9911796707
TMI Blog2017 (9) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication to the Commissioner of Central Excise along with documentary evidence and a Certificate from the Chartered Accountant or a Cost Accountant, certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of exempted goods within a period of six months from the date on which the Finance Bill, 2010 received the assent of the President - Considering the fact that assessee had reversed the credit even prior to the amendment and the order of the Tribunal was in fact no different from what is contemplated under the Finance Act, 2010, this court held against the Revenue. There is no manifest error, in the final order of the CESTAT, Madras, in setting aside the demand, and restricting the same only to interest - appeal dismissed - decided against Revenue. - C.M.A. No. 2704 of 2017 - - - Dated:- 30-8-2017 - S. Manikumar And V. Bhavani Subbaroyan, JJ. For the Appellant : Mr. A. P. Srinivas JUDGMENT ( Delivered by S. Manikumar, J. ) Challenge in this appeal is to the Common Final Order No.879/08 dated 08.08.2008 in Appeal No.E/89/2007, on the file of CESTAT, Madras Bench, by which, the Tribunal, has set aside the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sum of ₹ 13,06,636/- (Rupees thirteen lakhs six thousand six hundred thirty six only) already paid by M/s.Mount Mettur Pharmaceuticals Ltd., vide GAR 7 Challan No.006/06-07 dated 22.8.2006 and adjust the same towards the demand made above. I impose a penalty of ₹ 10,00,000/- (Rupees ten lakhs only) on M/s.Mount Mettur Pharmaceuticals Ltd., Gummidipoondi under Rule 15 of Cenvat Credit Rules, 2004. 4. Being aggrieved by the decision of the Commissioner, Office of the Commissioner of Central Excise, Chennai Commissionerate, Chennai-35, M/s.Mount Mettur Pharmaceuticals Limited, Gummidipoondi, has preferred an appeal to CESTAT, Chennai, contending inter alia that the demand is liable to be set aside, inasmuch as the entire credit (credit taken on common input in one case and credit taken on common input service in the other) stood reversed. Reliance was also made on the decision of the CESTAT, Madras, in Pepsico Holdings Pvt. Ltd. vs. Commissioner of Central Excise, Pondicherry reported in 2008-TIOL-59-CESTAT-MAD and other decisions of Coordinate Benches of CESTAT, Madras. (i) Final Order No.A/2211/WZB/ AHD/2007 dated 29.08.2007 in Appeal No.E/2982/2003 [Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , this credit was admissible to the Credit of R .3.62 lakhs had been taken on a variety of input services which are claimed to be services specified under sub-rule (5) of Rule 6 of the CENVAT Credit Rules, 2004, in respect of which there was no bar on availment of credit on the ground of exempted final products having been cleared along with dutiable final products. We find that the claim of the assessee for the benefit was not considered by the Commissioner. Therefore the question whether the input service tax credit of ₹ 3.91 lakhs and ₹ 3.62 lakhs are admissible to the assessee as claimed by them requires to be carefully examined by the adjudicating authority. As regards the balance credit, we find that the learned Commissioner has acknowledged that the same had been reversed and interest thereon paid. It is also noted that the aforesaid credits of ₹ 3.91 lakhs and ₹ 3.62 lakhs were also reversed and interest paid thereon. On these facts, which are not in dispute, we set aside the Commissioner's order against M/ s.RSIL and remand the case to him for the limited purpose of deciding on the question whether the aforesaid credits of ₹ 3.62 lakhs and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t circulars No. 232/6/96 -CX dated 25-7-1996 and 737/55/2003-CX dated 28-08-2003? v) Whether or not the Tribunal has erred in applying the decision of the Hon'ble Supreme Court in the case of M/s Chandrapur Magnet Wires (P) Ltd., Vs. CCE, Nagpur reported in 1996 [81] ELT 3- SC to accept the case of the 1st respondent/ assessee by totally ignoring the fact that the said decision is distinguishable on the sole ground that the reversal of credit was made in that case well before the removal of such goods from the factory premises, whereas in the present case, admittedly, it had taken place only after removal of the goods from the factory? 8. Supporting the above, Mr.A.P.Srinivas, learned counsel for the appellant, contended that the Tribunal has failed to note that the 1st respondent/assessee had utilized CENVAT Credit paid inputs for the manufacture of exempted goods, and cleared the same, without reversing an amount equivalent to 10% of the value of such goods under Rule 6(3) of the CENVAT Credit Rules, 2004; that the Tribunal ought to have seen that the mandatory requirement to be performed by the 1st respondent/assessee under the said Rules, is to reverse the credit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the CENVAT credit has been utilized wrongly and interest should not be claimed simply for the reason that the CENVAT credit has been wrongly taken as such availment by itself does not create any liability of payment of excise duty. The assessee's case in this appeal is that the credit has been reversed. Therefore, mere wrong availment will not attract payment of interest as reversal of credit would amount to no credit being taken. The Hon'ble Supreme Court held that the High Court misread and misinterpreted Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. It further pointed out that a statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal and Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service and the issue is as to whether the aforesaid word OR appearing in Rule 14, twice, could be read as AND by way of reading it down as has been done by the said High Court. Further, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment of excise duty. Therefore, High Court on a conjoint reading of Section 11AB of the Act and Rules 3 4 of the Credit Rules proceeded to hold that the interest would be payable from the date CENVAT credit is wrongly utilized. In our considered opinion, the High Court misread and misinterpreted the aforesaid Rule 14 and wrongly read it down without properly appreciating the scope and limitation thereof. A statutory provision is generally read down in order to save the said provision from being declared unconstitutional or illegal. Rule 14 specifically provides that where CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. The issue is as to whether the aforesaid word OR appearing in Rule 14, twice, could be read as AND by way of reading it down as has been done by the High Court. If the aforesaid provision is read as a whole, we find no reason to read the word OR in between the expressions 'taken' or 'utilized wrongly' or 'has been erroneously refunded' as the word AND . On the happening of any of the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee/respondent was liable to pay an amount equal to 8% of the value of exempted produce under Rule 57CC. Therefore, a show cause notice was issued on the assessee therein/respondent demanding payment of duty. A reply was given by the assessee therein/respondent to the show cause notice stating that they had reversed the entire credit on the common inputs used in the manufacture of dutiable as well as exempted goods and, therefore, no demand should be made. However, the said submission was rejected by the adjudicating authority, who in his original order of adjudication, confirmed the demand of duty at 8% of the value of clearance. Against the said adjudication order, the assessee preferred an appeal before the Commissioner (Appeals), who dismissed the appeal. On further appeal, the Tribunal reversed the order of the Commissioner (Appeals) placing reliance on the decision of the Allahabad High Court in Hello Mineral Water Pvt. Ltd. Vs Union of India (2004 (174) ELT 422 (All.)) which was passed on the basis of the Apex Court's decision in Chandrapur Magnet Wires Pvt. Ltd. Vs Collector (1996 (81) ELT 3 (SC)). Aggrieved against the said order, the appellant therein/Revenue filed app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.2. While confirming the order of the CESTAT, Madras, setting aside demand of duty, the Hon'ble Division Bench in CCE, Puducherry's case followed an earlier decision of this court in Commissioner of Central Excise vs. ICMC Corporation Ltd. reported in 2015 (315) ELT 388 (Mad.), wherein, after considering the above amendments, this court held that, as per Section 73 sub-section (2) of the Finance Act, 2010, the assessee has to make an application to the Commissioner of Central Excise along with documentary evidence and a Certificate from the Chartered Accountant or a Cost Accountant, certifying the amount of input credit attributable to the inputs used in or in relation to the manufacture of exempted goods within a period of six months from the date on which the Finance Bill, 2010 received the assent of the President. Considering the fact that assessee had reversed the credit even prior to the amendment and the order of the Tribunal was in fact no different from what is contemplated under the Finance Act, 2010, this court held against the Revenue. 13. Decision in Commissioner of Central Excise, Puducherry vs. CESTAT, Chennai reported in 2015 (323) ELT 323, sq ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
