Cce, Indore vs M/S.Laxmi Pipes Pvt. Ltd

Customs Excise and Service Tax Appellate Tribunal22 September 2015

CitationExcise Appeal No.E/2631/2006-EX(DB)

Ratio decidendi

The rule this decision rests on

Where an assessee has reversed Cenvat credit on exempted goods by paying the amount prescribed under Rule 6(3)(b) of the Cenvat Credit Rules, 2002, Section 11D of the Central Excise Act, 1944 does not apply, notwithstanding that the amount was recovered from buyers, provided the amount is paid to the Government as required by Rule 6. Whether Section 11D applies turns on a finding of fact as to whether the assessee actually recovered an excise amount from its customers, which is to be determined from the assessee's ledger account; a debit note or journal voucher describing the amount as recoverable excise duty does not by itself establish such recovery.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI

Date of Hearing/Decision:22.09.2015

Excise Appeal No.E/2631/2006-EX(DB)

[Arising out of Order-in-Appeal No.IND-I/159/2006 dated 26.04.2006 passed by the Commissioner (Appeals-I), Customs & Central Excise, Indore]

CCE, Indore Appellants

Vs.

M/s.Laxmi Pipes Pvt. Ltd. Respondent

Appearance:

Rep. by Shri R.K. Grover, DR for the appellant.

Rep. by none for the respondent.

For approval and signature:

Honble Smt. Sulekha Beevi C.S., Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Coram: Honble Smt. Sulekha Beevi C.S., Member (Judicial)

Honble Shri B. Ravichandran, Member (Technical)

Final Order No.53045/2015 dated:22.09.2015

Per B. Ravichandran:

Revenue is in appeal against the order dated 26.4.2006 of the ld. Commissioner (Appeals). The respondents are manufacturers of PVC pipes and fittings and HDPE Sprinkler pipes liable to central excise duty. They were clearing PVC pipes at nil rate of duty to various water supply projects and also HDPE Pipes as sprinkler system at nil rate of duty. Since they were availing cenvat credit on inputs used in the manufacture of these final products, they were paying 8% of the value of the said exempted goods in terms of Rule 6(3)(b) of the Cenvat Credit Rules, 2002. The proceedings were initiated against them on the ground that the said 8% of the amount were being recovered by them from their buyers and as such, they have to deposit the same in terms of the provisions of Section 11 D of the Central Excise Act, 1944. The Original Authority confirmed the demand and imposed penalty. On appeal, the Commissioner (Appeals) set aside the original order. Aggrieved by the impugned order, the Revenue is in appeal. In the grounds of appeal, it was contended that the respondents have charged the amount as central excise duty in all these cases and as such, the provisions of Section 11 D are applicable. The Revenue contended that money collected by the respondent from their buyers which was earlier reversed by them in terms of Rule 6(3)(b), the same is liable to be deposited under Section 11 D.

2. During arguments, ld. AR reiterated the grounds of appeal. None appeared on behalf of the respondent..

3. We have examined the appeal records.

4. The point of decision is the correctness of the impugned order regarding the applicability of Section 11 D to the respondent. Ld. Commissioner (Appeals) categorically held that the respondent has not recovered the said amount from their customers as seen from the ledger account submitted by them. Further, the amount of 8% paid by them is clearly an amount and not an excise amount and this fact is well known to the customers. Hence, merely because debit note/journal vouchers stated the amount to be recoverable as excise duty, it cannot be alleged that the respondent were recovering excise duty from their customers which was not paid to the Government. Accordingly, ld. Commissioner (Appeals) held that there is no case for any recovery from the respondent in terms of Section 11 D. In view of the clear finding on facts in the impugned order, we find no reason to interfere with the same. It may also be mentioned here that the Board examined the same issue and clarified that vide Circular dated 16/05/2008 that as long as amount of 8% or 10% is paid to the Government in terms of Rule 6 of the Cenvat Credit Rules, the provisions of Section 11 D shall not apply even if the amount is recovered from the buyers.

5. Considering the above discussion, we find no merit in the appeal filed by the Revenue and dismiss the same.

( Sulekha Beevi C.S. )

Member (Judicial)

( B. Ravichandran)

Member (Technical)

Ckp.

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