Nitin Enterprises vs Cce, Jammu & Kashmir

(Arising out of Order-in-Appeal No.JNK-EXCUS-000-APP-274- 278-13-14 dt.136.2014 passed by the CCE(Appeals), Chandigarh)

Date of Hearing/Decision: 10.03.2015

Honble Mr.Rakesh Kumar, Member (Technical)

Honble Mr.S.K.Mohanty, 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?

Nitin Enterprises Appellant

Vs.

CCE, Jammu & Kashmir Respondent

Present for the Appellant: Shri Nikhil Virkar, Rep., Advocate

Present for the Respondent: Shri M.S.Negi, AR

Coram: Honble Mr.Rakesh Kumar, Member (Technical)

Honble Mr.S.K.Mohanty, Member (Judicial)

FINAL ORDER NO.50769-50770/2015

PER: RAKESH KUMAR

The appellant are manufacturer of caulking compound & liquid sealants, rust disintegrator, PVC solvent, gasket plastic, rapid drain, etc. chargeable to duty under chapters 27,32,34 & 35 of Central Excise Tariff Act, 1985. Since their unit is located in the area specified under Notification No.56/02-CE dated 14.11.02, they are availing of this exemption. The period of dispute in this case is from January, 2013 to March, 2013. Notification No.56/02-CE dated 14.11.02 exempts the goods mentioned in Annexure I to this exemption notification and the manufactured and cleared from the unit located in the industrial areas notified in Annexure II to this notification from the duty leviable under section 3(1) of Central Excise Act, 1944, Additional Excise Duties leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957 [AED(GSI)] and Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 [AED (T&TA)] to the extent of these duties are paid through PLA after payment of duty in respect of the goods cleared during the month to the extent possible through cenvat credit available at the end of the month. Thus, under this exemption notification, the manufacturer was required to first pay the duty in respect of the goods cleared during month through cenvat credit available at the end of month to the extent possible and pay the duty, if any still payable, through PLA and it is this, duty paid through PLA which is refundable. The refund was available as self-credit which was to be approved  by the Assistant Commissioner or could be taken on being sanctioned by the Assistant Commissioner. However by amending notification No.19/08-CE dt.27.3.08 and 34/08-CE dt.10.6.08, the benefit of exemption was restricted to duty payable on the value addition at the rate specified for various products in the exemption notification or duty paid from PLA in the manner specified in this notification, whichever is lower. The appellant in this case had availed the benefit of notification in excess of cap prescribed by amending notification No.19/08-CE dt.27.3.08 and 34/08-CE dt.10.6.08. The duty demand of Rs.33,47,741/- was made on this basis.

2. The first point of dispute is as to whether the appellant would be eligible for full refund of duty paid through PLA in the manner specified in this notification or whether this benefit of notification is restricted to the duty payable on the value addition at the rate specified in the exemption notification or duty paid form PLA in the manner specified in this notification, whichever is lower. The appellant in this case had claimed refund in excess of the cap specified by the amending notification No.19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08.

3. The second point of dispute in this case is as to whether the education cess and secondary and higher secondary education cess (S&H cess) paid through PLA are also exempted in this notification. According to the appellant, they had not taken self-credit of education cess and S&H cess paid through PLA while according to the department, they have taken credit to the extent of Rs.2,63,949/-.

4. The Commissioner (Appeals) by the impugned order has dismissed the appeal as premature on the ground that while Single Bench of Jammu & Kashmir High Court vide judgement dated 23.12.2010 in the case of Reckitt Bencksier (India) Ltd. 2011 (263) ELT 194 (J&K) has quashed the amending notification 19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08, the department has filed LPA against that judgement and in respect of writ petition filed by the appellant before Honble High Court challenging validity of the amending Notification 19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08, High Court has ordered that  implementation of the notification under challenge shall await the result of the LPA as is pending judgement dated 23.12.2010.

5. Heard both sides.

6. Both sides agree that with regard to the refund of education cess and secondary and higher secondary cess while the appellants submission has been recorded by the Commissioner (Appeals) in para 4 of the order that they had not taken self-credit of education cess and S&H cess, and therefore the question of its recovery does not arise, the Commissioner (Appeals) has not given any finding on this point. He has simply rejected the appeal as premature based on the order of Jammu & Kashmir High Court in respect writ petition filed by the appellant challenging validity of the amending Notification 19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08.

7. It is seen that the appellant in this case have filed writ petition (OWP No.541/2012/CMP No.739/2012) before Jammu & Kashmir High Court challenging validity of the amending Notification 19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08 and High Court vide its order dated 12.4.2012 in respect of writ petition has ordered that --- implementation of the notification under challenge shall await the result of LPA as is pending judgement dated 23.12.2010. In our view pending decision of LPA, the department cannot implement amending Notification 19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08 which have been challenged by the appellant before the High Court. Therefore, appeal filed by the appellant against the Assistant Commissioners order rejecting the refund claim, cannot be said to be premature. The Commissioner (Appeals) should have disposed of the appeals after decision of the LPA filed by the department against the High Courts judgement in the case of Reckitt Bencksier (India) Ltd. (supra), and he should have kept the appeals pending till the decision of the LPA and he could not dismiss them as premature.

8. In view of above discussion the impugned order is set aside and the matter is remanded back to the Commissioner (Appeals) to decide the disputed refund claim of education cess and S&H cess in respect of the appellants plea that they have not taken self-credit of education cess and S&H cess, therefore the question of its recovery does not arise.

9. As regard the issue regarding the benefit of exemption notification No.56/02-CE excess of the ceiling prescribed under Notification 19/08-CE dt.27.3.08 and Notification 34/08-CE dt.10.6.08, the Commissioner (Appeals) must keep the matter pending till decision of LPA filed by the department against the judgement of High Court in the case of in the case of Reckitt Bencksier (India) Ltd. (supra)

9. Both appeals stand disposed as above.

(Pronounced in the open court)

(S.K.MOHANTY) (RAKESH KUMAR)

MEMBER (JUDICIAL) MEMBER(TECHNICAL)

mk

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