Rayalaseema Industries India Pvt. Ltd vs Commissioner Of Central Excise, ...

E/Stay/25604/2013, E/Stay/25605/2013 in E/25465/2013-SM, E/25466/2013-SM

Appeal(s) Involved:

E/25465/2013-SM, E/25466/2013-SM

[Arising out of Order-in-Appeal No. 78/2012 dated 22/10/2012 passed by the Commissioner of Customs, Central Excise and Service Tax, Hyderabad-III ] [Arising out of Order-in-Appeal No. 84/2012 dated 28/12/2012 passed by the Commissioner of Customs, Central Excise and Service Tax, Hyderabad-III ]

For approval and signature:

HON'BLE MRS ARCHANA WADHWA, JUDICIAL MEMBER

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes

Rayalaseema Industries India Pvt. Ltd. Survey Nos. 116/2/A, Teegapur, Kothur Mandal, Mahaboobnagar  509 228 Andhra Pradesh Appellant(s)

Rayalaseema Steel Re-Rolling Mills Pvt. Ltd. Survey Nos. 1941 to 1943, Nandigaon, Kothur Mandal, Mahaboobnagar  509 228 Andhra Pradesh Appellant(s)

Versus

Commissioner of Central Excise, Customs And Service Tax Hyderabad-III Opp. LB Stadium Road, Basheerbagh, Hyderabad  500 004 Andhra Pradesh Respondent(s)

Appearance:

Mr R. Muralidhar, Advocate B-201, Highrise Apartments, 1-3-1024/8, Lower Tankbund Road, Gandhinagar Po, Hyderabad-500 080 Andhra Pradesh For the Appellant

Mr Ajay Saxena, DR For the Respondent

Date of Hearing: 27/10/2015 Date of Decision: 27/10/2015 CORAM:

HON'BLE MRS ARCHANA WADHWA, JUDICIAL MEMBER

Final Order Nos. 22103 - 22104 / 2015

Per: ARCHANA WADHWA

Both the appeals are being disposed of by a common order as the issue involved is identical.

2. Vide his impugned orders, the lower authorities have denied the cenvat credit of Rs. 25,09,800/- (Rupees Twenty Five Lakhs Nine Thousand and Eight Hundred only) and Rs. 7,49,068/- (Rupees Seven Lakhs Forty Nine Thousand and Sixty Eight only) availed by the appellant during the period December 2007 to June 2011, in respect of various iron and steel items. In addition interest also stands confirmed and penalties of identical amounts have been imposed under Section 11AC of the Central Excise Act. The Revenue, for denial of the credit, has relied upon the Larger Bench decision of the Tribunal in the case of Vandana Global Ltd. [2010 (253) E.L.T. 440 (Tri.-LB)] laying down that various iron and steel items used as supporting stucturals are not cenvatable.

3. Learned advocate appearing for the appellant has assailed the impugned order on the point of limitation inasmuch as show-cause notice stands issued on 08.09.2011 for the period December 2007 to June 2011. By relying upon various earlier decisions of the Tribunal, which have held that inasmuch as prior to Larger Bench decision of the Tribunal in the case of Vandana Global, various decisions were in favour of the assessee, no malafide can be attributed to them to invoke the longer period of limitation, has prayed for setting aside the demand falling within the limitation period. It stands further pleaded that in respect of the demand falling within the limitation period, they have specifically pleaded before the lower authorities that various items were used for fabrication of capital goods, in which case cenvat credit of duty paid thereon would be available, even in terms of the law declared by the Larger Bench in the case of Vandana Global. As such the prayer is to remand the matter.

4. Learned DR appearing for the Revenue has drawn my attention to the Allahabad High Courts decision in the case of Commissioner of Customs and Central Excise, Ghaziabad Vs. Rathi Steel and Power Ltd. [2015 (321) E.L.T. 200 (All.)] wherein the Honble High Court, in the facts and circumstances of that case has held that the invocation of longer period of limitation, in respect of the credit availed on various steel items used as supporting structurals, was justified and has accordingly reversed the order of the Tribunal.

5. I have considered the submissions made by both the sides. It is a fact that during the period involved in the present case, the earlier decisions of the Tribunal were in favour of the assessee and the Larger Bench decision in the case of Vandana Global Ltd. was passed in the year 2010. As such I find that there was enough reasons for the assessee, based upon the earlier decisions of the Tribunal, to entertain a bona fide belief that they are entitled to the credit paid on such items. Such credit was also availed by reflecting the same in the statutory records. The decision of the Honble Allahabad High Court in the case of Rathi Steel and Power Ltd. referred supra is in the facts and circumstances of that particular case.

6. In any case I find that the Larger Bench decision of the Tribunal in the case of Vandana Global Ltd., does not stand approved by the Honble High Court of Gujarat in the case of Mundra Ports & Special Economic Zone Ltd. Vs. CCE & Cus. [2015 (39) S.T.r. 726 (Guj.)]. While dealing with the said decision of the Tribunals Larger Bench, the Honble High Court has observed as under:

8. We have carefully gone through the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 2004 which come into force on 7-7-2009 was clarificatory amendment as there is nothing to suggest in the Amending Act that amendment made in Explanation 2 was clarificatory in nature. Wherever the Legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/or input and as such, the amendment could operate only prospectively. In our opinion, the view taken by the Tribunal is based on conjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amendment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgment. There is no material to support that there was any legislative intent to clarify any existing provision.

7. Apart from above I also note that the appellant has taken a categorical stand that some of the items were used by them for construction of capital goods, which plea of the appellant does not stand adverted by the lower authority. In such a scenario I am of the view that the impugned order is liable to be set aside and matter requires fresh decision in the light of the Honble Gujarat High Courts decision as also for verification of the factual position. The plea of limitation would also be reconsidered by the adjudicating authority. Appeals are thus allowed by way of remand.

(Order pronounced in open court on )

(ARCHANA WADHWA) JUDICIAL MEMBER

iss