Kirloskar Eelctric Company Ltd vs Commissioner Of Central Excise And ...

[Arising out of Order-In-Appeal No 223-2014 dated 24/04/2014 passed by Commissioner of Central Excise , BANGALORE-I( Appeal) ]

For approval and signature:

HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER

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?

Kirloskar Eelctric Company Ltd Formerly M/s Kaytee Switchgears Ltd Now Merged With M/s Kirloskar Electric Company Ltd)no.81/3, Kachenahalli,nelmangala BANGALORE - 00 KA Appellant(s)

Versus

Commissioner of Central Excise And Service Tax Bangalore-iii PB.NO.5400...QUEENS ROAD, CENTRAL REVENUES BUILDING, BANGALORE, - 560001 KARNATAKA Respondent(s)

Appearance:

Shri Ramnath, Advocate RAVI SHANKAR & CHANDER KUMAR, ADVOCATES 504,4TH FLOOR, OXFORD TOWERS, NO.139, OLD AIRPORT ROAD, KODIHALLI, BANGALORE - 560008 KARNATAKA For the Appellant

Dr. A.K. Nigam, Addl. Commissioner(AR) For the Respondent

Date of Hearing: 20/01/2015

Date of Decision: 20/01/2015

CORAM:

HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER

Final Order No. 20107 / 2015

Per : B.S.V.MURTHY

Appeal has been rejected on the ground that the appellants did not deposit an amount of Rs.31,50,000/- as per the stay order No.9/2014 dt. 28/04/2014.

2. The issue involved is whether the appellant who had set up the factory and in the initial period of 6 months was undertaking machining work for others till they started commercial production could have taken CENVAT credit during the period when they were not paying or not. Even though machining work was liable to service tax, the appellants availed the benefit of Notification No.8/2005.ST dt. 01/03/2005 which provides exemption where the products on which job work was done ultimately go into products which suffered duty. After the commercial production started subsequently, the appellants started paying duty and therefore it is the submission of the learned counsel that merely because the appellants availed benefit of Notification No.8/2005 and did not have to pay duty does not mean that they are not eligible for the benefit of CENVAT credit. He relies on the decision in the case of Hema Engg. Industries Ltd. Vs. CST [2013(32) STR 462 (Tri.)] wherein it was held that job workers undertaking process of electroplating/painting of semi-finished goods and availing benefit of Notification No.8/2005 were entitled to CENVAT credit. Since the issue is covered by the precedent decision, I consider that Commissioner(Appeals) could have heard the appeal without insisting on predeposit. In view of the above discussion, instead of considering stay application alone and postponing the matter to another date, I consider it appropriate that at this stage itself, matter should be remanded to the Commissioner(Appeals) with a request to decide the appeal on merits without insisting on any predeposit after giving reasonable opportunity to the appellants to present their case. The appeal is remanded.

(Operative part of this order was pronounced in the court on conclusion of the hearing)

B.S.V.MURTHY TECHNICAL MEMBER

Raja.

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