Commissioner Of Central Excise & ... vs Ring Plus Aqua Ltd

(Arising out Order-in-Appeal No. 62-R/2005 dated 23.03.2005 passed by the Commissioner of Central Excise, Nashik)

For approval and signature: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S. S. Garg, Member (Judicial)

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 CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : Yes 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, Nashik Appellant

Vs.

Ring Plus Aqua Ltd. Respondent

Appearance:

Shri Ajay Kumar, Jt. Comm (AR) for the appellant Shri Prasad Paranjape, Advocate for the respondent

CORAM:

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

Date of hearing : 04.08.2015 Date of decision : 04.08.2015

O R D E R No:..

Per: P.K. Jain:

The brief facts of the case are that the appellants imported certain capital goods under EPCG scheme and cleared the same on payment of CVD. Appellant took credit of the said amount of CVD. Later on they found that the goods produced with the said capital goods are not to the satisfaction of the company and they took up the matter with the supplier of the capital goods and later on re-exported the said capital goods and got their EPCG licence cancelled. The goods were exported by them under bond procedure and hence no duty was paid at the time of export. Revenues case is that the appellant is required to pay duty equal to the amount of Cenvat credit taken by them at the time of import. In the impugned order the Commissioner following the board circular no. 345/2/2000 dated 29.08.2000 in para 8 allowed the appeal. Revenue is in appeal against the said order.

2. Ld. AR submitted that in this case the capital goods were imported in 1999 and were exported vide shipping bill 16.01.2003. He further submitted that at the time of import they had taken the credit of duty since they have removed the goods as such they are required to reverse the credit as such. He further took us through various grounds mentioned in the grounds of appeal. Ld. counsel for the appellant submitted that circular dated 29.08.2000 very clearly covers the situation. It was also submitted that this Tribunal has been consistently holding that export of capital goods without payment of duty without reversing the Cenvat credit is in order. In support of his submission, ld. counsel submitted this Tribunals decision in Glass Ceramic Decorators vs. CCE 2014 (305) ELT 133. He further submitted that similar view has been taken by this Tribunal in the case of Essel Propack Ltd. 2014 (314) ELT 584. It was also submitted that similar view has been taken by this Tribunal in the case of Videocon International Ltd. 2009 (235) ELT 135.

3. We have considered the submissions of both sides.

4. We find that Board circular no. 345/2/2000 dated 29.08.2000 in para 8 states as under:-

?8. Explanation to Clause (b) of sub-rule (1) of Rule 57AB refers to payment of appropriate duty of excise if the inputs or capital goods are removed as such from a factory. It has been pointed out that there may be a situation where the input or capital goods are exported. Doubt has been expressed whether such export clearances have to be made only on payment of duty. In this context it is clarified that under the excise procedures, a manufacturer can export the goods under bond without payment of duty. This is a facility that is available to the manufacturer under the excise procedure. In such case, the appropriate duty of excise that is payable is nil. Therefore, there is no bar for a manufacturer to remove the inputs or capital goods for export under bond within the Explanation referred to above.

5. We also note that exactly same issue has come up before this Tribunal in Glass Ceramic Decorators (supra). In the said case, this Tribunal has observed as under:

5.1?It is not in dispute that the capital goods imported by the appellant have been exported. On export of capital goods, the appellant is eligible for rebate of the duty paid thereon under Rule 18 of the Central Excise Rules or the appellant can export the goods without payment of duty under bond under Rule 19 of the said Rules. In respect of the goods on which credit has been taken, Circular issued by Board in 1996 as well as in 2000, clearly says that the manufacturer assessee is entitled to clear the inputs or capital goods for export (on which credit has been taken) under bond without payment of duty. The decision of the Tribunal in the case of Videocon International Ltd. (supra) also confirms this view.

5.2?We also note that in the case of Essel Propack Ltd. decided vide Order No. A/1023/2013/EB/C-II, dated 20-11-2013, an identical issue came up for consideration before this Tribunal, where the capital goods procured on which credit was taken was subsequently re-exported without reversal of credit and this Tribunal in the said case held that the appellant is not required to reverse Cenvat credit on the capital goods exported.

6.?Following the ratio in the above decision, in the present case also, we hold that the appellant is not required to reverse Cenvat credit taken on the capital goods, which was procured and subsequently re-exported. Accordingly, we allow the appeal for consequential relief, if any, in accordance with law.

6. In view of the consistent stand of this Tribunal, which is also in accordance with the Board circular dated 29.08.2000, we dismiss the appeal filed by the Revenue. Cross objection filed by the respondent is also disposed of.

(Operative part pronounced in Court)

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

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