2004 (96) ECC 561 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

East Regional Bench -- Kolkata

Shri V.K. Jain, Member (T) and Shri M.P. Bohra, Member (J)

Esskay Jay Ispat Ltd.

Versus

Commr. of Central Excise & Customs, Patna

Appeal No. EDM-257/2003

[Arising out of Order-in-Appeal No. 64/PAT/CEX/Appeal/2003 dated 18.3.2003 passed by Commr. of Customs & Central Excise (Appeals), Patna]

Order No. A-391/KOL/2004, dt. 18.6.2004, Certified on 29.6.2004

Cenvat Credit

Inputs lying in stock -- Assessee is entitled to take the Cenvat credit in respect of the inputs lying in the stock as on 1.4.2000 at the rate of 12% of the invoice price issued under Notification No. 29/2000 (CE) dated 31.3.2000.

[Para 3]

PRESENT :

Shri B.N. Chattopadhyay, Consultant for the appellants.

Shri T.K. Kar, SDR, Adv. for the respondent(s).

Case Cited :

J.M.S. Steel (P) Ltd. v. CCEx., Patna being Order No. A-191-192/KOL/2004 dated 18.3.2004 [Para 3]

Per : M.P. Bohra

This appeal has been filed against the order-in-appeal passed by the Commissioner (Appeals) of Central Excise, Patna on 18.3.2003.

2. Brief facts of the case are that the appellants are engaged in the manufacture of M.S. Twisted Bars. They were covered under the provisions of Section 3A of the Central Excise Act, 1944 during the period from September 1997 to March 2000. After the withdrawal of the compound levy scheme w.e.f. 1.4.98, the appellants had availed the modvat credit on inputs lying in their factory from which they would be manufacturing excisable goods and paying the duty under the provisions of Section 3 and availed modvat credit of Rs. 17,01,482.19 on 1260.348 M.T. and also taken credit of Rs. 4,976 on the furnace oil lying in their factory as on 31st March, 2000. The Assistant Commissioner of Central Excise, Head Qrs., Patna, disallowed the Cenvat credit amounting to Rs. 7,56,221 and confirmed the demand and interest at the rate of Rs. 24 under Section 11AA of CEA, 1944. On appeal, the Commissioner (Appeals) of Central Excise, Patna, rejected the appeal on 18.3.2003.

Hence the appeal has been preferred.

3. Heard both sides. The only question is whether the assessee is entitled to take the Cenvat credit in respect of the inputs lying in the stock as on 1.4.2000 at the rate of 12% of the invoice price issued under Notification 29/2000 (CE) dated 31.3.2000 as claimed by the appellants. The Ld. Counsel for the appellants submits that the issue is covered by the judgment rendered in M/s J.M.S. Steel (P) Ltd. v. CCEx., Patna being Order No. A-191-192/KOL/2004 dated 18.3.2004. He submits that the appeal may kindly be allowed and the benefit may be extended to the appellants.

4. Ld. SDR, Shri T.K. Kar, supports the order of the Commissioner.

5. We have perused the case records and the aforesaid decision rendered in M/s. J.M.G. Steel (P) Ltd. The ratio of M/s. J.M.G. Steel (P) Ltd. is fully applicable in the present case. For better appreciation, paras 4 & 5 of the said judgement are reproduced below:

"4. The view of the above, it is clear that the assessee is entitled to take the Cenvat credit in respect of the inputs lying in stocks as on 1.4.2000. Notification 29/2000 allows such credit at the rate of 12% of the price as declared by the manufacturer in the invoice accompanying the said invoice and the credit of the deemed duty so determined shall be allowed to the manufacturer of the final product. Para 5 of the said Notification makes it clear that the provisions of the Notification shall not apply to the cases where the manufacturer of the said inputs has not declared the invoice price of such inputs correctly in the documents. As such, the presence of the invoice is necessary in terms of the said Notification. If the intention was to give the credit of duty as reflected in the said invoice, then there was no need to lay down the deemed credit rate of 12% of the price, as declared in the invoice. If the Revenue's contention is accepted, then the said deemed provision would become redundant as invoice showing the actual duty paid is required to be presented in each and every case in terms of the Notification itself. Para 2 also talks about the credit of the deemed duty so determined. This shows that the credit which would be available to the assessee under the said Notification would be at the rate of 12% of the price and not the actual duty paid on the inputs.

5. Now the question is as to whether the said Notification which is effective from 1.4.2000, would be available to the appellant or not. Admittedly, the appellant has become entitled to the credit as on 1.4.2000, in terms of the Board's Circular also. As such, the law which is applicable on the said date, would govern the calculation of the credit as admissible to the appellants. As I have already held that it is the deemed credit at the rate of 12% of the price declared in the invoice, in my view, the appellant is entitled to take the said credit."

6. In view of the above, we set aside the impugned order and allow the appeal with consequential relief to the appellants.

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