M/S.Besco Ltd vs Cce & St, Kol-I

Miscellaneous Application No.MA-75585/15 & Appeal No.EA-608/07 (Arising out of Order-in-Appeal No.21/Kol-VII/07 dated 23.07.2007 passed by the Commissioner(Appeal-I) of Central Excise, Kolkata.)

FOR APPROVAL AND SIGNATURE

HONBLE DR. D.M. MISRA, 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 Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

M/s.BESCO Ltd. Applicant (s)/Appellant (s) Vs.

CCE & ST, Kol-I Respondent (s)

Appearance:

Shri B.N.Chattopadhyay, Consultant for the Appellant (s) Shri A.Roy, Supdt.(AR) for the Revenue (s)

CORAM:

Honble Dr. D.M. Misra, Member(Judicial)

Date of Hearing/Decision :- 14.8.2015 Date of Pronouncement :- 14.8.2015

ORDER NO.FO/A/75432/2015

Per Dr. D.M. Misra.

1. Heard both sides.

2. This is an Appeal filed against Order-in-Appeal No.21/Kol-VII/07 dated 23.07.2007.

3. Shri B.N.Chattopadhyay, ld.Consultant for the applicant submitted that during the period December, 1999 to February, 2000, they have used inputs in the manufacture and clearance of dutiable as well as exempted products. Admittedly separate inventory and records had not been maintained for the inputs as required under Rule 57CC of erstwhile Central Excise Rules, 1944. Consequently a demand notice was issued to them for recovery of 8% of the prices of the exempted product. He submits that both the authorities below had not considered the submission that before clearance of the exempted goods from the factory, proportionate credit on the inputs used in or in relation to the manufacture of such exempted products had been reversed. He submits that the department proceeded on an erroneous basis that once CENVAT Credit has been availed on the inputs and utilized in the manufacture of exempted product, subsequent reversal of proportionate credit would not absolve them from the liability of discharging 8% of the price as prescribed under Rule 57CC of Central Excise Rules, 1944.

4. Per contra the ld.AR for the Revenue submits that the relevant Rule 57CC has been amended retrospectively vide Finance Act, 2010 whereby the assesses have been allowed to reverse proportionate credit attributable to the inputs used in the manufacture of exempted final product. In similar circumstances, the Honble Gujarat High Court in the case of Shree Rama Multi Tech Ltd. v. UOI  2011 (267) ELT 153(Guj.) and the Tribunal in Dabur Pharma Ltd. Vs. CCE,Kolkata-I 2010(262) 275(Tri-Kol) remanded the proceeding. He has no objection in remanding the case to the adjudicating authority.

5. I find that the limited issue in the present case is eligibility to reverse of proportionate CENVAT Credit on inputs attributable to the exempted final product during the relevant period 1999-2000. I find that in view of the retrospective amendment to the relevant Rule 57CC by virtue of the Finance Act, 2010 the assessee could reverse the proportionate credit availed on such inputs gone into manufacture of exempted final products. I find that at the time of passing of the said retrospective amendment, the Appeal has been pending before this Tribunal. Accordingly, following the judgement Honble Gujarat High Court in the case of Shree Rama Multi Tech Ltd. (supra) and the Tribunal in Dabur Pharma Ltd.s case (supra) it would be appropriate to remand the case to the adjudicating authority to allow the appellant to avail the benefit under the Finance Act,2010. Appeal allowed by way of remand. Miscellaneous Application also disposed of.

(Pronounced and dictated in the open court.)

SD/

(D.M.MISRA) MEMBER(JUDICIAL) sm

3 Appeal No.EA-608/07