V.S.T Tillers And Tractors Ltd vs Commissioner Of Central Excise, ...

E/Stay/2188/2012, E/Stay/2189/2012, E/Stay/2474/2012, E/Stay/2475/2012, E/Stay/21054/2014 in E/3030/2012-DB, E/3031/2012-DB, E/3400/2012-DB, E/3401/2012-DB, E/20947/2014-DB

Appeal(s) Involved:

E/3030/2012-DB, E/3031/2012-DB, E/3400/2012-DB, E/3401/2012-DB, E/20947/2014-DB

Sl. No. (1) (3) (4) [Arising out of Order-In-Appeal No. 343/2012 dated 01/08/2012 passed by the Commissioner of Central Excise, Mangalore]

Sl. No. (2) [Arising out of Order-In-Appeal No. 342/2012 dated 01/08/2012 passed by the Commissioner of Central Excise, Mangalore]

Sl. No. (5) [Arising out of Order-In-Appeal No. MYS-EXCUS-000-DIVII-APP-HAB-060-13-14 dated 13/12/2013 passed by the Commissioner of Central Excise, Mysore ]

For approval and signature: HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. 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? 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

V.S.T Tillers And Tractors Ltd. SY.No.20, Plot No.42/43, Metagally Industrial Area, Mysore Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax, Mysore S1-S2, Vinaya Marga, Siddhartha Nagar, Mysore  570 011, Karnataka Respondent(s)

Appearance:

Mr. M.S Manjunath, Consultant No. 884, 16th Cross, 9th Main, D Block, Sahakaranagar, Bangalore - 560 092 For the Appellant

Mr. Mohd. Yusuf, AR For the Respondent

Date of Hearing: 01/01/2015 Date of Decision: 01/01/2015 CORAM:

HON'BLE Mrs. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE Mr. B.S.V.MURTHY, TECHNICAL MEMBER

Final Order Nos. 20001-20005 / 2015

Per: ARCHANA WADHWA

After dispensing with the condition of pre-deposits in all the cases, we proceed to decide the appeals itself inasmuch as a short issue is involved.

2. The appellants are engaged in the manufacture of dutiable as well as exempted final products. In respect of inputs used in both the types of excisable goods, they were admittedly maintaining separate accounts and there is no dispute about the same. However in respect of common input services, as it was not possible to maintain the separate accounts, they were reversing the proportionate credit taken on the common input services, which were relatable to exempted goods.

3. Proceedings were initiated against the appellant for confirmation of demand at the rate of 5/8/10% of the value of the exempted final products, in terms of the provisions of Rule 6(3) of the Cenvat Credit Rules besides demands, which were raised vide different show-cause notices and stand confirmed by the lower authorities primarily on the ground that the provisions of Rule 6 do not provide for simultaneous maintenance of separate accounts for inputs and a common cenvatable account for input services.

4. The contention of the appellant is that there is nothing in the said Rule to debar following of such a procedure. Inasmuch as it was feasible for them to maintain separate accounts for inputs, they have done so and as it was not practical to maintain separate accounts in respect of input services, they have reversed the proportionate credit of service tax availed on the common cenvatable services.

5. We find force in the above contention of the appellant. Admittedly the provisions of Rule 6, nowhere lay down that such a simultaneous procedure followed by an assessee in respect of inputs and input services cannot be followed. In the absence of the same, to read so in the said Rule would amount to introducing a condition in the Rule, which is not permissible. As such we are of the view that if the appellant has maintained separate accounts for the inputs and has reversed the proportionate cenvat credit in respect of input services, the provisions of Rule 6(3) do not get attracted.

6. At this stage learned DR has expressed doubt about the correct quantum of reversal, as the authorities below have not verified the same, on account of rejecting their contention on the legal issue itself. In view of the above, we set aside the impugned order and remand the matter to original adjudicating authority to verify the appellants claim of reversal of cenvat credit in respect of input services, in relation to the quantum of the same. All the stay petitions as also appeals get disposed of in the above manner.

(Order pronounced and dictated in open court)

(B.S.V. MURTHY) TECHNICAL MEMBER (ARCHANA WADHWA) JUDICIAL MEMBER

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