the adjudicating authority and submit that they should have taken the credit immediately on the date when they received the capital goods in the factory premises. It is his submission that there are violations of provisions of Cenvat Credit Rules due to which the penalties imposed are correct.
5. We have considered the submissions made at length by both sides and perused the records.
6. The undisputed facts are that the capital goods which were imported, were received in the factory premises of appellant assessee company. The appellant had discharged the customs duty and CVD payable on such imported capital goods.The appellant assessee company having received the capital goods in the factory premises were eligible to avail Cenvat credit of 50% of duty paid on such capital goods as per the provisions of Rule 4(2)(a) of Cenvat Credit Rules, 2002.
7. It is also undisputed that said capital goods are found in the factory premises as on date of issuance of show cause notice and that only few component parts of the said machinery were removed by the appellants on discharge of appropriate payment of duty. It is also undisputed that the appellant assessee had not availed balance 50% credit of CVD duty paid on such imported goods.
8. We find that the provisions of Cenvat Credit Rules, 2002 will be applicable in this case and more specifically Rule 4.
8.1 Rule 4(2)(a) of Cenvat Credit Rules, 2002 clearly stipulates availment of credit of 50% of the duty paid on capital goods in the same financial year. In the case in hand, the appellants had availed 50% of the CVD in the next financial year We do not find any bar in the said Rule for availment of Cenvat Credit of first 50% in the next financial year. Provision of Rule 4(2)(b) will not come into play in this case as the appellant had not availed the balance 50% of the amount of CVD paid on the imported capital goods.
9. At this juncture, we find that there is no provision of law which requires the appellant to reverse the Cenvat credit of first 50% availed for non installation or use of the machinery in the factory premises. In our considered opinion, the demand of duty would not have been sustained, but since the appellant is not contesting the same and as the appellants have already discharged the said confirmed demand along with interest we uphold that portion of the order which confirmed the demand and interest on such amount. Hence, the appeal of the appellant assessee company to that extent is rejected.
10. As regards the penalties imposed on the appellant company and other individuals, we find that they have not violated any provision of Cenvat Credit Rules for imposition of penalties, as we have already recorded that the appellants may eligible to avail Cenvat Credit of 50% of the amount of CVD paid. In view of this, there being no violation of Rules, the penalties imposed by the adjudicating authority on all the three appellants is unwarranted and is liable to be set aside, and we do so. That portion of the order which imposes penalties on all the three appellants is set aside.
11. The appeals are partly allowed as indicated herein above.
12. We find that Revenue had filed the Misc. application No. E/M/340/2011 for out of hearing for all these appeals. Since we have already disposed of all these appeals, the Misc. Application stands disposed of.
( Dr. C. Satapathy )
Technical Member
( M.V. Ravindran )
Member (Judicial )
ss
5