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TAXAP/10/2008 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No.10 of 2008
=========================================================
THE
COMMISSIONER, CENTRAL EXCISE & CUSTOMS, - Appellant(s)
Versus
M/S
SUNRISE CHEMICALS INDUSTRIES, - Opponent(s)
=========================================================
Appearance :
MR
YN RAVANI for Appellant(s) : 1,
None for Opponent(s) :
1,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HON'BLE
SMT. JUSTICE ABHILASHA KUMARI
Date
: 16/10/2008
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE D.A.MEHTA)
The
appellant-Revenue has proposed the following two questions:
(a) Whether in the facts
and circumstances of the case, the Tribunal is justified in relying
upon the decision of the Tribunal, rendered in the case of Suntech
Glass Pvt. Ltd., reported in 2006(199) ELT 5177?
(b) Whether in the facts and
circumstances of the case, the Tribunal is justified in setting aside
the order of the authorities below despite the wrongful availment of
Cenvat Credit by the respondent on capital goods of which the
respondent was not owner?
The
case of Revenue, as propounded by the learned counsel for the
appellant, is that respondent-assessee is carrying on job-work for
M/s.Pidilite Industries Limited. That the capital goods which were
used for the purposes of manufacturing final product were owned by
M/s. Pidilite Industries Limited and did not appear in the
balance-sheet of respondent-assessee for financial year 2004-05.
That though the capital goods may have been received by
respondent-assessee from M/s. Pidilite Industries Limited, the said
capital goods having not been installed in the factory premises of
M/s. Pidilite Industries Limited, the owner of the capital goods,
the credit of excise duty paid on such capital goods cannot be
availed of by respondent-assessee, who is only doing jobwork for
M/s. Pidilite Industries Limited.
As
the adjudicating officer did not grant credit for the duty paid on
capital goods, the assessee carried the matter in appeal before
Commissioner (Appeals) but did not succeed. The second appeal was
filed before the Customs, Excise and Service Tax Appellate Tribunal,
West Zonal Bench, Ahmedabad ( the Tribunal). The Tribunal has held
that there is nothing in CENVAT Rules which supports the view that
credit will be available only if the burden of duty is borne by the
input purchasing manufacturers. Applying the aforesaid ratio to the
facts of the case, the Tribunal has allowed the appeal holding that
the denial of credit was not correct.
CENVAT
Credit Rules, 2002, define capital goods under Rule 2(b) of
the Rules. Rule 3, as is material for the present, reads as under:
(1) A manufacturer or
producer of final products shall be allowed to take credit
(hereinafter referred to as the CENVAT credit) of —
(i) the duty of excise
specified in the First Schedule to the Tariff Act, leviable under
the Act;
(ii) the duty of excise
specified in the second schedule to the Tariff Act, leviable under
the Act;
(iii)the additional duty of
excise leviable under section 3 of the Additional Duties of Excise
(Textile and Textile Articles) Act, 1978 (40 of 1978);
(iv) the additional duty of
excise leviable under section 3 of the Additional Duties of Excise
(Goods of Special Importance) Act, 1957 (58 of 1957);
(v) the National Calamity
Contingent duty leviable under section 136 of the Finance Act, 2001
(14 of 2001), as amended by section 169 of the Finance Act, 2003 (32
of 2003);
(vi) the additional duty
leviable under section 3 of the Customs Tariff Act, equivalent to the
duty of excise specified under clauses (i), (ii), (iii), (iv) and (v)
above; and,
(vii)the additional duty of
excise leviable under section 157 of the Finance Act, 2003 (32 of
2003),
paid on any inputs or capital
goods received in the factory on or after the first day of March,
2002……
Thus,
on overall reading, it is apparent that credit is available to a
manufacturer or producer of final product, which means excisable
goods manufactured or produced and such credit is for the duty paid
on any inputs or capital goods received in the factory after the
prescribed date. Admittedly, the capital goods in question were
received in the factory of the respondent-assessee and were used for
the purposes of manufacturing final product which is an excisable
item. The Rule nowhere prescribes installation of the capital goods,
nor does the Rule refer to ownership of the capital goods. The only
requirement prescribed by the Rule is use of capital goods received
in the factory after the prescribed date and used in the manufacture
or production of final products. The respondent-assessee has
fulfilled all the requisite conditions of the Rule.
It
is not the case of appellant-Revenue that even M/s. Pidilite
Industries Limited had claimed credit for the same capital goods
which were supplied by M/s. Pidilite Industries Limited to
respondent-assessee. In the circumstances, there is no legal
infirmity in the impugned order of Tribunal so as to warrant
interference.
The
Appeal is accordingly dismissed in absence of any question of law,
much less a substantial question of law.
(D.A.Mehta,
J.)
(Smt.Abhilasha
Kumari, J.)
(sunil)
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