M/S. Rajpura Tin Manufacturing Co vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 31-32/CE/Appl/CHD-II/2011 dated 26/4/2011 passed by Commissioner of Central Excise (Appeals), Chandigarh]

For approval and signature:

Honble Mr Ashok Jindal, 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 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. Rajpura Tin Manufacturing Co. Appellants

Vs.

Commissioner of Central Excise Respondent

Chandigarh II

Appearance:

Shri Bipin Garg, Advocate for the Appellants

Shri R K Mishra, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 18. 6.2015

ORDER NO. FO/ 52009-52010 /2015 SM

Per Ashok Jindal :

The appellant has filed two appeals. Appeal No. E/2089/2011 has been filed against the impugned orders disallowing cenvat credit at the time of availing the cenvat credit on raw material, work in progress, and raw material contained in finished goods after crossing the exemption limit which Revenue sought to deny to the appellant. Appeal No. E/54709/2014 is against the rejection of the refund claim which appellant filed of the Cenvat credit sought to be denied to them (which was paid by the appellant during the proceedings initiated against him). As appeal No. 54709/2014 is the consequential appeal to appeal No. E/2089/2011, therefore, appeal No. 2089/11 is taken up for disposal first.

2. The facts of the case are that appellant is manufacturer of tin boxes and availing SSI exemption under notification No. 8/2003CE dated 1.3.2003. During the period 2006-2007 to 2007-2008 when threshold exemption limit crossed the appellant, availed the cenvat credit as per Rule 3(2) of CCR, 2004 on material contained in work-in-progress, raw material issued to the job worker and raw material contained in finished goods and filed a proper declaration before the authorities below. On examination of the declaration, cenvat credit sought to be denied on raw material contained in work-in-progress and finished goods. During the course of proceedings, they also reversed the cenvat credit when pointed out. Later on, show cause notice was issued to the appellant to appropriate the amount reversed by the appellant which was adjudicated by the adjudicating authority after obtaining report from the jurisdictional Superintendent who verified record and submits that the appellant has taken the cenvat credit correctly, except the meager amount of Rs.1856/-. Thereafter, the appellant filed the refund claim of duty paid by them which was also sanctioned to the appellant. Against the order of dropping, the proceedings in the show cause notice and allowing the refund claim, Revenue filed the appeals before Commissioner (Appeals) who set aside the orders of adjudicating authority. Therefore the appellant is in appeals before me.

3. Heard the parties. Perused the records.

4. On perusal of the record, I find that appellant has filed a declaration showing quantity of raw material as 125.026 and 53.253 MT respectively. He also filed a declaration of inputs contained in the finished goods as 1,361 MT and 1,848 MT respectively. The scrap lying in the factory is 1.120 MT and 6.015 MT respectively. The total raw material shown by the appellant on which the cenvat credit is taken is 127.507 MT and 61.116 MT respectively.

5. The declaration filed by the appellant has been verified by the Range Superintendent who observed as under:

From the above it is submitted that while taking into consideration the stocks of inputs the Audit Team, Chandigarh has not taken into account the stock of tinplate which was in process as on 16.11.2006 and 1.12.2007 weighing 9.784 MT and 4.214 MT respectively. Thus, the party had taken credit on the said inputs as per records and as per Law. Photocopies of the relevant portion of records maintained by the party at the material time duly attested by them are sent herewith for ready reference. It is again reiterated that the party was taking credit on the stock in process while crossing the exemption limit and paying duty on the such stocks while opting out and to claim exemption for the next financial year.

6. On perusal of the verification report filed by the Range Superintendent and same has been got verified from the record of the appellant. On verification, there was difference of 294 Kg in inputs contained in work-in-progress on which the adjudicating authority has denied the Cenvat credit to the appellant, which might be due to the calculation error. The finding of the learned Commissioner (Appeals) is that report of the Range Superintendent is afterthought and is not acceptable as appellant has filed declaration at the time of availing cenvat credit on inputs contained in finished goods, work-in-progress and with the job worker. Therefore, I hold that appellant is entitled to take cenvat credit on inputs contained in the process of finished goods and lying with the job worker as per Rule 3 (2) of CCR, 2004. In these circumstances, I hold that appellant has correctly taken the cenvat credit. Consequently, the appellant is not required to reverse the cenvat credit as demanded by learned Commissioner (Appeals) in Appeal No. E./2089/2011.

7. Relief sought by the appellant in E/54709/2014 is consequential relief of Appeal No. E/2089/2011. In these circumstances, the appellant succeeds in appeal No. E/54709/2014.

8. In these terms, by setting aside the impugned orders, appeals are allowed with consequential relief.

( Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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