M/S. Jakaraya Sugar Limited vs Commissioner, Central Excise, ...

[Arising out of Order-in-Appeal No. PII/VM/40/2010 dated 23/2/2010 passed by the Commissioner of Central Excise (Appeals), Pune]

For approval and signature:

Honble Mr Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No 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 : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Jakaraya Sugar Limited : Appellants

VS

Commissioner, Central Excise, Pune-III : Respondent

Appearance

Shri. Deepak Marne, Cost Accountant for the Appellants Shri. H.M. Dixit, Asstt. Commissioner (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 23/6/2015 Date of decision: 23/6/2015

ORDER NO.

Per : Ramesh Nair

This appeal is directed against Order-in- Appeal No. PII/VM/40/2010 dated 23/2/2010 passed by the Commissioner of Central Excise (Appeals), Pune, wherein Ld. Commissioner(Appeals) upheld the impugned order and rejected th appeal of the appellant.

2. The issue involved in the present case is admissibility of the Cenvat credit in respect of cement, steel bars and PVC pipes used for building construction. The demand was raised in the show cause notice for the normal period of one year.

3. Shri. Deepak Marne, Ld. Cost Accountant for the appellant made categorical statement by the instruction of the appellant that they have paid the entire demand of Cenvat credit hence they are not contesting the demand. He submits that the appellant is contesting only penalty of equal amount under Section 11AC. He further submits that since the show cause notice was issued for the demand pertains to normal period of one year, penalty under Section 11AC should not have been imposed. He further submits that demand is for the period prior to the amendment notification No. 16/09-CE (NT) dated 7/7/2009 by which the item such as cement, steel etc. used for construction was excluded from the definition of input provided under clause 2(k) of CCR, 2004 for this reason even Cenvat Credit was also admissible prior to this amendment therefore penalty under Section 11AC should not have been imposed.

4. On the other hand, Shri. H.M. Dixit, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.

5. I have carefully considered the submissions made by both sides.

6. I find that there is no dispute in the facts of the case that appellant has availed Cenvat Credit in respect of Cement, steel, PVC pipe etc., which was used for construction of the building. Appellant is not contesting Cenvat Credit therefore I am not inclined to give any findings on the admissibility of the Cenvat credit. As regard the penalty under Section 11AC same is not admissible for the reason that firstly the show cause notice was issued for normal period of demand i.e. within one year, Secondly the issue was highly contentious and much water was flown on the issue and finally the issue decided in the Vandana Global Ltd. V/s. Commissioner of C. Ex., Raipur [2010 (253) E.L.T. 440 (Tri. - LB)] by this Tribunal. I also take note of the amendment Notification No. 16/09 CE(NT) dated 7/7/2009 by which the goods such as Cement, steel, etc used for construction of the building has been excluded and the period of the demand in the present case pertaining to June 2009; majority period is prior to the amendment notification. Considering the above facts, I am of the view that penalty under Section 11AC was wrongly imposed by the original authority and also wrongly upheld by the Commissioner(Appeals). I therefore modify the impugned order. Penalty under Section 11AC is set aside. However the demand of Cenvat Credit and interest thereon is upheld. The appeal is partly allowed in above terms.

(Dictated in court)

Ramesh Nair Member (Judicial)

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