Emerson Network Power (I) P. Ltd vs Commissioner Of Central Excise, ...
- CitationAPPEAL No. E/2014/05-Mum
Ratio decidendi
The rule this decision rests on
Where a manufacturer clears inputs, on which Cenvat credit was taken, free of charge to its depots or branch offices for warranty replacement without any sale or resale of those goods, the manufacturer discharges its obligation by reversing the credit equal to the credit taken on those inputs, and the goods need not be valued at a higher price (such as 115% of the price at which replacement parts are sold) for the purpose of determining the amount to be reversed. The Tribunal followed its earlier decision in the appellant's own case, which in turn followed the Larger Bench decision in Eicher Tractors, holding that reversal of credit suffices and no re-determination of value is required in view of the Board's Circular dated 25.4.2005; a decision in which the goods were actually resold by a sister concern, and therefore a price was available, is distinguishable and does not govern such clearances.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. AT/M-III/126/2005 dated 7.3.2005 passed by Commissioner of Central Excise & Customs (Appeals), Mumbai-II)
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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Emerson Network Power (I) P. Ltd. Appellant Vs. Commissioner of Central Excise, Mumbai-III Respondent
Appearance: Ms. Anjali Hirawat, Advocate, for appellant Shri S.V. Nair, Assistant Commissioner (AR), for respondent
CORAM: Honble Mr. P.K. Jain, Member (Technical) Honble Mr. S.S. Garg, Member (Judicial)
Date of Hearing: 7.9.2015 Date of Decision: 7.9.2015
ORDER NO
Per: P.K. Jain
Brief facts of the case are that the appellants are engaged in the manufacture of UPS system. For the manufacture of UPS system, they are importing certain inputs and availing cenvat credit on the same. At times, some of the inputs are cleared to various depots, branch offices for purpose of warranty replacement. The appellants have reversed the credit equal to the credit taken at the time of import or receiving the inputs. However, the Revenue is claiming that the value should be taken as 115% or the price at which such warranty replacement parts have been sold by them from their warehouses.
2. Heard both sides.
3. We find that the present order-in-original has been passed by the original authority. In view of the order-in-original No. 24/KKS/2003-04 dated 25.3.2004 passed by the Commissioner of Central Excise, Mumbai-III, learned counsel for the appellant submits that the said order-in-original has already been set aside by this Tribunal vide order reported in 2014 (310) ELT 796 (Tri.-Mumbai). The learned counsel submitted that in view of this position, the appeal may be allowed.
4. Learned AR, on the other hand, took us through the impugned order and submitted that in the order quoted by the appellant, the Boards circular No. 643/34/2002-CX dated 1.7.2002 has not been taken into account and in view of the then existing provisions of the law, the appellant is required to reverse the amount on the higher value as determined under Section 4 of the Central Excise Act.
5. We have considered the rival submissions. We find that the circular dated 1.7.2002 has been amended vide Circular No. 813/10/2005-CX dated 25.4.2005 as also Circular No.816/13/2005-CX dated 16.6.2005. We also note that exactly same issue has come up in appellants own case in the case reported in 2014 (310) ELT 796 (T). In the said case, this Tribunal has observed as under:-
5. We have carefully considered the submissions made by both sides.
5.1 As regards the National Engg. India Ltd. (supra) relied by the Revenue, we note that the facts are different from those involved in the present appeal. In that case, the goods though cleared on reversal of credit were actually resold by the sister concern and, therefore, a value was available for payment of duty. It was in that context, it was held the price of the goods sold should be basis for payment of duty and mere reversal of credit would not suffice. In the present case, there is no sale or resale of the goods. The goods are cleared from the factory to meet the warranty obligations free of charge. Therefore, the ratio of the said decision would not apply. It is in this context, one has to see Larger Benchs decision which dealt with an identical matter in the case of Eicher Tractors and held that reversal of credit would suffice and there is no need for re-determination of value in view of the Boards Circular dated 25-4-2005.
6. In view of the above, following the Larger Benchs decision, we set aside the impugned order and allow the appeal.
6. Keeping in view the fact that in appellants own case this Tribunal has allowed the appeal, respectfully following the same judgment, we allow the present appeal.
(Pronounced in Court)
(S.S. Garg) Member (Judicial) (P.K. Jain) Member (Technical)
tvu 1 4
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