M/S. Almonard P Ltd. Vs. Commissioner of Central. Excise, Chennai Iv - Court Judgment

SooperKanoon Citationsooperkanoon.com/943049
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Chennai
Decided OnApr-17-2009
Case NumberE/Stay/67 of 2009 & E/106 of 2009/MAS
Judge HON’BLE MR. P. KARTHIKEYAN, MEMBER (TECHNICAL)
AppellantM/S. Almonard P Ltd.
RespondentCommissioner of Central. Excise, Chennai Iv
Advocates:For the Appearing Parties: M.N. Bharati, Advocate. Ms. Uma Maheswari, Advocate. N.J. Kumaresh, SDR.
Excerpt:
m/s. almonard (p) ltd engaged in the manufacture of industrial fan and air curtains operated under convert scheme. on scrutiny of the records maintained by m/s. almonard (p) ltd, the authorities found that it had cleared final products availing full exemption during the year 2005-06. they had not maintained separate accounts of receipt, issue and inventory of the inputs relatable to dutiable final products and exempted final products as required under rule 6 of the convert credit rules, 2004 (ccr). they also did not reverse 10% of the sale price on clearance of the exempted goods as required under rule 6 (3)(b) of the ccr. the appellants reversed the convert credit relatable to the exempted goods before their clearance. the amount reversed fell short by rs.23,836/- under basic excise duty (bed) and rs.476/- towards education cases calculated at the rate of 10% of the value of the sale price of the exempted goods. adjudicating the show-cause notice issued in this connection the original authority demanded an amount of rs.23,836/- towards bed and rs.476/- towards education cuss. vide the impugned order the commissioner (appeals) upheld the order of the original authority. 2. in the appeal filed before the tribunal the appellants have challenged the demand relying on the various case law all of which held that once the input credit relatable to the exempted final product is reversed, the assessee was not required to pay any amount as prescribed in rule 6(3)(b) of the ccr. 3. ld. counsel for the appellants submitted a copy of the order of this tribunal in cce, chennai vs. magtorq (p) ltd [2008 (229) elt 691 (tri.chen)]. in the said decision, the tribunal held that the appellants therein were not required to pay any amount as a percentage of the sale price of the exempted goods in terms of rule 6 (3)(b) of the ccr as the appellants had already reversed the credit relatable to inputs used in the manufacture of exempted goods. the assessee had not manufactured final products which were chargeable to duty as well as those which were exempted from duty. 4. ld. sdr cites the decision of the larger bench of this tribunal in nicholas piramel (i) ltd vs. cce, thane [2008 (232) elt 37 (tri.lb)] wherein the tribunal had held that the provisions of rule 6(3)(b) of the ccr, 2002 were not applicable when the amount equal to the convert credit attributable to the common inputs used in or in relation to the manufacture of the exempted final product had been paid prior to removal of exempted final products from the factory. he submits that the records of the case including the appeal filed by the appellants do not indicate the date of reversal of the input credit relatable to the exempted final products by the appellants. he submits that the matter requires to be remanded to examine it whether the appellants were required to pay 10% of the sale price of the exempted goods as ordered by the lower authority. in view of the decision of the larger bench of the tribunal in nicholas pirmel (i) ltd. (supra) the matter had to be decided afresh by the authorities as the date of reversal of the credit relatable to the exempted goods cleared is not available from the records. in the circumstances, the case is remitted to the original authority to take a fresh decision in the light of the decision of the tribunal in nicholas piramel (i) ltd (supra). needless to say that the appellants shall be given an opportunity of being heard before taking a decision. 5. the appeal is allowed by way of remand.
Judgment:

M/s. Almonard (P) Ltd engaged in the manufacture of industrial fan and air curtains operated under Convert Scheme. On scrutiny of the records maintained by M/s. Almonard (P) Ltd, the authorities found that it had cleared final products availing full exemption during the year 2005-06. They had not maintained separate accounts of receipt, issue and inventory of the inputs relatable to dutiable final products and exempted final products as required under Rule 6 of the Convert Credit Rules, 2004 (CCR). They also did not reverse 10% of the sale price on clearance of the exempted goods as required under Rule 6 (3)(b) of the CCR. The appellants reversed the Convert Credit relatable to the exempted goods before their clearance. The amount reversed fell short by Rs.23,836/- under basic excise duty (BED) and Rs.476/- towards education cases calculated at the rate of 10% of the value of the sale price of the exempted goods. Adjudicating the show-cause notice issued in this connection the original authority demanded an amount of Rs.23,836/- towards BED and Rs.476/- towards education cuss. Vide the impugned order the Commissioner (Appeals) upheld the order of the original authority.

2. In the appeal filed before the Tribunal the appellants have challenged the demand relying on the various case law all of which held that once the input credit relatable to the exempted final product is reversed, the assessee was not required to pay any amount as prescribed in Rule 6(3)(b) of the CCR.

3. Ld. Counsel for the appellants submitted a copy of the order of this Tribunal in CCE, Chennai Vs. Magtorq (P) Ltd [2008 (229) ELT 691 (Tri.Chen)]. In the said decision, the Tribunal held that the appellants therein were not required to pay any amount as a percentage of the sale price of the exempted goods in terms of Rule 6 (3)(b) of the CCR as the appellants had already reversed the credit relatable to inputs used in the manufacture of exempted goods. The assessee had not manufactured final products which were chargeable to duty as well as those which were exempted from duty.

4. Ld. SDR cites the decision of the Larger Bench of this Tribunal in Nicholas Piramel (I) Ltd vs. CCE, Thane [2008 (232) ELT 37 (Tri.LB)] wherein the Tribunal had held that the provisions of Rule 6(3)(b) of the CCR, 2002 were not applicable when the amount equal to the Convert credit attributable to the common inputs used in or in relation to the manufacture of the exempted final product had been paid prior to removal of exempted final products from the factory. He submits that the records of the case including the appeal filed by the appellants do not indicate the date of reversal of the input credit relatable to the exempted final products by the appellants. He submits that the matter requires to be remanded to examine it whether the appellants were required to pay 10% of the sale price of the exempted goods as ordered by the lower authority. In view of the decision of the Larger Bench of the Tribunal in Nicholas Pirmel (I) Ltd. (supra) the matter had to be decided afresh by the authorities as the date of reversal of the credit relatable to the exempted goods cleared is not available from the records. In the circumstances, the case is remitted to the original authority to take a fresh decision in the light of the decision of the Tribunal in Nicholas Piramel (I) Ltd (supra). Needless to say that the appellants shall be given an opportunity of being heard before taking a decision.

5. The appeal is allowed by way of remand.