Custom, Excise & Service Tax Tribunal
M/S Rollex Electro Products Pvt. Ltd vs Cce, Delhi - Ii on 6 June, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi. Date of hearing/ decision: 06.06.2016 For Approval and Signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 26 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 Excise Appeal No. 212 of 2007 -Ex (DB) (Arising out of the Order in Appeal No. 67-CE/DLH/2006 dated 10.10.2006 passed by the Commissioner, Central Excise (Appeals), New Delhi). M/s Rollex Electro Products Pvt. Ltd. Appellant Vs. CCE, Delhi - II Respondent
Appearance:
Shri Naveen Mullick, Advocate for the appellant.
Shri Sanjay Jain, DR for the respondent.
Coram: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) Final Order No. 52076 / 2016 Per: V. Padmanabhan:
The present appeal is directed against the order of the Commissioner (Appeals), Delhi dated 29.09.2006, in which the original order dated 28.06.2002 was upheld. The appellant is a manufacturer of electric wire and cables falling under sub-heading 8544.90 of the Central Excise tariff. The appellant availed cenvat credit on raw materials such as aluminium rods, PVC resin copper etc. All these materials are sent out to the premises of job worker for conversion into aluminium wire and PVC compound. In the original proceedings, demand was raised as a result of objection raised in special audit of the appellant. Several small demands on various miscellaneous issues totalling Rs. 9338/- were raised which have not been challenged and hence stand confirmed. The serious challenge is against demand of Rs. 127934/- on the inadmissible modvat credit raised on the allegation of suppression of the exact quantity of input used. This figure has been worked out on the basis of input-output ratio arrived at by testing some samples of the products manufactured by the appellant. It has been held that in the impugned order an unreasonable amount of invisible loss at the hands of the job worker while conversion of PVC resin into PVC compound has been claimed. This is to the extent of 4.71% (aluminium wire) and 6.35% (PVC) as against normal losses of about 1%.
2. The appellant has assailed this demand on the following main grounds:
i) There is no evidence to suggest that the appellants have manufactured goods only in accordance with the sample drawn.
ii) The in-process material lying at various stages of manufacture has not been taken into consideration.
iii) There is no evidence to confirm excess consumption of raw material. There is also no evidence on record with regard to any clandestine removal of finished products. Accordingly, they have submitted that the confirmation of demand against the appellant is unjustified and arbitrary.
3. Ld. Counsel for the appellant reiterated the above points and prayed that the impugned order be set-aside.
4. Ld. DR on the other hand support the orders by the authorities below.
5. The modvat credit is allowed to be taken on receipt of inputs satisfying the conditions prescribed in the Central Excise Rules. Once such credit has been taken it is allowed to be utilised for payment of duty on the clearance of finished products/inputs. There is no provision in the said rules for restricting the credit taken for the reason that excess process loss has been claimed. A perusal of records of this case shows that the observation of excess process loss is supported by testing of a few samples of finished products. There is no justification for taking such percentage across the board for all products in the light of the contention of the appellant that they manufacture different types of goods and the process loss may vary depending upon the design of the product and even the reasons. There is nothing on record to substantiate clandestine clearance of finished products or even diversion of inputs without using the same in the manufacture of the finished products. Under such circumstances we are of the view that the confirmation of demand is unsustainable. Accordingly, the demand raised by the authorities below is set-aside except to the extent of Rs.9338/- which has not been challenged.
(Operative part of the order pronounced in the open Court).
(Archana Wadhwa) Member (Judicial) (V. Padmanabhan) Member (Technical) Pant