Custom, Excise & Service Tax Tribunal
Parle Products Pvt Ltd vs Commissioner Of Central Excise And ... on 10 July, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/1037/2011-SM [Arising out of Order-in-Appeal No.56/2011 dated 13/01/2011 passed by the Commissioner of Central Excise (Appeals-II), Bangalore.] PARLE PRODUCTS PVT LTD 15TH KM STONE, TUMKUR ROAD, BANGALORE 560 073. Appellant(s) Versus Commissioner of Central Excise And Service Tax BANGALORE-III PB.NO.5400, QUEENS ROAD, CENTRAL REVENUES BUILDING, BANGALORE 560 001. KARNATAKA Respondent(s)
Appearance:
Mr. Dayanand, CA VISHNU DAYA&CO, CHARTERED ACCOOUNTANT GF #7,KARUNA COMPLEX,NO377,SAMPIGE ROAD, MALLESHWARAM, BANGALORE.
KARNATAKA For the Appellant Dr. A. K. Nigam, AC (AR) For the Respondent Date of Hearing: 10/07/2014 Date of Decision: 10/07/2014 CORAM:
HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Final Order No. 22448 / 2014 Per : S.K. MOHANTY The present appeal has been filed by the appellant against the impugned order dated 13.01.2011, wherein CENVAT credit on steel racks (termed as 'pallets') has been denied on the ground that the disputed goods, by nature of their use, neither qualify as inputs nor capital goods for the appellant, in order to take the benefit of CENVAT credit.
2. The appellant herein is engaged in the manufacture of excisable products i.e. confectionery items falling under Chapter 18 and 19 of Central Excise Tariff Act. The appellant availed CENVAT credit of Central Excise duty paid on steel racks used in their factory for storing the inputs and capital goods. In support of the claim that the disputed goods are eligible for CENVAT credit as inputs, the learned counsel has referred to the Prevention of Food Adulteration Act, 1954, wherein at clause (ia), the term 'adulterated' has been clarified as an article of food shall be deemed to be adulterated if the same has been prepared, packed are kept under insanitary conditions it has become contaminated and injurious to health. The submission of the learned counsel is that unless the raw materials or the finished product are properly stored, the same will be considered as adulterated goods as mandated in the above Act. The learned counsel further submitted that In absence of proper packing, the finished goods will not be in a marketable state; hence the disputed goods will qualify as input for the purpose of taking CENVAT credit thereon. The learned counsel also submitted that the proceedings are barred by limitation, since initiated beyond the normal period prescribed in Section 11A of the Central Excise Act.
3. The learned AR appearing for the Revenue has reiterated the findings recorded in the impugned order and cited the decision rendered by the Tribunal in the case Vandana Global Ltd. [2010 (253) ELT 440 (Tri.-LB)] to substantiate the stand that CENVAT credit is not available to the appellant .
4. I have heard the learned counsel for the parties and perused the records.
5. I find that the disputed goods were used for storing the inputs and finished goods in the appellants factory. If proper storage facility is not provided to the goods handled by the appellant, then there is every possibility of contamination of the confectionary products. Therefore, considering the nature of product, the Food Adulteration Act specifically provides that manufacturers of food articles must prepare, pack and keep such articles under sanitary conditions to prevent them from contamination, which is injurious to the human health. Further, on perusal of the definition of 'input', it reveals that it is not necessary to prove that the goods should be used in or in relation to the manufacture of goods. Rather, the definition makes the position clear that as long as the inputs are used for any other purpose of production in the factory premises, the same can be termed as inputs. Therefore, in view of the statutory definition of input and the requirement under the Prevention of Food Adulteration Act, 1954 regarding the manner of storing the raw material and finished product, it can be said that the disputed goods are very much essential to be considered as inputs, used in or in relation to manufacture of the final product. The decision of the Tribunal in the case of Vandana Global (supra) cited by the Revenue is not relevant in the facts of the present case, in as much as, without steel racks, the raw materials and finished product cannot be stored/preserved and the confectionary goods will not be in a position to meet the market requirement/specification. Thus, such storage equipments are very much essential in the ultimate manufacture of goods and as such, will qualify as 'input' for the purpose of taking CENVAT credit.
6. I further observe that the show-cause proceedings have been initiated by invoking the extended period of limitation. In the present case, the limitation should be confined to a period of one year because there is no suppression or misstatement involved. The fact regarding taking of CENVAT credit was known to the Central Excise Department well in advance through the returns filed by the appellant and also periodic audit conducted by the Audit Wing. Thus, I am of the considered view that the proceedings are barred by limitation and the demand cannot be sustained on this ground.
7. In view of the above, the impugned order has no substance and accordingly the same is set aside and the appeal is allowed in favour of the appellant.
(Operative portion of the Order was pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER ssk 3