At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: RAJU
By, MEMBER (TECHNICAL)
For Petitioner: Pankaj Rathore, Advocate And For Respondents: Ajay Kumar, ADC (AR)
1. The appellants Hindustan Composites Ltd. are in appeal against demand of credit on sulphur powder received by them on payment of duty.
2. Ld. Counsel for the appellant argued that they had received sulphur powder from M/s. Standard Chemical Pvt. Ltd., Mumbai. The said product is used as an input of manufacture of the final product. Ld. Counsel argued that credit is sought to be denied to them on the ground that the supplier of the said product has wrongly paid duty on the said product as the process of drying, pulverising, sieving and packing of sulphur into fine quality powder does not amount to manufacture. He pointed out that for the subsequent period demand on the same ground have been dropped by the Commissioner (Appeals) vide order dated 27.01.2016 and 22.03.2016. He pointed out that the orders have been accepted by the revenue.
3. Ld. AR relied on the impugned order.
4. I have gone through the rival submissions. It is seen that after examining a number of decisions in the appellant's favour, the Commissioner (Appeals) in the impugned order has observed as follows:-
"The case law reported in : 2009-TIOL-1250-CESTAT-MUM (in case of M/s. Ajinkya Enterprises v. CCE Pune III) : 2013 (288) ELT (Tri-Mumbai) Ajinkya Enterprises v. CCE Pune III) and 2007 (207) ELT 691 (Tri-Mum) (in case of Jumbo tanks & Equipments Pvt. Ltd. versus CCE Thane III) relied upon by the appellant are only indirectly applicable to the case at hand. In contrast Board's circular No. 911/01/2010-CX dated 14th Jan., 2010 is squarely on this issue.
On this issue, this authority, the revenue and the appellant all are bound by the Board's Circular No. 911/01/2010-CX dated 14th Jan., 2010 issued from F. No. 267/116/2009-CX-8, the relevant extract of which is reproduced below:
3. In view of above, following instructions are issued:-
(i) In cases, where the process undertaken by an assessee indisputably does not amount to manufacture, the department should inform the assessee about the correct legal position and advise him not to pay duty and not to avail credit on inputs.
(ii) If the assessee has already paid duty, and in a situation where there is no manufacture as held by the Courts subsequently, and facts of the case are covered by the provisions of Section 5B of the Central Excise Act, 1944, the assessee is at liberty to approach the Central Govt. For issue of appropriate notification for regularisation of the cenvat credit availed.
In view of the above, the correct procedure would be for the appellant to approach the Central Govt. for issue of appropriate notification for regularisation of the cenvat credit availed."
The appeal is disposed off in the above terms.
5. It can be seen that the Commissioner (Appeals) has not decided the issue of admissibility of credit but has relied on the CBEC circular to issue an advice to the appellant.
6. I find that subsequent orders of Commissioner (App
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eals) dated 27.01.2016 and 22.03.2016 are clearly in favour of the appellant and same has not been challenged. It is not open to the revenue officers having jurisdiction over the purchaser to question the assessment made by the officers having jurisdiction over the suppliers. I find significant force in the appeal and the same is allowed.