M/S Adani Wilmar Ltd vs Commissioner Of Central Excise

[ Arising out of 1. OIO-01/COMMR/2007 dtd 15.1.2007 2. OIA-157/2007/ COMMR-A-/RAJ dtd 25.7.2007 Passed by the Commissioner of Central Excise-RAJKOT]

M/s Adani Wilmar Ltd - Appellant(s)

Vs

Commissioner of Central Excise- RAJKOT - Respondent (s)

Represented by For Assessee : Shri S J Vyas, Advocate For Revenue : Shri Alok Srivastava, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

1 Whether Press Reporter 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?

No 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

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

Date of Hearing / Decision : 14/7/2015

ORDER No. A/11400-11401/2015 dtd 14/7/2015

Per : Mr.P.K. Das,

Common issue is involved in these appeals and therefore, both are taken up together for disposal.

2. The appellants were engaged in manufacturing of excisable goods viz., Refined Edible Oils (Loose ands Packed), Soap Stock, Acid Oil, FAD, Vanaspati, Blended Oil and Allied Products classifiable under Chapter 15 and 38 of the 1st Schedule to the Central Excise Tariff Act 1985. Some of the products were exempted with effect from 1.3.2005 in terms of exemption notification No 4/2005-CE dtd 1.3.2005.The appellants availed cenvat credit on inputs which were lying in their stock of inputs as on 1.3.2005. Proceedings initiated by issuing show cause notices, the appellants were directed to reverse the credit on the inputs lying in the stock as on 1.3.2005. The Adjudicating authority confirmed the demand of cenvat credit alongwith interest and imposed penalty. The Commissioner (Appeals) upheld the order.

3. After hearing both the sides and on perusal of the records, we find from the show cause notice dtd 22.2.2006 in appeal No. E/1052/2007-DB, it has been proposed to disallow the cenvat credit amounting to Rs 40,85,434/- wrongly availed/utilized and recover from them under Rule 14 of the Cenvat Credit Rules 2004 read with Section 11A of the Central Excise Act 1944. It has been alleged that the appellants was having loose stock inputs of finished products as on 1.3.2005 on which they have availed cenvat credit, but they have cleared subject goods at nil rate of duty without reversing the Modvat credit availed by them. The Learned Advocate on behalf of the appellants submits that the issue have already been decided by the Larger Bench on the Tribunal in the case of HMT vs CCE, Panchkula [2008(232)ELT.217(Tri. LB)] which was upheld by the Honble P&H High Court and also approved by the Uttarakhand Honble High Court in the case of CCE, Meerut vs APCO Pharma Ltd [2015(319)ELT.641(Uttarakhand)].

4. The Authorised Representative on behalf of the Revenue, submits that the Larger Bench decision was distinguished by the Tribunal in the case of M/s Ranbaxy Laboratories Ltd. We find that the said decision was set aside by the Himachal Pradesh High Court as reported in 2012(279)ELT.194(HP). The decision of the Lager Bench of the Tribunal in the case of M/s HMT Ltd (supra) as under :

22.?In view of the above discussions, we hold that when the input-credit legally taken and utilised on the dutiable final products, need not be reversed on the final product becoming exempt subsequently w.e.f. 9-7-2004. The decision of the Bangalore Bench in the case of TAFE Ltd. (Tractor Division) v. CCE, Bangalore - 2007 (210) E.L.T. 571 (Tri.) = 2007 (79) RLT 706 (Tribunal-Bangalore) enunciated the correct position of the law. The issue is thus, answered in favour of the assessee and against the Revenue.

23.?Before we part, we observe that this order is passed without going into the submission of the Id. Advocate that the Notification No. 10/2007-C.E. (N.T.), dated 1-3-2007 inserted sub-rule (3) to Rule 11 of Rules 2004, is a specific provision for reversal of credit because such issue was not in the referral order.

24.?The reference having thus been answered, the records may be placed before the Regular Bench for final disposal of the appeals.

5. In view of the decision of Larger Bench of the Tribunal in the case of M/s HMT Ltd (supra), we hold that the input credit legally taken and utilized on the dutiable final products need not be reversed on the final product becoming exempt subsequently with effect from 1.3.2005. As the issue was decided by the Larger Bench of the Tribunal, penalty cannot be sustained and accordingly set aside

6. Both the appeals are disposed of in the above terms.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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