Commissioner Of Central Excise, ... vs M/S.Aditya Birla Nuvo Ltd

(Arising out of Order-in-Original No.115/Commissioner/CE/Kol-IV/2007 dated 29.05.2007 passed by the Commissioner of Central Excise, Kolkata-IV.)

FOR APPROVAL AND SIGNATURE

HONBLE DR. D.M. MISRA, MEMBER(JUDICIAL) HONBLE DR. I.P. LAL, 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 Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

Commissioner of Central Excise, Kolkata-IV Applicant (s)/Appellant (s)

Vs.

M/s.Aditya Birla Nuvo Ltd. Respondent (s)

Appearance:

Shri S.P.Pal, Appraiser(A.R.) for the Revenue

Shri Agnibesh Sengupta, Advocate for the Respondent

CORAM:

Honble Dr. D.M. Misra, Member(Judicial) Honble Dr. I.P. Lal, Member(Technical)

Date of Hearing:- 13.01.2015 Date of Pronouncement :- 13.01.2015

ORDER NO.FO/A/75019/15

Per Dr. D.M. Misra.

1. Heard both sides.

2. This Appeal is filed by the Revenue against Order-in-Original No.115/Commissioner/CE/Kol-IV/2007 dated 29.05.2007.

3. Briefly stated the facts of the case are that the Appellant are engaged in the manufacture of wool top and wool grease falling under chapter sub-heading 5510 and 1501 of CETA, 1985 respectively. Wool top is dutiable, whereas, wool grease which emerges as a byproduct during the course of manufacture of the finished goods wool top, was exempted from payment of duty. In the course of manufacture of wool top, the respondent used, the input namely, Alphox 200 on which they availed CENVAT Credit. The department issued a demand notice on 31.03.2005, invoking extended period of limitation, alleging that during April, 2001 to September, 2004, even though they have used the input Alphox 200 in the manufacture of the byproduct, wool grease they have failed to maintain separate accounts as required under erstwhile Rule 57AD of Central Excise Rules, 1944 and Rule 6(2) of the CENVAT Credit Rules, 2002/2004 nor paid the amount @8% of the price of the exempted goods i.e. wool grease. On adjudication the Ld.Commissioner has dropped the demand notice observing that even though on merit the issue was in favour of the Revenue, but the demand was barred by limitation. Aggrieved by the said order the Revenue is on Appeal.

4. The Ld.A.R. for the Revenue submits that even though in the initial stage of filing Appeal, they have not challenged the issue on merit, but now through a Miscellaneous Application, they revised the grounds of appeal, and challenged the Order on merit also. He however fairly submits that now in view of the judgement of the Honble Supreme Court in the case of UOI & Others vs. Hindusthan Zinc Ltd.  2014-TIOL-55-SC-CX wherein it has been held that maintenance of separate accounts for inputs consumed in the emergence of byproduct during the course of finished goods, is not required under Rule 6(2) of CENVAT Credit Rules, hence Revenue has no case on merits.

5. We find that the sole ground on which the Order of the Ld.Commissioner was challenged by the Revenue, while filing the Appeal was that the Ld.Commissioner has dropped the demand on the ground of limitation even though observed that the issue was decided in favour of the Revenue by the larger Bench of this Tribunal in the case of Rallies India Ltd. vs. UOI  2006 (199) ELT 443 (Tri.-LB). However, the said judgement was later over-ruled by the Bombay High Court in the case of Rallies India Ltd. vs. UOI - 2009 (233) ELT 301 (Bom.). We find that the issue is no more res integra in view of the judgement of the Honble Supreme Court in the case of Hindusthan Zinc Ltd. (supra) wherein it has been laid down that separate accounts need not be maintained under Rule 57AD of erstwhile Central Excise Rules, 1944 or under Rule 6(2) of the CENVAT Credit Rules, 2002/2004, where use of inputs results in the emergence of byproduct, which is exempted. In view of the said judgement, we do not find merit in the Appeal filed by the Revenue. Once the merit of the case is decided in favour of the Respondent, there is no need for looking into the limitation aspect. Consequently, Revenues Appeal is dismissed. Miscellaneous Application also disposed of.

(Pronounced and dictated in the open court.)

SD/ SD/

(I.P.LAL) (D.M.MISRA) MEMBER(TECHNICAL) MEMBER(JUDICIAL) sm

4 Appeal No.Ex.Ap.595/07