At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
By, THE HONOURABLE MRS. JUSTICE ARCHANA WADHWA
By, MEMBER (JUDICIAL) & THE HONOURABLE MR JUSTICE MATHEW JOHN
By, MEMBER (TECHNICAL)
For the Appellant: L.P. Asthana, Ms. Neha Advocates. For the Respondent: S.K. Panda, Jt. CDR.
Per Archana Wadhwa, J.
1. There is a delay of 24 days in filing the appeal. An application for condoning the delay is filed explaining that the person dealing with excise matters in the Company was sick and on leave and that is the reason for delay. Considering the explanation, the delay is condoned.
2. The prayer in the application is to dispense with the condition of pre-deposit of Rs. 26,36,609/- confirmed against the appellant by denying them the benefit of modvat credit availed by them in respect of paints and welding electrodes used for repair and maintenance of plant and machinery. We further note that the impugned order of Commissioner (Appeals) is on the appeal of the Revenue in as much as the order in original was in favour of the appellant. While hearing the appeal of the Revenue, Commissioner (Appeals) has observed that penalty is also imposable under Rule 15 of the Cenvat Credit Rules, 2004 for contravention of Rule 3 of Cenvat Credit Rules, 2004. However, he has not specified any quantum of penalty to be imposed upon the appellant.
3. After hearing both the sides, we find that the law in respect of paints being eligible inputs for the purpose of modvat credit stand held in favour of assessee by various decisions of the Tribunal. Reference in this regard is to CCE Vs Nagarjuna Agrichem 2003 (160) ELT 572 (Trib- Bang) as also to another decision in the case of CCE, Chennai Vs. Thirumalai Chemicals 2008 (227) ELT 592 (Trib-Chen).
4. As regards availability of credit on welding electrodes, we find that there are various decisions of different High Courts as also of the Hon’ble Supreme Court on the disputed issue. The various High Courts decisions are in favour of the appellant that welding electrodes used for repair and maintenance of plant and machinery are eligible inputs. Reference in this regard can be made to the following decisions:-
CCE Bangalore I Vs. Alfred Herbert (India) Ltd 2010 (257) ELT 29 (Kar)
CCE Coimbatore Vs. Madras Aluminium Co Ltd 2008 (226) ELT 342 (Mad)
Ambuja Cements Eastern Ltd Vs CCE 2010 (256) ELT 690 (Chatt.) Hindustan Zinc Ltd Vs Union of India 2008 (228) ELT 517 (Raj.)
5. As regards the Hon’ble Supreme Court on the said issue, we find that the Hon’ble Supreme Court in the case of Ramla Sahkari Chinni Mills Ltd 2010 (260) ELT 321 (SC) has referred the matter to the Larger Bench.
6. The learned Joint CDR has brought to our notice a latest decision of Hon’ble Supreme Court in the case of Grasim Industries Ltd Vs Union of India 2011 (273) ELT 10 SC. However, the learned Advocate appearing for the appellants submits that the reference made by another Division Bench of Hon’ble Supreme Court in the case of Ramla Sahkari Chinni Mills (supra) to the Larger Bench was not brought to the notice of Hon’ble Supreme Court in the case of Grasim Industries . In any case, he submits that there were different view of various High Courts holding field during the relevant period. The demand pertains to the period 2005-09 whereas the show cause notice was issued on 31st August, 2009 by invoking the larger period of limitation. He submits that the adjudicating authority had originally dropped the demand by taking into account the various decisions of the High Courts. He submits that no suppression or mis-statement with intent to evasion can be attributed to the appellants.
7. After appreciating the submissions made by both the sides, we find that the law on the point of availability of modvat credit in respect of electrodes used for repair and maintenance of plant and machinery was the subject matter of various judicious decisions. The same was not clear during the relevant period. The latest judgment of the Hon’ble Supreme Court in the case of Grasim Industries relied upon by the learned Jt CDR, is without taking the reference of the disputed issues to the Larger Bench, by another Division Bench of Hon’ble Supreme Court. Further the fact that the Assistant Commissioner has taken a view in favour of the appellant, is itself an indication that the law on the issue was not clear. In this scenario, we are of the view that no misstatement can be attributed to the appellant by invoking the period of limitation.
8. At this stage, we are informed that the demand within the limited period would be around Rs.7 lakhs. By taking into account the larger Bench decision of the Hon’ble Supreme Court as also by taking the latest decision of Hon&rsquo
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;ble Supreme Court in the case of Grasim Industries, we direct the appellant to deposit 50% of the duty amount within the period of limitation i.e. Rs. 3,50,000/- . The said deposits are required to be made within a period of six weeks from today. Subject to the deposit of the amount, pre-deposit of balance amount of duty and entire amount of penalty shall stand waived and its recovery stayed during pendency of the appeal. 9. Matter to come up for ascertaining compliance on 20.4.2012.