M/S. Dhillon Kool Drinks & vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 213/NS/RTK/2006 dated 19.07.2006 passed by Commissioner of Central Excise (Appeals), Delhi III]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

Hon'ble Mr. B Ravichandran , Member (Technical)

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?

M/s. Dhillon Kool Drinks & Appellants Beverages Ltd.

Vs.

Commissioner of Central Excise Respondent

Delhi III

Appearance:

Shri Kamaljeet SIngh, Advocate for the Appellants

Shri Promod Kumar, Jt.CDR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Mr. B Ravichandran, Member (Technical)

Date of Hearing /decision: 8.7.2015

FINAL ORDER NO. A/ 52252/2015-EX(DB)

Per Ashok Jindal :

The appellant is in appeal against the impugned order wherein duty has been demanded by enhancing the assessable value of the inputs cleared to sister unit by the appellant.

2. The facts of the case are that the appellant is manufacturer of beverages, aerated waters. They are selling certain inputs to their sister unit and by reversing the cenvat credit availed thereon. The Revenue is of the view that as per Rule 57 AB (b) read with Notification No. 27/2000 CE(NT) dated 31.3.2000, if the inputs are cleared as such, same will be treated as inputs were manufactured by the appellant and they are required to pay duty on 115% of the value of cost of inputs. In these set of facts, proceedings were initiated against the appellant which resulted in demand of differential duty along with interest and imposition of penalty on the appellant.

3. Heard the parties.

4. In this case, the short issue before us is that whether the appellant are required to pay duty on 115% of the value of cost of inputs cleared to the sister unit under the provision of Rule 57AB(b) read with Notification No. 27/2000 CE(NT) dated 31.3.2000 during the period 1.4.2000 to 28.2.2001 or not.

5. The issue has been settled by Larger Bench of this Tribunal in the case of Eicher Tractors vs. CCE, Jaipur [2005 (189) ELT 131 (Tri-LB)] wherein Larger Bench of this Tribunal has observed as under:

6.?It is seen that the Board vide its circular dated 25-4-2005 has categorically said that clarifications given in this Circular supersede the earlier Circular dated 1-7-2002 . The revenue cannot argue against its own Circular, when the Board has stated that the provisions of the Rule 3(5) of the Cenvat Credit Rules, 2004 would apply in respect of the capital goods and inputs on which credit has been availed are removed as such. We may reproduce the said Rule 3(5) of the Cenvat Credit Rules, 2004 which reads as under :

3(5)?When inputs or capital goods, on which Cenvat credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9.

7.?In view of the said clarification and the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004, we hold that the reference has to be answered in favour of the appellants. Since no other issue arises in the said matter, the appeal is allowed.

6. As the Larger Bench of this Tribunal has held that reversal of Cenvat Credit availed on inputs is sufficient if the goods have been cleared as such, therefore, we hold that appellant are not required to pay duty on 115% of the value of inputs cleared to their sister concern. Consequently, the demands are not sustainable.

7. With these terms, we set aside the impugned order and allow the appeal with consequential relief, if not.

( Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

( B Ravichandran )

Member(Technical)

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