Custom, Excise & Service Tax Tribunal
Andhra Pradesh Paper Mills Ltd vs Commissioner Of Central Excise, ... on 18 March, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL:SOUTH ZONAL BENCH: BANGALORE Final Order No. 20414 / 2014 Application(s) Involved: E/MISC/290/2011 in E/433/2007-DB Appeal(s) Involved: E/433/2007-DB [Arising out of Order-in-Appeal No. 128/2006 dated 23/12/2006 passed by the Commissioner of Central Excise and Customs, Visakhapatnam] Andhra Pradesh Paper Mills Ltd. APPM, Rajahmundry E.G. Dist. Andhra Pradesh Appellant(s) Versus Commissioner of Central Excise, Service Tax and Customs - Visakhapatnam-II Central Excise Building, Port Area, Visakhapatnam - 530 035, Andhra Pradesh Respondent(s)
Appearance:
Mr. C. Saravanan, Advocate No. 12 (Old No. 22), 1st Floor, V Block, 14th Street, Anna Nagar, Chennai - 500 040 For the Appellant Mr. S. Teli, AR For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 18/03/2014 Date of Decision: 18/03/2014 Order Per: B.S.V. MURTHY Appellant is a paper mill. The used drier screen felts were sold by them during the period from 01.05.2000 to 31.12.2004. Taking a view that appellant should have paid duty treating the clearances as clearance of felts as such and therefore entire credit availed should have been reversed, proceedings were initiated taking a view that prior to introduction of CENVAT Credit Rules 2001, the appellant should have paid excise duty on these clearances on transaction value and subsequent to that period the entire amount should have been reversed culminating in the demand for duty of Rs. 1,95,351/-. Even though detailed submissions were made on merits and the amount is payable on what basis etc, etc, we consider that the issue can be decided on the ground of limitation itself and therefore we are not going into detailed discussion, relevant statutory provisions and the interpretation thereof for the liability of the appellant. In this case for the period from 1995-2000, a show-cause notice had been issued to the appellant to demand duty on various scrap items sold by them and at that time the used dryer screen felt even though the same was being sold was completely omitted. Thereafter from 2000 onwards according to the records produced before us, the appellant was intimating the department as and when they cleared the metal scrap, used dryer screen felt etc. They were also submitting a copy of the invoice and the amount realized. Same way in March 2002 Superintendent in-charge of the appellant advised them not to submit invoices relating to the sale of used dryer screen felts. The above facts emerging from the records would show that even the departmental officers felt that there was no duty liability on the used dryer screen felts cleared by the appellant and therefore the steps as mentioned above were taken. That being the position, we find it extremely difficult to agree with the observations made by the lower authorities that appellants have deliberately and intentionally evaded payment of duty, suppressed facts and sold them without intimating to the department. Therefore in our opinion extended period could not have been invoked in this case.
2. As regards the duty demand within the normal period, we find that only one sale covered by the invoice dated 16.07.2004 involving value of the felt of Rs. 43430/- would be liable to excise duty. In the decision of the Tribunal in the case of CCE, Hyderabad-III Vs. Navodhaya Plastic Industries Ltd. [2013 (298) E.L.T. 541 (Tri.-LB)], the Tribunal had taken a view in para 10 which we reproduce for better appreciation.
10. The use of capital goods is to spread over many years. A decision to the effect that assessees can bring in capital goods, use it for a few days and then remove it without reversal of any CENVAT credit taken is not consistent with the overall scheme of CENVAT credit and can lead to abuse of the scheme. Considering this aspect and the legislative history and the Circular of C.B.E & C., we are of the view that we should respectfully follow the decision of the Honble Madras High Court in the case of Commissioner of Central Excise, Salem V. Rogini Mills Ltd. (supra) and the reference made to this Larger Bench is answered accordingly.
3. From the discussion above, we find that appellant would be liable to pay duty in terms of para 8 of the decision of the Larger Bench of this Tribunal in the case of Navodhaya Plastic Industries Ltd. (supra) For better appreciation we reproduce the same.
8. During the period when similar provision was in force C.B.E. & C had issued Circular No. 643/34/2002-CX., dated 1.7.2002 to the effect that credit amount to be reversed will be reduced by 2.5% per quarter of use of the machinery.
4. In the facts and circumstances, there will be no penalty, the interest applicable from the date of liability till the date of payment is also payable. The appeal is disposed of in the above terms.
(Order dictated and pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER iss