M/S. Jubilant Life Sciences Ltd vs Cce-Meerut-Ii

[Arising out of Order-in-original no. 34/Commissioner/Meerut/2012-13 dated 28.02.2013 passed by The Commissioner, Customs & Central Excise, Meerut-II]

1. Whether Press Reporter may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would 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 Department Authorities?

M/s. Jubilant Life Sciences Ltd. Appellant

Vs.

CCE-Meerut-II Respondent

Appearance: Shri Devender Sharma, Advocate for the appellant

Shri Ranjan Khanna, DR for the respondent.

Coram: Honble Shri Ashok Jindal, Member (Judicial)

Honble Shri B.Ravichandran, Member (Technical)

Final Order No. 52444/2015

Per: Ashok Jindal

Appellant is in appeal against the impugned order demanding duty, interest and penalty against them by way of the impugned order. The facts of the case are that the appellant is manufacturer of dutiable as well as exempted final product. During the course of manufacturing of the final product, the steam is required for generation of electricity. The appellant procured coal and also availing the service of coal handling. During the course of the generation of electricity, steam is generated. Out of this steam, some steam has gone to the manufacturing of electricity which was used in final dutiable product and some of the steam goes to the generation of electricity to be used in manufacture of final exempted product, i.e., fertilizer. As the appellant is not maintaining separate account of coal handling service, the Revenue is of the view that the appellant has contravening the provision of Rule 6 of the CENVAT Credit Rules, 2004, therefore, the appellant is liable to pay an amount equal to 8% /10% of the final exempted product. In this set of facts, proceedings were initiated against the appellant for the period January, 2007 to October, 2010 by issuance of show cause notice dated 6/2/2012 by invoking extended period of limitation. The show cause notice was adjudicated. Impugned demands were confirmed. Aggrieved from the said order, the appellant is before us.

2. Ld. counsel for the appellant submits that at the time of audit, it was pointed out to them that for generation of steam which has been used for generation of electricity which was ultimately used for manufacture of final exempted product, they are not entitled to take CENVAT Credit on the service of coal handling. At that time, the appellant reversed the CENVAT Credit attributable to coal handling services along with interest. Therefore, the said reversal is required sufficient and the proceedings were not required to be initiated against the appellant. Although the proceedings have been initiated against the appellant by issuance of show cause notice by invoking the extending period of limitation, the same are not sustainable in the eyes of law as appellant has already reversed the CENVAT Credit attributable to coal handling charges which has been used for manufacturing of final exempted product as per Finance Act, 2010. He, further submits that the show cause notice has been issued by invoking extended period of limitation, same is not sustainable in the eyes of law as periodical audits were conducted by the department and assessments have been done by holding that the appellant is entitled to take CENVAT Credit on coal handling charges and not required to pay any amount on clearance of their final exempted product.

2. On the other hand, ld. AR opposed the contention of the ld. counsel and submits that there was contradictory statements of the appellant. During the course of proceedings, sometimes he admits that they are taking CENVAT Credit on coal handling charges which ultimately used for manufacturing of dutiable as well as final exempted products and sometimes they are making statement contrary to that. Therefore, as appellant has reversed the CENVAT Credit attributable to coal handling service used for manufacturing of final exempted product, the appellant has contravened the provision of Rule 6 of CENVAT Credit Rules, 2004. Therefore, the appellant is required to pay 8%/10% of the value of final exempted product as held by the Adjudicating Authority.

3. Heard the parties and considered the submissions.

4. As stated by the ld. counsel for the appellant when the audit objection was raised they have already reversed the CENVAT Credit attributable to coal handling charges which was ultimately used for generation of steam, which was used for generation of electricity, which was ultimately used for manufacture of final exempted product along with interest. In that circumstances, the show cause notice was not required to be issued. Ld. counsel for the appellant has also contested the issue of limitation to say that when periodical audits were conducted, extended period of limitation is not invokable. But he fairly conceded that if reversal of CENVAT Credit along with interest is found to be sufficient in that case, he will not contest the issue of limitation. As observed hereinabove, we hold that the CENVAT Credit reversed by the appellant along with interest is sufficient in this matter as per the Finance Act, 2010 and the show cause notice was not required to be issued. Therefore, impugned proceedings against the appellant are set aside. Consequently, the appeal is allowed with consequential relief, if any.

(Ashok Jindal)

Member (Judicial)

(B. Ravichandran)

Member (Technical)

Ritu