2. M/S Goldtex Furnishing Industries vs Delhi-Iii

[Arising out of OIA No.121-122/GRM/RTK/2006, dt.31.03.06, passed by Commissioner of Central Excise & Customs (Appeals), Delhi.]

1. M/s Swastik Velvet Industries,

2. M/s Goldtex Furnishing Industries Appellants

Vs

Commissioner, Central Excise & Service Tax,

Delhi-III Respondent

Represented by:

For Appellants: Ms.Swati Gupta, Advocate

For Respondent: Shri A.K. Singh, Authorised Representative

For approval and signature:

Mr. P.K. Das, Honble Member (Judicial)

Mr. P.S. Pruthi, Honble Member (Technical)

1. Whether Press Reporters may be allowed to see the No

Order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the No

CESTAT (Procedure) Rules, 1982 for publication

in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of Seen

the order?

4. Whether order is to be circulated to the Departmental Yes

authorities?

CORAM:

MR. P.K. DAS, HONBLE MEMBER (JUDICIAL)

MR. P.S. PRUTHI, HONBLE MEMBER (TECHNICAL)

Date of Hearing/Decision:21.01.2015

Final Order No.51083-51084/2015

Per: P.K. Das

1. These appeals are arising out of a common order and therefore, both are taken together for disposal.

2. The relevant facts of the case, in brief, are that the Appellants are engaged in the manufacture of Unprocessed Woven Fabrics and Chenille Fabrics classifiable under Chapter 54 & 55 of Central Excise Tariff Act, 1985 and availing CENVAT Credit facility under the CENVAT Credit Rules. By letter dt.01.09.2004, they informed the Department that they intended to clear the finished product without payment of duty under Notification No.30/2004-CE, dt.09.07.2004. On 02.09.2004, the Central Excise officers of Preventive unit visited the appellants factory and found the stocks of inputs and finished goods on which they have taken CENVAT credit, lying in the factory premises. It is noticed that they did not have balance in the CENVAT account. At the instance of Central Excise officers, the appellants deposited the amount through TR-6 challan No.4/2005, dt.03.09.2005 involving the CENVAT Credit contained in the said stock. Subsequently, the appellants claimed refund of amount paid by them. The Adjudicating Authority rejected both the refund claims. The Commissioner (Appeals) upheld the adjudication order.

3. After hearing both the sides and on perusal of the records, we find that there is no dispute of the facts that the appellant utilized CENVAT credit on the inputs lying in stock on 01.09.2004 on the dutiable final product. The Larger Bench of the Tribunal on identical issue in the case of H.M.T. Vs CCE Panchkula  2008 (232) ELT 217 (Tri-LB) held as under:-

22. In view of the above discussions, we hold that when the input-credit legally taken and utilised on the dutiable final products, need not be reversed on the final product becoming exempt subsequently w.e.f. 9-7-2004. The decision of the Bangalore Bench in the case of TAFE Ltd. (Tractor Division) v. CCE, Bangalore - 2007 (210) E.L.T. 571 (Tri.) = 2007 (79) RLT 706 (Tribunal-Bangalore) enunciated the correct position of the law. The issue is thus, answered in favour of the assessee and against the Revenue.

The Honble Karnataka High Court in the case of CCE Bangalore-II Vs Tafe Ltd (Tractor Division)  2011 (268) ELT 49 (Kar.) approved the view of the Larger Bench of the Tribunal.

4. In view of above discussion, we hold that the input credit utilised in the dutiable final product need not be reversed on the final product becoming exempt subsequently. Hence, the appeals filed by the appellants are allowed subject to refund claims will be examined on the other issues.

5. The appeals filed by the appellant are allowed.

(Dictated & Pronounced in Court)

(P.S. Pruthi) (P.K. Das)

Member (Technical) Member (Judicial)

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