Custom, Excise & Service Tax Tribunal
Koso India Pvt Ltd vs Commissioner Of Central Excise, ... on 23 October, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20230/2014 [Arising out of Order-in-Appeal No. CAL-EXCUS-000-App-011-13-14 dated 11.11.2013 passed by Commissioner of Central Excise (A), COCHIN] Koso India Pvt Ltd. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax, Cochin Respondent(s)
Appearance:
Shri Raghavendra, Adv.
For the Appellant Smt. Kavitha Podwal For the Respondent Date of Hearing: 12.10.2017 Date of Decision: 23.10.2017 CORAM:
HON'BLE SHRI S.S. GARG, JUDICIAL MEMBER Final Order No. 22500 / 2017 Per : S.S. GARG The present appeal is directed against the impugned order dated 11.11.2013 passed by the Commissioner (A) whereby Commissioner (A) has rejected the appeal of the appellant.
2. Briefly the facts of the case are the appellant is a manufacturer of industrial control valves and accessories falling under chapter head No.84 of the Central Excise Tariff Act. Process of manufacture of incidental or ancillary to the completion of the said products was carried out in Unit-II and Unit-I situated very nearby. Unit-II got registered with the department on 27.05.2003 and Unit-I got registered on 27.11.2007 on commencement of manufacturing activities. Subsequently, on 10.11.2009, a single registration was granted to both Unit-II and Unit-I. It was alleged that the appellant had contravened the provisions of Rule 4 (2) of Cenvat Credit Rules 2002 that during August 2008, they had availed 100% credit of capital goods on the basis of invoices received from Unit-II towards transfer of capital goods Credit under Rule 3 (5) of Cenvat Credit Rules 2004 since as per Rules they should have taken only 50% of the Capital goods Credit; they had availed excess credit of Rs. 15,32,821/-, education cess of Rs. 23,040/-, secondary and higher education cess of Rs. 14,469/- and that they are therefore liable to pay interest of Rs. 1,35,350/-; that they had taken 100% credit on investment casting dies received from M/s. Satyay Tehnocast (P) Ltd., Rajkot, treating it as input making them liable to pay interest of Rs. 1,908/-; that they had taken credit of Rs. 99,030/- on the basis of photocopies of invoices in violation of Rule 9 of Cenvat Credit Rules 2004; that they had availed Cenvat Credit of Rs. 2,44,933/-; education cess of Rs. 3,625/-; secondary and higher education cess of Rs. 1,813/- without proper documents.
3. Heard both the parties and perused records.
4. Learned Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the facts and documents on record. He further submitted that the impugned order is contrary to the binding judicial precedent on the same issue. He also submitted the originally appellant had one factory and due to the expansion of activities, they acquired a nearby factory and obtained one registration certificate from the Commissioner since the two factories are separated by a road only. He further submitted that when the machineries were originally received in the factory, they had only taken 50% of the credit in the year of receipt and the balance was taken only in the next financial year. He also submitted that the investment casting dies have been categorized as capital goods though such items are treated as inputs in their manufacturing process and that by oversight only they had treated the same as input and took 100% credit. Further, in respect of credit taken on the basis of Photostat copies, it was submitted by the Counsel that the courier bill of entry is a valid document for taking credit. He also submitted that the appellant has filed a certified copy of bill of entry which should be accepted as a proper bill of entry for the purpose of availing Cenvat credit. Further, in respect of issue of credit on input services, it was submitted by the Learned Counsel that if the transaction is bonafide, then the credit cannot be denied even if the duty paying documents are lacking in certain particulars.
5. On the other hand, the Learned AR reiterated the findings of the impugned order and submitted that the appellant had wrongly taken 100% credit during the year of receipt of capital goods in contravention of Rule 4 (2) (a) of Cenvat Credit 2004. He further submitted that with regard to input services credit has been taken without valid document prescribed under Rule (9) of Cenvat Credit 2004.
6. After, considering the submissions of both the parties, I find that as far as taking Cenvat credit on the basis of photocopy of the courier bill of entry is concerned, the appellants are entitled to claim the Cenvat credit on the basis of courier bill of entry and in support of this submission, I find that in case of Union of India vs. Hira Steels Ltd 2011 (273) E.L.T. 370 (Chattisgarh), Cenvat credit taken on photocopies has been held to be valid, as there is no dispute regarding the receipt of duty paid inputs under such invoices and their use in the manufacture of finished goods cleared on payment of duty. Further, as far as allegation regarding taking Cenvat credit of 100% in the first year of acquiring the capital goods, I find that the appellant has submitted that originally when the machinery was acquired in their factory, they had taken only 50% of the credit in the year of receipt and the balance 50% was taken only in the next financial year. Further, I find that Cenvat credit was taken but it was not utilized and therefore, in view of J&K Tyre & Industries Ltd., vs. Asst. Commissioner of C. Ex., Mysore 2016(340) E.L.T. 193 (Tri.-LB), relying upon the decision of the Karnataka High Court in the case of Commissioner vs. Bill Forge PVt. Ltd. reported in 2012 (279) E.L.T. 209, the appellant are not liable to pay interest and penalty. Further, I also find that credit has been denied with regard to input services on the ground that in the bill, service tax registration is not mentioned and further some of the bills are not in the prescribed format. In this regard, I have perused the bills of service providers excepting the service tax registration number all other details have been given in the bills. Further, I also find that even certificate of service tax registration has also been placed on record which shows that the service provider had the service tax registration at the time when the input service was provided to the appellant. Further, I find that in case of Standard Electrical Ltd. Vs. CCE 2002 (147) ELT 233 (Tri.-Del), it has been held as under:
Invoice containing essential particulars furnished by appellant. Suppliers invoice of earlier manufacturer also furnished in some cases to supplement information. Modvat credit admissible there being no dispute about receipt of inputs, duty paid character or their use in duty paid final product. Further, in the case of Bhulwalka Steel Industries Ltd. Vs. Commissioner 2007 (212) ELT 73 (Tri.-Mum) it has been held as under:
For the default of supplier of inputs receiver cannot be liable for penal action Credit taken on bonafide belief of duty payment Documents evidencing payment of excise duty amount to supplier by the appellant Precedents and CBE & C Circular applicable Cenvat credit admissible. Similarly, in the case of Mangalore Refinery and Petro Chemicals Ltd. Vs. Commissioner 2007 (216) ELT 43 (Tri.-Bng), it has been held that credit cannot be denied on mere technical grounds Rule 9 of Cenvat Credit Rules 2004. Similarly, in the case of Commissioner Vs. Techno Vision 2007 (219) ELT 942 (Tri.-Mum), it has been held that if the transaction is bonafide, credit could not be denied even if duty paying documents are invalid Rule 9 of Cenvat Credit Rules 2004. Therefore, by following the ratio of the above decisions, I am of the view that the impugned order is not sustainable under law and therefore I set aside the impugned order by allowing the appeal of the appellant with consequential relief if any.
(Order was pronounced in Open Court on 23.10.2017) S.S. GARG JUDICIAL MEMBER RB 5