Custom, Excise & Service Tax Tribunal
M/S. Saritha Sugars Ltd vs Cce, Guntur on 9 December, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 09/12/2010
Date of decision:09/12/2010
Appeal No.E/107/09
(Arising out of Order-in-original No.13/2008-C.Ex.(Commr.) dt. 12/12/2008 passed by CC,CE&ST, Guntur)
For approval and signature:
Honble Mr. M.V. Ravindran, Member(Judicial)
Honble Mr. B.S.V. Murthy, 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 the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Saritha Sugars Ltd.
..Appellant(s)
Vs.
CCE, Guntur
..Respondent(s)
Appearance Mr. G. Venkatesh, Advocate for the appellant.
Mr. D.P. Nagendra Kumar, Jt.CDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. B.S.V. Murthy, Member(Technical) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is directed against the Order-in-original No.13/2008-C.Ex.(Commr.) dt. 12/12/2008.
2. The relevant facts that arise for consideration are that the appellants herein are manufacturers of Sugar and molasses and discharging the appropriate applicable duty and are availing cenvat facilities under Cenvat Credit Rules, 2004. During the scrutiny of monthly returns relating to the months of May, 2006 to September, 2006, December, 2006 to January, 2007, it was noticed that the appellants took Cenvat Credit on capital goods and cleared the capital goods as such by reversal of such Cenvat Credit of an amount of Rs.84,34,974/-. Further scrutiny revealed that the credit availed was pertaining to the capital goods which were procured by the assessee during the financial years 2000-01, 2001-02 & 2002-03 respectively. The Revenue officers came to the conclusion that the appellants having not informed the Department regarding the receipt of these goods in the factory premises could not have availed the Cenvat Credit and cleared the same. Coming to such conclusion, a show-cause notice was issued for reversal of availment of ineligible Cenvat Credit and subsequent clearance of the same from the factory premises by utilizing the said credit is incorrect. Appellants contested the show-cause notice on various grounds including the point of limitation. Adjudicating Authority after considering the submissions made and following the principles of natural justice, did not agree with the contentions of the assessee, held against the assessee and passed the following order:-
Hence this appeal.
3.1. Ld. Counsel appearing on behalf of the appellants submits that the duty paid by the appellants at the time of clearance of the capital goods itself has to be treated as reversal of alleged ineligible credit, if any, and there cannot be any further demand of the duty. It is his submission that there is no dispute as regards the receipt of capital goods in the factory premises; verification was done by the jurisdictional Range officer to the premises as regards the availability of the said capital goods; the capital goods which were intended for the power project could not be brought into effect due to business exigencies and the capital goods were cleared in the same condition as they were purchased. He would submit that eligibility to Cenvat Credit cannot be disputed by the Department as the appellants had procured the capital goods on payment of appropriate duty and it was received in the factory of the appellants. It is the submission that the denial of the Cenvat Credit is only on the ground that the appellants intended to use these capital goods for production of electricity, which is a non-dutiable product and hence credit cannot be availed. It is his submission that Boards Circular dt. 3/4/2000 clearly indicate that in case of capital goods, receipt of the capital goods is sufficient to avail the credit. He would submit that all the conditions required for availment of Cenvat Credit as per the Cenvat Credit Rules were to be used for co-generation electricity plant. He would submit that the following decisions clearly laid down the law that credit can be availed on captive power plant.
a. Dalagunta Sugars Ltd. Vs. CCE [2006(199) ELT 760 (Tri. Bang.)] b. Bilt Industrial Packaging Co. Ltd. Vs. CCE [2007(216) ELT 217 (Tri. Chennai)] 3.2. It is also his submission that there is no time limit prescribed for availment of the credit in the current Cenvat Credit Rules and reversal of Cenvat Credit before utilization amounts to non-taking of credit. He would also submit that the entire case is hit by the limitation as they had been filing the monthly returns indicating clearly the Cenvat Credit availed on the capital goods and utilization thereof for discharging the duty liability on the same capital goods removed as such. It is his submission that an identical case of Coromandel Fertilizers Ltd. Vs. CCE [2009(239) ELT 99 (Tri. Bang.)], this Bench has held in their favour. He would also rely upon the decision of this Tribunal in the case of Grasim Industries ltd. Vs. CCE [2004(1640) ELT 348 (Tri. Del.)] as regards the eligibility to Cenvat Credit of the power plant used for generation of electricity and further used for producing or processing of final product.
4. Lt. Jt.CDR on the other hand would reiterate the findings of the ld. Commissioner.
5. We have considered the submissions made at length by both sides and perused the records.
6. The issue involved in this case is denial of Cenvat Credit of the duty paid on the capital goods, which were brought in by the appellant during the financial years 2000-01, 2001-02 & 2002-03, but could not install the same due to business exigencies.
7. It is undisputed that the capital goods which were procured and purchased by the appellants were for captive co-generation power plant. It is also undisputed that the said capital goods were duty paid when they were received in the factory premises of the appellants. It is also undisputed that the Range Officer had visited and found the availability of the capital goods in the factory premises. We find that the appellants submission that they could not start or install the co-generation power plant due to business exigencies is not disputed by the lower authorities. If that be so, the credit availed by the appellants on the said co-generation power plant and subsequent removal of the same as such cannot be faulted with.
8. As regards the Cenvat Credit on the parts of the power plant for assembling of power plant for generation of electricity, we find that the co-ordinate Bench of this Tribunal in the case of Grasim Industries Ltd. (supra) has clearly laid down that Cenvat Credit cannot be denied on the items which were used for assembling captive power generation plant and the power plant satisfied the criteria for the definition of capital goods. We also find that the Adjudicating Authority has sought to deny the Cenvat Credit only on the ground that credit was not availed immediately. We find that this Bench of the Tribunal in the case of Coromandel Fertilizers ltd. (supra) has clearly held that Further, we find that there was sufficient reasons for the appellants for not taking credit during the relevant period in view of the uncertainty in the matter. When the law is settled on the issue, there is no justification to deny the credit on the ground that it is availed after a long time. In any case, the Cenvat Credit Rules have not prescribed any outer time limit. In view of this, we do not find any merit in the impugned order. We set aside the same and allow the appeal with consequential relief.
9. We also find that the appellants have made out a case on the limitation aspect also as on perusal of the monthly returns filed by the appellants and as also the various documentary evidences, it indicates that the appellants have cleared the capital goods as such debiting the amount of credit availed and informed the Department in their monthly returns, no objections were raised at that juncture. We are of the considered view that the demand confirmed by the Adjudicating Authority by holding that the extended period of limitation applies in this case, is unsustainable as the appellants have been informing the authorities about their activities in the monthly returns.
10. In view of the above findings, we are of the considered view that the impugned order is not sustainable and is liable to be set aside and we do so. The impugned order is set aside and appeal is allowed with consequential relief, if any.
(Operative portion of this order pronounced on conclusion of the hearing) (B.S.V. MURTHY) MEMBER (TECHNICAL) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 7