Commissioner Of Central Excise, ... vs Coromandel Fertilisers Ltd

[Arising out of Order-In-Appeal No. 82/2009 dated 23/06/2009 passed by the Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam]

For approval and signature:

HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER

1 Whether Press Reporters 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 the 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

Commissioner of Central Excise, Customs and Service Tax Visakhapatnam-I Central Excise Building Port Area Visakhapatnam  530 035 Andhra Pradesh Appellant(s)

Versus Coromandel Fertilisers Ltd. Sriharipuram, Visakhapatnam Respondent(s)

Appearance:

Mr. A.K. Nigam, AR For the Appellant

Mr. Anil Kumar B & Mr. Cherian Punnoose, Advocates AKB Associates, Advocates & Consultants, #311-312, Commerce House, 9/1, Cunningham Road, Bangalore  560 052 For the Respondent

Date of Hearing: 23/01/2015 Date of Decision: 23/01/2015 CORAM:

HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER

Final Order No. 20145 / 2015

Per: B.S.V. MURTHY

Respondent availed cenvat credit of central excise duty paid on MS Sheets, Plates etc. which were used in the factory for maintenance and repair and expansion of their factory. Taking a view that these items are not covered by the definition of capital goods and hence the respondent should not have availed the credit, proceedings were initiated demanding the cenvat credit availed during the period from November 2004 to March 2007 culminating in confirmation of the demand for Rs. 15,56,963/- (Rupees Fifteen Lakhs Fifty Six Thousand Nine Hundred and Sixty Three only) with interest thereon. Penalty of Rs. 12,80,505/- (Rupees Twelve Lakhs Eighty Thousand Five Hundred and Five only) under Rule 15(1) and (2) of Cenvat Credit Rules had also been imposed. On an appeal filed by the assessee, the Commissioner (Appeals) took a view that demand was time-barred since the appellant had furnished all the details along with ER-1 returns and as per the instructions issued by CBE&C, the departmental officers were required to examine such reports within three months. Revenue is aggrieved by this decision and is in appeal.

2. Learned AR submits that the stand taken by the learned Commissioner is totally incorrect. The respondents had not furnished the details of the actual usage of said capital goods received in the factory. Therefore there was a clear suppression. Further he also submits that the respondents should not have taken the credit since the definition of capital goods do not cover these items at all and therefore it cannot be said that they could have entertained a bona fide belief regarding their eligibility.

3. Learned counsel would submit that respondents had given the details of the actual usage of the materials received and credit taken during the course of personal hearing. He submits that the same has not been considered. He also submits that the respondents had used these materials for maintenance and repair and expansion. He also relies upon the following decisions to submit that the respondent could have entertained bona fide belief regarding their eligibility since different Benches of the Tribunal had taken a view that credit is admissible. The decisions are as follows:

a) Jindal Vijayanagar Steels Ltd. Vs. CCE, Belgaum 2005 (191) ELT 459 (Tri.-Bang.)

b) Rosa Sugar Works Vs. CCE, Lucknow 2006 (194) ELT 456 (Tri.-Del.)

c) CCE, Indore Vs. Navin Chemicals Enterprises 2002 (147) ELT 234 (Tri.-Del.)

d) Andhra Pradesh Paper Mills Ltd. Vs. CCE & C, Visakhapatnam 2009 (240) ELT 555 (Tri.-Bang.)

4. I have considered the submissions made by both the sides. On going through the records it is found that respondents had filed ER-1 returns and has also given the details of the credit taken even though it was not a statutory requirement during the relevant time. Further learned counsel also submitted the statement which shows the materials received, suppliers name and the usage of the same in the factory. Moreover I also find that the submission of the learned counsel that because of the views prevailing during the relevant time taken by different Benches of this Tribunal, the respondent could have entertained a bona fide belief regarding their eligibility. Under these circumstances for demanding the cenvat credit, extended period could not have been invoked even if a view is taken about non eligibility. There were contrary views finally settled by this Tribunal Larger Bench in the case of Vandana Global Ltd. Vs. CCE, Raipur [2010 (253) ELT 440 (Tri.-LB)] and hence extended period could not have been invoked as submitted by the learned counsel. Under these circumstances, I am unable to consider the stand taken by the Revenue and argued by the learned AR. At this stage learned AR would request that the matter may be remanded for fresh consideration of the actual usage of the materials. Since invocation of extended period in my opinion is not at all correct, I do not consider it appropriate that the matter should be remanded. In view of the above discussion, appeal is rejected.

(Order pronounced and dictated in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER

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