Commissioner Of Central Excise, ... vs Amplicomp (I) Ltd

(Arising out of Order-in-Original No. 02/2005 dated 2.6.2005 passed by Commissioner of Central Excise, Aurangabad)

For approval and signature:

Honble Mr. P.K. Jain, Member (Technical) and Honble Mr. S.S. Garg, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No 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 : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Commissioner of Central Excise, Aurangabad Appellant Vs. Amplicomp (I) Ltd. Respondent

Appearance: Shri Ajay Kumar, Joint Commissioner (AR), for appellant Shri Yogesh S. Patki, Advocate, for respondent

CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)

Date of Hearing: 2.9.2015 Date of Decision: 2.9.2015

ORDER NO

Per: P.K. Jain

This is an appeal filed by Revenue against the order passed by the Commissioner.

2. Brief facts of the case are that the respondent-assessee imported certain capital goods under EPCG scheme for their Bangalore plant. Due to some practical difficulty, after taking permission from DGFT, they cleared the capital goods and brought to their Aurangabad unit. They availed the cenvat credit of the CVD paid on such capital goods. The said capital goods were initially used in the manufacture of stators and motors which were being manufactured by the respondent on job work basis for some other customers and no duty was being paid by them as the duty was being paid by their customer on their final product. Later on, they reversed the entire cenvat credit taken on the capital goods and shifted the capital goods to their Bangalore plant.

3. Learned AR submitted that the demand has been issued on two counts. The first count is that the respondent has failed to produce a triplicate copy of the bill of entry and in the absence of the said documents, they are not entitled to take cenvat credit. The second ground on which the demand was raised was that the respondent did not pay any duty on the goods produced from the said capital goods as they were doing only the job work and as per the condition prevalent at that time that if the capital goods are used exclusively in the manufacture of exempted goods, credit on the capital goods cannot be availed. The learned AR took us through the show cause notice and submitted that in view of this factual position, the respondent is not entitled to take the cenvat credit.

4. Learned counsel for the respondent submitted that they had the triplicate copy of the bill of entry, but somehow it was later on misplaced and they had produced the attested copy of the bill of entry from the Custom House. They had also registered a FIR for the loss or the misplacement of the triplicate copy of the bill of entry. He further submitted that it is not as if the bill of entry was not available at the time of taking the credit. Even the range Superintendent had come and visited after installation of the machine and issued the installation certificate after seeing the bill of entry etc. and in view of this position, the demand is not sustainable. In any case, extended period of limitation cannot be invoked in such circumstances. As far as the second issue is concerned, the learned counsel submitted that it is not as if the stators and motors being produced from the said goods were not dutiable but since they were doing job work, no duty was paid by them and this fact has been very clearly mentioned in the RT-12 returns filed by them. It was also submitted that in any case, these machines were later on shifted to the Bangalore unit after reversing the credit availed by them and under these circumstances, no duty can be demanded from them. Moreover, extended period of limitation cannot be invoked.

5. We have considered the submissions made by both the sides. We note that the Commissioner in his order has given the following findings:-

7. So far as the admissibility of credit is concerned the Rule 57G(3) has clearly laid down that the credit of duty is admissible on the basis of triplicate copy of Bill of Entry. However, I find that there is no evidence to show that assessee was not having triplicate copy of Bill of Entry when they have taken the credit. The documents were verified by Range officer & installation certificate has been issued and assessments for the relevant period have also been finalised, therefore, allegations to invoke extended period are not sustainable. Thus without going in to the details on merits as to whether credit is admissible when assessee is not having triplicate copy of Bill of Entry and have attested copy of the same, the extended period at this juncture can not be invoked as there is no case of suppression or misstatement of facts and demand is not sustainable on this ground.

8. The next issue is about availment of Modvat credit on capital goods, which were exclusively used for manufacture of goods on job work basis on which no duty is required to be paid. I find that Rule 57R of the C.Ex. Rules 1944 specified that no credit of specified duty shall be allowed on capital goods which are exclusively used in the manufacture of final product which are exempted or chargeable to Nil rate of duty.

In this case the assessee vide their letter AIL/CEX/98-99/001 dtd. 25.02.1999 have filed declaration under Rule 57 T of the C.Ex. Rules, 1944 wherein they have declared that the capital goods shall not be exclusively used for production of final product which is exempt from the payment of duty or is chargeable to Nil rate of duty. However assessee has not cleared any goods on payment of duty from their unit. They only manufactured goods on job work for others and cleared them without payment of duty. Thus, the capital goods have not been utilized for manufacture of dutiable goods. So Modvat credit is not admissible. However, I find that the assessee has been submitting monthly RT-12 return with a forwarding letter wherein it was clearly mentioned that they have not started their production and only doing job work for other manufacturers. Thus it appears that there was no manifestation of their intention to evade duty in violation of Central Excise Rules & in conjunction with their 57T declaration. Therefore extended period under proviso to Section 11 A(l) is not applicable in this case and the demand is not sustainable.

We find that the main grounds of the appeal are that the Commissioner, Aurangabad was incorrect in holding that extended period under the proviso to Section 11A(1) is not applicable in this case.

6. We have considered the grounds of appeal. We find that on merits itself, the demands are not sustainable. It is not under dispute that the goods were imported and CVD was paid. The respondent-assessee has produced the triplicate copy of the bill of entry at the time of taking the credit. It is only after the audit was done that the said copy was not available. We also note that installation certificate was issued by the Superintendent after visiting the factory and seeing the bill of entry etc. Under the circumstances, the view taken by the Commissioner is correct. Similarly, we find that no case has been made by the Revenue that the respondent has used the machine exclusively for the manufacture of exempted goods. The respondent was manufacturing the goods on job work basis, which were not exempt but were dutiable and duty was paid by their customer. In any case, we find that the said machines were removed from their Aurangabad plant on reversal of the entire amount of the cenvat credit taken on the capital goods and in view of the fact that the entire amount of cenvat credit was reversed only later on, nothing survives in the matter.

7. The appeal filed by the Revenue is dismissed.

(Pronounced in Court)

(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)

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