Custom, Excise & Service Tax Tribunal
Nagpur vs Suryalaxmi Cotton Mills on 3 October, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: E/4155/2005
[Arising out of Order-in-Appeal No: SVS/381/NGP-II/2005 dated 27/10/2005 passed by the Commissioner of Customs & Central Excise (Appeals), Nagpur.]
For approval and signature:
Honble Shri Ramesh Nair, Member (Judicial)
Honble Shri C J Mathew, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
No
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Commissioner of Central Excise
Nagpur
Appellant
versus
Suryalaxmi Cotton Mills
Respondent
Appearance:
Shri V.K. Shastri, Asstt. Commissioner (AR) for the appellant Shri V.M. Doiphode, Advocate for the respondent CORAM:
Honble Shri Ramesh Nair, Member (Judicial) Honble Shri C J Mathew, Member (Technical) Date of hearing: 03/10/2016 Date of decision: 24/10/2016 ORDER NO: ____________________________ Per: Ramesh Nair:
The issue involved in the present case is that, due to the excisable goods become exempted, the appellant reversed CENVAT credit contained in the finished goods in process and final product. Part of the credit was reversed from CENVAT credit account and partly from PLA. Subsequently the appellant realized that CENVAT credit was not required to be reversed, they filed refund claim for an amount of ? 32,88,680/- and the same was rejected by the adjudicating authority vide order-in-original dated 26/04/2005. The respondent filed appeal before the Commissioner (Appeals) challenging the order-in-original and the learned Commissioner (Appeals) allowed the appeal of the appellant following the judgment of this Tribunal in the case of Commissioner of Central Excise, Rajkot v. Ashok Iron and Steel Fabricators 2000 (140) ELT 277 which was upheld by the Supreme Court as reported in 2003 (156) ELT A212 (SC). Aggrieved by the order of the Commissioner (Appeals) Revenue is before us.
2. Shri VK Shastri, learned Asstt. Commissioner (AR) appearing on behalf of the Revenue reiterated the grounds of appeal. He submits that since the respondent availed exemption Notification No. 30/2004-CE dated 09/07/2004 which contained the condition that the Notification shall not apply to the goods in respect of which credit of duty on inputs has been taken under the provisions of the CENVAT Credit Rules 2002. Therefore, the CENVAT credit reversed by the respondent is in confirmation with the condition of Notification No. 30/2004-CE. Therefore, there is no question of refund of the same. The Commissioner (Appeals) erred in allowing the appeal of the respondent.
3. Shri V.M.Doiphode, Learned Counsel for the respondent submits that the present case is not on the eligibility of the Notification No. 30/2004-CE but the issue is whether the respondent was required to reverse the CENVAT credit which was availed prior to issuance of the Notification. He submits that, as regard the provision for reversal of CENVAT credit in respect of the goods lying in stock with respect to the inputs contained in the finished goods and the provision was brought in the statute by insertion of sub-rule (3) of Rule 11 of CENVAT Credit Rules w.e.f. 01/03/2007 by way of amendment Notification No. 10/2007-CE(NT). Therefore, at the relevant period, in the present case, there was no provision for reversal of credit in case the products become exempted. He submitted that the very same issue has been settled in the following judgments.
i. Tractor and Farm Equipment Ltd v. Commissioner of Central Excise, Madurai II 2015 (320) ELT 357 (Mad.) ii. Commissioner of Central Excise, Bangalore v. Tafe Ltd (Tractor Division) 2015 (322) ELT 864 (Kar.) iii. Commissioner of Central Excise, Rajkot v. Ashok Iron and Steel Fabricators 2000 (140) ELT 277 (Tri.-LB) iv. Commissioner of Customs & Central Excise, Meerut I v. Apco Pharma Ltd. 2015 (319) ELT 641 (Uttarakhand)
4. We have carefully considered the submissions made by both the sides. We find that at the time of exemption Notification No. 30/2004-CE came into effect, there was no provision for reversal of credit in respect of inputs contained in the said exempted goods or lying as such for the reason that credit was availed prior to issuance of the exemption notification and at the time of availment of credit there was no bar and the CENVAT credit availed was correct and legal. As regards the provision for reversal of CENVAT credit in the aforesaid circumstances, the same was specifically inserted vide Rule 11(3) w.e.f. 01/03/2007, which cannot be applied retrospectively. The issue is squarely covered by the judgments cited by the learned counsel. We do not find any infirmity in the impugned order, hence, the same is upheld.
5. Revenues appeal is dismissed.
(Pronounced in Court on 24/10/2016) (C J Mathew) Member (Technical) (Ramesh Nair) Member (Judicial) */as 2 5