Custom, Excise & Service Tax Tribunal
M/S Sun Pharmaceuticals Industries Ltd vs C.C.E. & S.T.-Vadodara-Ii on 8 March, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Zonal Bench 2nd Floor, Bahumali Building, Nr Girdharnagar Bridge, Asarwa Ahmedabad 380 004 Appeal No. : E/10036/2018 Arising out of OIA-VAD-EXCUS-002-APP-124-2017-18 dt 01/06/2017 passed by the Commissioner ( Appeals ) Central Excise, Customs and Service Tax-VADODARA-I M/s Sun Pharmaceuticals Industries Ltd - Appellant(s) Vs C.C.E. & S.T.-Vadodara-ii - Respondent(s)
Represented by For Appellant(s) : Shri C S Huzefa Shakir, Company Secretary For Respondent(s): Shri Amit Mishra, Authorised Representative CORAM :
Dr D.M. Misra, Hon'ble Member (Judicial) Date of Hearing / Decision : 08/03/2018 ORDER No. A/10542 / 2018 Per : Dr D.M. Misra, Heard both sides.
2. This appeal is filed against OIA-VAD-EXCUS-002-APP-124-2017-18 dt 01/06/2017 passed by the Commissioner ( Appeals ) Central Excise, Customs and Service Tax-VADODARA-I.
3. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of pharmaceutical products viz., bulk drugs. They manufacture both dutiable as well as exempted products and in the course of manufacture of these products, common inputs are used by them, on which they had availed Cenvat Credit. Alleging that separate records are not maintained for the inputs used in the manufacture of dutiable and exempted products, demand notice were issued for recovery of an amount of Rs 16,74,276/- being 8% to 10% of the value of the exempted products, under Rule 6(3)(b) of Cenvat Credit Rules, 2004 with interest and penalty. On adjudication, the demand was confirmed with interest and penalty. Aggrieved by the said order, they filed appeal before Ld commissioner (Appeals), who in turn, rejected their appeal,.
4. The Ld Company Secretary for the appellant submits that during the period in question they had reversed an amount of Rs 3,76,268/- as proportionate credit availed on inputs attributable to the exempted products. Therefore, in view of the retrospective amendment to Rule 6 of CCR, 2004 by virtue of Finance Act, 2010, 8%/10% value of the exempted products cannot be recovered from them. In support, he has referred to the judgments of the Honble Gujarat High Court in the case of CCE&C vs. Rituraj Holdings Pvt Ltd - 2014(305)ELT.459 (Guj) and CCE, Mumbai vs IVP Ltd 2017(349)ELT.18 (Bom.)
4. The Ld AR for the Revenue reiterated the findings of the Ld Commissioner (Appeals).
5. I find that the appellant from the very beginning claimed that they have reversed proportionate credit on inputs attributable to the exempted products, amounting to Rs 3,76,268/- and the said amount has not been disputed by the Revenue as incorrect. Following the above precedents of the Honble Gujarat High Court and thee Honble Bombay High Court on the issue since the proportionate credit has already been reversed on the inputs attributable to the exempted products recovery of 8%/10% of the value of the exempted products under Rule 6(3)(b) of CCR, 2002/04 cannot be sustained. In the result, the impugned order is set aside and appeal is allowed with consequential relief, if any, as per law.
(Dictated and pronounced in the open Court) (D.M. Misra) Member (Judicial) swami 2