Diamond Cement vs Cce & St, Bhopal

[Arising out of Order-in-Appeal No.BPL-EX-EXCUS-000-APP-330-13-14 dated 27.03.2014 passed by the Commissioner (Appeals), Customs & Central Excise, Bhopal]

For approval and signature:

HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)

HONBLE MR. S.K. MOHANTY, 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?

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

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

Diamond Cement Appellant

Vs.

CCE & ST, Bhopal  Respondent

Present for the Appellant : Shri Amit Jain, Advocate

Present for the Respondent: Shri.Ranjan Khanna, DR

Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)

HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 19/01/2015

FINAL ORDER NO. 50510/2015

PER: RAKESH KUMAR

The appellant are manufacturers of cement chargeable to central excise duty. During the period from 01.08.2007 to 14.04.2009, the appellant received some petroleum coke from a 100% EOU and the EOU had cleared the same as DTA clearance on payment of duty in terms of proviso to section 3(1) of Central Excise Act 1944 read with Exemption Notification No.23/2003-CE. The appellant during this period took Cenvat credit of the additional custom duty plus education cess and secondary and higher education cess. The Department is of the view that since the goods had been received by the appellant are from a 100% EOU, they were required to determine the quantum of Cenvat credit available to them in terms of the formula prescribed in Rule 3 (7) (a) of the Cenvat Credit Rules, 2004. It is on this basis that the Joint Commissioner vide order-in-original dated 31.03.2013 confirmed the Cenvat credit demand of Rs.44,54,046/- against the appellant alongwith interest thereon under section 11AB and besides this imposed penalty of equal amount on them under Rule 15 (2) of Cenvat Credit Rules 2004 read with section 11AB of Central Excise Act, 1944. On appeal being filed to Commissioner (Appeals), against this order of the Joint Commissioner, the Commissioner (Appeals) vide Order in appeal dated 27.03.2014 held that the Cenvat credit demand post on 17.04.2009 is not sustainable, as the supplier 100%EOU had become a DTA unit, and accordingly by re-quantified the demand to Rs.41,09,440/- alongwith interest. Here it may be mentioned that order passed by the Commissioner (Appeals) is an ex ex-parte order without hearing the appellant, as according to the Commissioner (Appeals), the appellant did not appear for hearing in spite of three notices having been issued. Against this order of the Commissioner (Appeals), this appeal has been filed alongwith stay application.

2. Heard both the sides. Though the matter is listed for hearing of the stay application, after hearing the matter for sometime, the Bench was of the view that the matter can be taken up for final disposal. Accordingly, the requirement of pre-deposit is waived and with the consent of both the sides, the matter is heard for final disposal.

3. Shri Amit Jain, Advocate, the ld. Counsel for the appellant, pleaded that though the appellant during the period of dispute i.e. 01.8.2007 to 16.4.2009 had taken the Cenvat credit of additional customs duty portion and education cess and secondary and higher education cess portion of the duty paid by the EOU and as such had not determined the quantum of Cenvat credit available to them in terms of formula prescribed in Rule 3 (7) (a) of Cenvat Credit Rules, 2004, there is no excess availment of Cenvat credit, as in terms of Commissioner (Appeals) order the credit of the special additional custom duty (SAD) would also be admissible which the appellant have not taken, that the Commissioner (Appeals) has not given any finding on limitation, while a specific plea had been made on limitation and unless the extended period under proviso to section 11 A (i) of the Central Excise Act, 1944 was available to the Department the entire demand would be time barred. He, therefore, pleaded that the impugned order passed without hearing the appellant is not sustainable.

4. Shri R.K. Grover the ld. DR defended the impugned order by reiterating the findings of the Commissioner (Appeals). He pleaded that calculation of quantum of the credit has been given in the annexure to the show cause notice and as such there is excess availment of Cenvat credit. He, however, stated that since there is no finding on limitation, and he has no objection if the matter is remanded to the Commissioner (Appeals).

5. We have considered the submissions from both the sides and perused the records. During the period from 01.08.07 to 16.04.2009 the appellant in respect of the petroleum coke received from a 100% EOU were required to avail cenvat credit in terms of the formula prescribed in Rule 3 (7) (a) of the Cenvat Credit Rules, 2004 but instead of doing so, they have taken the cenvat credit of the entire additional customs duty and education cess and secondary and higher education cess portion of the excise duty paid on by the goods. However, it is seen that in terms of the Commissioner (Appeals)s order the appellant were also eligible for cenvat credit of Special Additional Customs Duty (SAD) paid on by the goods, while admittedly, the appellant have not taken the cenvat credit of SAD, and if they are eligible for SAD credit and its quantum is considered, the quantum of excess credit alleged to have been taken may come down. It is also the appellants plea is that there is no suppression of any facts on their part and hence longer limitation period is not available to the departments. But no findings on this point has been given by the Commissioner (Appeals), probably because the matter was decided ex-parte. In view of this, the impugned order is set aside and the matter is remanded to the Commissioner (Appeals) for denovo decision after hearing the appellant and considering their pleas regarding the question of limitation and availability of SAD credit.

6. The appeal as well as stay application stands disposed of as above.

[Dictated & Pronounced in the open Court].

(S.K.MOHANTY) (RAKESH KUMAR)

MEMBER (JUDICIAL) MEMBER (TECHNICAL)

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