w w w . L a w y e r S e r v i c e s . i n

M/s. Filter Manufacturing Industries Pvt. Ltd. v/s Commissioner of Central Excise, Kolkata-III

Company & Directors' Information:- R K MANUFACTURING CO LTD [Active] CIN = L27209WB1984PLC037758

Company & Directors' Information:- R K MANUFACTURING CO LTD [Active] CIN = L27209GJ1984PLC098951

Company & Directors' Information:- INDIA MANUFACTURING CORPORATION PRIVATE LIMITED [Active] CIN = U24100DL2010PTC198947

Company & Directors' Information:- FILTER MANUFACTURING INDUSTRIES PVT LTD [Active] CIN = U74999WB1990PTC049125

Company & Directors' Information:- S I A MANUFACTURING PRIVATE LIMITED [Active] CIN = U74120UP2013PTC057004

Company & Directors' Information:- S K M MANUFACTURING PRIVATE LIMITED [Active] CIN = U17200DL2011PTC223768

Company & Directors' Information:- S T S MANUFACTURING PRIVATE LIMITED [Active] CIN = U28112TZ2006PTC012940

Company & Directors' Information:- A S P MANUFACTURING COMPANY PVT LTD [Active] CIN = U27109WB1991PTC051461

Company & Directors' Information:- A K MANUFACTURING PVT LTD [Active] CIN = U51909MN1988PTC003110

Company & Directors' Information:- I T A C (INDIA) MANUFACTURING CO LTD [Dissolved] CIN = L51109WB1982PLC034689

Company & Directors' Information:- J D MANUFACTURING CO PVT LTD [Active] CIN = U51909WB1996PTC079825

Company & Directors' Information:- A S P MANUFACTURING COMPANY PVT LTD [Not available for efiling] CIN = U36900WB1991PTC005146

Company & Directors' Information:- FILTER-ON (INDIA) PRIVATE LIMITED [Active] CIN = U29197MH1989PTC051379

Company & Directors' Information:- B R D MANUFACTURING PRIVATE LIMITED [Active] CIN = U51109WB1997PTC085188

Company & Directors' Information:- R J S MANUFACTURING PRIVATE LIMITED [Active] CIN = U27104DL1997PTC090521

Company & Directors' Information:- B U MANUFACTURING PVT LTD [Active] CIN = U51109WB1982PTC035271

Company & Directors' Information:- M M MANUFACTURING PVT LTD [Active] CIN = U26922WB1993PTC059837

Company & Directors' Information:- J. C. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U21099WB2020PTC236821

Company & Directors' Information:- S B MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U31506WB1999PTC088567

Company & Directors' Information:- K. V. J. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U29308DL2017PTC320213

Company & Directors' Information:- A T E MANUFACTURING CO PRIVATE LIMITED [Amalgamated] CIN = U28999GJ1973PTC002296

Company & Directors' Information:- J P MANUFACTURING AND CO PVT LTD [Strike Off] CIN = U51226WB1982PTC034927

Company & Directors' Information:- D. K. MANUFACTURING (INDIA) LIMITED [Strike Off] CIN = U37200WB2011PLC170403

Company & Directors' Information:- S M MANUFACTURING COMPANY PRIVATE LIMITED [Active] CIN = U34300HR1997PTC057824

Company & Directors' Information:- G K MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U34300PB2012PTC036073

Company & Directors' Information:- P & B MANUFACTURING PRIVATE LIMITED [Active] CIN = U29254TN2010PTC076696

Company & Directors' Information:- B. V. H. MANUFACTURING INDIA PRIVATE LIMITED [Active] CIN = U74999GJ2018FTC100633

Company & Directors' Information:- R A MANUFACTURING COMPANY PRIVATE LIMITED [Strike Off] CIN = U36900HR2012PTC047669

Company & Directors' Information:- A K R MANUFACTURING PRIVATE LIMITED [Active] CIN = U19200RJ2012PTC041177

Company & Directors' Information:- C N C MANUFACTURING PRIVATE LIMITED [Strike Off] CIN = U64204DL2015PTC281449

    Appeal No. Ex.Ap. 627 of 2011 (Arising out of Order in Appeal No. 173/Kol-III of 2011] & Order No. FO/A/75015 of 2015

    Decided On, 14 January 2015

    At, Customs Excise Service Tax Appellate Tribunal East Regional Bench Kolkata


    For the Appellant: Tapan Hazra, Commercial Manager. For the Respondent: S.P. Pal, Appraiser (A.R.).

Judgment Text

Dr. D.M. Misra, Member(J).

1. This is an Appeal filed against Order-in-Original No.24/BST/AC/Adjn/2008-09 dated 31.12.2008.

2. Briefly stated the facts of the case are that the Appellant are having two units situated at Dasadron R-Gopalpur, North-24 Parganas (Unit No.1) and at F-3, Block-GP, Sector-V, Salt Lake City, Kolkata-700091 (Unit No.2). The Appellant are engaged in the manufacture of different types of industrial filters falling under tariff item No.8421 3920 of CETA, 1985. In the process of manufacture of finished goods, the Appellant have utilized various inputs and availed CENVAT Credit on those inputs and while discharging duty on final product utilized such credit. It is alleged that during the period December, 2006 to May, 2007, the Appellant had availed CENVAT Credit on certain inputs at their unit-1, but removed the same as such without reversal of the CENVAT Credit to their Unit No.2 where such inputs were used in the manufacture of final product at Unit No.2 and cleared on payment of duty. Show cause cum demand notice was issued alleging violation of various provisions of CENVAT Credit Rules, 2004 by Unit No.1 and accordingly CENVAT Credit availed on the inputs cleared as such without reversal of credit was proposed to be recovered. On adjudication, the adjudicating authority confirmed the demand and imposed penalty. On Appeal, the Commissioner(Appeals) rejected the Appeal filed by the assessee Appellant. Aggrieved by the said order, the present Appeal.

3. The learned authorized representative Shri Tapan Hazra, Commercial Manager for the Appellant submitted that even though these units were situated at a distance having separate Central Excise registration but it belong to the same management, therefore the situation is revenue neutral, hence there was no necessity for reversal of credit by Unit No.1, while clearing the inputs, as such, to Unit No.2. He has referred to the decision of this Tribunal in the case of Kesarwani Zarda Bhandar vs. CCE, Allahabad - 2007 (219) ELT 606 (Tri.Del.).

4. Per contra, Shri S.P.Pal, Ld.A.R. for the Revenue submitted that in view of the specific provisions contained in Rule 3(5) of CENVAT Credit Rules, 2004, the Appellant are required to reverse the credit availed on such inputs at the time of its removal and the removal shall be made under cover of a invoice under Rule 9 of Central Excise Rules, 2002. He submits that the Ld. Commissioner (Appeals) has recorded a categorical finding about non-applicability of the concept of revenue’s neutrality to the present facts and also observed that the Appellant had failed to establish that the inputs cleared as such were ultimately used by them in their factory at Unit No.2. He submits that the Ld.Commissioner (Appeals) order be upheld.

5. Heard both sides and perused the record. I find that undisputedly the Applicant had cleared inputs as such from their Unit No.1 to Unit No.2 without following the procedure laid down under Rule 3(5) of CENVAT Credit Rules, 2004. Also, I find that while rejecting their Appeal Ld. Commissioner (Appeals) has discussed the issue in detail and recorded a categorical finding relating to the applicability of revenue neutrality to the present situation also made a categorical observation that the Appellant failed to establish that the inputs received at their Unit-2 and had been utilized in or in relation to the manufacture of the final product. He has observed as follows:-

'Following the principles laid down in this Larger Bench decision, I find that the hypothetical question of revenue neutrality is not applicable in this case since assumed credit on the transferred inputs was not available to the assessee/appellant himself. In my view, once the appellant/assessee availed cenvat credit, he is duty bound to pay an amount equal to the credit availed in respect of such inputs which are removed as such, as per provisions of rule 3(5) of the Cenvat Credit Rules, 2004. Moreover, I find that the appellant does not even place any evidence before me that the transferred inputs were ultimately used to manufacture dutiable goods and these dutiable goods were actually cleared on payment of duty from their other unit. Therefore, this hypothetical issue of revenue neutrality does not come to rescue the case of the appellant.'

6. I do not find any reason to interfere with the afor

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esaid finding of the Ld. Commissioner (Appeals). Further, I am of the opinion that the decision cited by the learned representative for the Appellant is not applicable to the facts of the present case, inasmuch as in that case the inputs which were cleared as inter-mediate product, received back in the factory and utilized in the manufacture of final product. In the result, the Ld.Commissioner (Appeals) order is upheld and the Appeal filed by the assessee is rejected. Appeal rejected.