Universal Air Products Pvt Ltd vs Commissioner Of Central Excise, ...
- CitationAppeal No 533-2013
Ratio decidendi
The rule this decision rests on
Where a manufacturer transfers goods to its own second unit, and the second unit undertakes a packing activity that does not amount to manufacture, the second unit is not entitled to take CENVAT credit on the duty paid at the first unit, since no manufacture takes place at the second unit and the credit is therefore not available. Where the assessee, having been informed by the authorities that credit was not available, continued to take the credit, a penalty is attracted; the Tribunal holds that a penalty of Rs. 5,000 in each case meets the ends of justice, and accordingly sets aside the credit demand with interest and the mandatory penalty.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
E/Stay/20348/2014, E/Stay/20349/2014, E/Stay/20350/2014, E/Stay/20351/2014 in E/20352/2014-SM, E/20353/2014-SM, E/20354/2014-SM, E/20355/2014-SM
Appeal(s) Involved:
E/20352/2014-SM, E/20353/2014-SM, E/20354/2014-SM, E/20355/2014-SM
[Arising out of Order-In-Appeal No 533-2013 dated 21/10/2013 passed by Commissioner of Central Excise (Appeals), BANGALORE-II ]
[Arising out of Order-In-Appeal No 534-2013 dated 22/10/2013 passed by Commissioner of Central Excise(Appeals) , BANGALORE-II ]
[Arising out of Order-In-Appeal No 535-2013 dated 22/10/2013 passed by Commissioner of Central Excise (Appeals), BANGALORE-II ]
[Arising out of Order-In-Appeal No 536-2013 dated 22/10/2013 passed by Commissioner of Central Excise (Appeals), BANGALORE-I( Appeal) ]
For approval and signature:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER
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?
Universal Air Products Pvt Ltd Plot No.22a,3rd Stage,peenya Indl.area BANGALORE - 560058 KARNATAKA Appellant(s)
Versus
Commissioner of Central Excise, Service Tax And Customs Bangalore-ii PB 5400 CR BUIDING...QUEENS ROAD, BANGALORE, - 560001 KARNATAKA Respondent(s)
Appearance:
Shri M.A. Narayana, Advocate CUSECS CONSULTANTS FLAT 'A'GR.FLOOR, "SEVEN HILLS EXCELLENCY" #33, 2ND CROSS, SBM COLONY, BRINDAVAN NAGAR, MATHIKERE, BANGALORE 560054 For the Appellant
Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent
Date of Hearing: 23/01/2015
Date of Decision: 23/01/2015
CORAM:
HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER
Final Order No. 20128-20131 / 2015
Per : B.S.V.MURTHY
In all the appeals, issue involved is same. The issue involved is whether the appellant, who is engaged in manufacture of copper coated MS wires, is eligible for CENVAT credit. After manufacturing the copper coated MS wires, duty was paid on such wires and the same was transferred to Unit-II. Unit-II took the credit of duty paid, undertook packing activity and cleared on payment of duty. It is the submission of the learned counsel that in all the cases, the amount of duty paid was more than the amount of credit taken since the packing cost has been added. Therefore he submits that it has to be held that the entire amount of CENVAT credit taken by them has already been reversed. He also submits that the issue is no longer res integra and there are several decisions taking a view that in such cases assessee is entitled to credit. He relies upon the decision in the case of CCE Vs. Delta Corporation [2013(287) ELT 15 (Guj.)].
2. Learned AR would oppose the same saying that knowing well that credit is not available, the appellants have taken the credit and therefore the proceedings initiated are appropriate.
3. After hearing both the sides and considering the submissions, I find that the issue itself can be finally decided rather than postponing the issue after a number of years. Accordingly, the requirement of predeposit is waived and appeals are taken up for final decision.
4. In addition to the above cited decision, learned counsel had also cited two more decisions. But in none of the cases the situation was not the one where the same appellant had two units. Therefore I cannot say that the decisions can be applied to the facts of the case. Nevertheless, in view of the decisions cited, the decisions were rendered taking a view that even when there is no manufacture, credit can be taken. The only difference is that in the case of the appellant, the goods were transferred to their own unit, whereas in other cases, input suppliers were there. In my opinion, appellants could have exercised and should have exercised proper assessment process in which case, there would have been no need to pay the duty again by the second unit after taking credit since there is no manufacture in the second unit. Even after the appellants were informed by the authorities, they went on taking the credit. Having regard to the facts and circumstances, in my opinion, the appellants are liable for imposition of penalty of Rs.5000/- that would meet the ends of justice. Accordingly the demand for CENVAT credit with interest is set aside and mandatory penalty is also set aside. In each case, the appellant is directed to pay a penalty of Rs.5000/- (Rupee five thousand only). Appeals are disposed of in above terms.
(Order pronounced and dictated in open court)
B.S.V.MURTHY TECHNICAL MEMBER
Raja.
4
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