Commissioner Of Central Excise & S.T., ... vs M/S. Indus Tropic Limited

(Arising out of OIA-160/2007/COMMR-A-/RAJ dated 25.07.2007, passed by Commissioner (Appeals) Central Excise & Service Tax, Rajkot)

Commissioner of Central Excise & S.T., Rajkot : Appellant (s)

VERSUS

M/s. Indus Tropic Limited : Respondent (s)

Represented by :

For Revenue (s) : Shri Lalatendu Patra, Authorised Representative For Assessee (s) : None

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical)

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

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

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

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble Member (Technical)

Date of Hearing / Decision : 31.08.2015

ORDER No. A/11243 / 2015 Dated 31.08.2015

Per : Mr. P.K. Das;

None appears on behalf of the Respondent. Heard the learned Authorised Representative on behalf of the Revenue.

2. After hearing the learned Authorised Representative and on perusal of the records, we find that the respondents were engaged in the manufacture of excisable goods viz. Block Board and Veneer falling under heading No. 4408.3990 and 4404.90 of the schedule to the Central Excise Tariff Act, 1985. The Respondent availed the benefit of Notification No. 39/2001-CE dated 31.07.2001, as amended vide Notification No. 65/2003 dated 06.08.2003. According to the said notification, the manufacturer first utilise the whole of the CENVAT credit available to him on the last date of the month under consideration for payment of duty on the goods cleared during such month and pay the balance amount in cash, then the manufacturer will be eligible for refund of amount of duty paid in cash through PLA. The Respondent filed refund claim of Rs. 9,68,692/- for the period from 16.05.2006 to 16.01.2007. The adjudicating authority sanctioned the refund claim of Rs. 6,39,963/-. The Revenue filed appeal before the Commissioner (Appeals). By the impugned order, the Commissioner (Appeals) rejected the appeal filed by the Revenue.

3. The main contention of the learned Authorised Representative for the Revenue is that the Commissioner (Appeals) erroneously excluded the reversal of CENVAT credit on inputs, cleared as such, which is part of the notification. It is further submitted that the total value of clearance of final products to be computed including, inputs removed as such, waste, bye-product or goods falling in the first schedule of the Central Excise Tariff Act, 1985. On perusal of the notification, we find that the refund is eligible on the specified goods appeared in annexure to the said notification, cleared from a unit located in Kutch district of Gujarat from so much of the duty of excise or the additional duty of excise, as the case may be leviable thereon, as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by the utilising CENVAT credit under Cenvat Credit Rules, 2001. We find that refund of duty would be related to the specified goods cleared by the manufacturer. The Commissioner (Appeals) observed that value of the inputs cleared as such cannot be clubbed value of excisable goods manufactured and cleared by the assessee for arriving at the aggregate value of clearance for extending the benefit of exemption notification. We find that on plain reading of notification, there is no indication that value of the inputs cleared as such would be included in the aggregate value of clearance for the purpose of availing the benefit of exemption notification. For proper appreciation, the findings of the Commissioner (Appeals) is reproduced below:-

9. From the reading of the contents of the said notification, it is evident that manufacturer of goods and commercial production words implies to the excisable goods manufactured by the appellant and commercial production means, the finished goods manufactured and cleared from their factory for sale in the market. Whereas on perusal of input invoices received by the appellant as well as invoices raised by the appellant for the clearance of inputs as such on equivalent reversal of credit, it is noticed the said inputs are not their final product or specified goods as per the annexure to the said notification but these are different inputs removed as such on actual reversal of duty equivalent of credit availed on the said inputs. It is also noticed from the said invoices which clearly bears an endorsement that, Removal of inputs as such under Rule 3(5) of Cenvat Credit Rule, 2004. The appellants specified final products as per the item approved under the notification is Block Board and Veneer manufactured from Timber and only the value of these excisable goods manufactured and cleared by the appellant on payment of appropriate duties are liable to be taken for the purpose of computing total aggregate value of clearance as per the said notification. Therefore, there is a merit in the appellants contention that the value of inputs cleared as such can not be clubbed along with value of excisable goods manufactured and cleared by the appellant for arriving aggregate value of clearance for extending the benefit of exemption under Notification No. 39/2001. Therefore, I hold that, if the value of Rs. 69,92,104/- of inputs cleared as such is excluded from the total value of clearance, the appellants are well within the exemption limit of Rs. 4,66,96,992/- during the relevant period. Accordingly, the appellants are eligible for refund of duty paid in PLA on excisable goods as their clearance is within exemption limit. The lower authoritys order to the extent of restricting the refund amount is liable to be set aside.

4. We agree with the findings of the Commissioner (Appeals). Hence, there is no reason to interfere the order of Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial) ..KL

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