Heena Pack Pet (P) Ltd vs Commissioner Of Customs

[Arising out of Order-In-Appeal No. 28-CE/GZB/2007 dated 30/03/2007 passed by Commissioner of Custom, Central Excise & Service Tax, Meerut 1]

For approval and signature:

Honble Mr Ashok Jindal, 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?

Heena Pack Pet (P) Ltd. Appellants

Vs.

Commissioner of Customs. Respondent

Central Excise Ghaziabad, UP

Appearance:

Shri S K Pahwa, Advocate for the Appellants

Shri R K Mishra, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 8.06.2015

FINAL ORDER NO. A/ 51864/2015-(SM)

Per Ashok Jindal :

The appellant is in appeal against the impugned order denying the input credit service to them.

2. The facts of the case are that the appellant is manufacturer of PET bottles. The appellant received polyethylene terepthalate resin from M/s. South Asian Petrochem Ltd. through M/s. Eesha Trading Company, a registered dealer. The appellant availed the Cenvat Credit on the invoices issued by M/s. Eesha Trading Company showing manufacture of said goods by /s. South Asian Petrochem Ltd. who is a 100% EOU. The Cenvat Credit was taken by the appellant in June, 204 to August, 2004. The show cause notice dated 31.8.05 was issued to the appellant by invoking extended period of limitation to deny Cenvat credit on the ground that the manufacturer has not complied with the condition of notification No. 23/03 CE dated 31.3.03. Therefore, appellant is not entitled to take Cenvat credit. Both the lower authorities have denied the Cenvat credit to the appellant. Consequently, the duty demand along with interest was confirmed. Equivalent amount of penalty was also imposed. Aggrieved from the said order, appellant is before me.

3. Learned Counsel for the appellant submits that if the manufacturer supplier has not complied with the condition of notification for availing exemption, appellant is not concerned with them. In fact as per Rule 9(5) of the Cenvat Credit Rules, 2004, the appellant has to show whether the goods in question are duty paid and goods have been received by them physically. Moreover the appellant, manufacturer-supplier is manufacturing the goods and paid the duty thereon. All these conditions have been complied with, therefore, Cenvat credit cannot be denied. To support this condition, he relied on the decision of Balakrishna Industries Ltd. vs. CCE Jaipur [2014 (309) ELT 354 (Tri-Del)] and Sarvesh Refractories Pvt. Ltd. vs. Commissioner [2007 (218) ELT 488 (SC)].

4. On the other hand, learned AR opposed the contention of the learned Counsel and submits that the manufacturer-supplier has not complied with the condition of notification and imported goods had been used in the manufacturing of the inputs provided to the appellant which the supplier cannot do. Thus, character of goods involved is bad and therefore, appellant cannot take Cenvat credit thereon. To support his contention, he relied on the decision of CCE, Indore vs. S K Industries P Ltd. [2004 (172) ELT 165 (Tri-Del)] and CCE, Chandigarh vs. Devta Steel Rolling Mills [2005 (189) ELT 464 (Tri-Del)].

5. Heard the parties. Considered the submissions.

6. In this case, the short issue involved is that whether the appellant is entitled to take Cenvat credit on the inputs supplied by manufacturer supplier, a 100% EOU through dealer on which the duty has been paid and goods had been received by the appellant or not. In the present case, it is admitted fact that appellant have received the goods on which duty has been paid by the manufacture-supplier. Therefore, the appellant has complied with the condition of notification No. 23/03 CE dated 31.3.03 as per Rule 9(5) of the Cenvat Credit Rules, 2004.

7. Learned AR relied on the decision of Devta Steel Rolling Mills (supra) wherein the dispute was that whether the documents on which the appellant has taken credit was duty paying documents or not. In the case in hand, the issue of payment of duty is not in dispute. Therefore, the said case cannot be relied on. In the case of S K Industries P Ltd. (supra) although the goods are supplied by 100% EOU but invoices were issued under Rules 52A and 173G of Central Excise Rules, 1944 which were not having issued it under Rule 100 E ibid i.e. appellant. in the case there. Here the invoices have been issued by 100% EOU under the prescribed Rule, paid duty thereon and goods have been received by the appellant, therefore, the case relied upon by the learned AR have no relevance to the facts of the case. Moreover, the decision of Balakrishna Industries Ltd.(supra) , the facts were similar to the facts of this case. In that case also the manufacturer-supplier has taken the benefit of exemption notification No. 44/2001 which was not entitled to and cleared the goods to the manufacturer-supplier which took the Cenvat credit and Revenue sought to deny the said credit Ultimately, this Tribunal came to the conclusion that the manufacturer-supplier is entitled to take cenvat credit. Therefore the facts of this case are squarely covered by the decision of Balakrishna Industries Ltd. (supra). In these circumstances, I hold that appellant has correctly taken the cenvat credit which cannot be denied to them. Therefore, impugned order is set aside, appeal is accordingly allowed with consequential relief, if any.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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