Case Law Details

Case Name : Racold Thermo Ltd. Vs Commissioner of Central Excise, Pune I (CESTAT Mumbai)
Appeal Number : Appeal No. E/1778 OF 2010
Date of Judgement/Order : 20/03/2012
Related Assessment Year :
Courts : All CESTAT (609) CESTAT Mumbai (127)

CESTAT, MUMBAI BENCH

Racold Thermo Ltd.

v.

Commissioner of Central Excise, Pune I

ORDER NOS. S/105/2012/SMB/C-IV/WZB &

A/41/2012/SMB/C-IV

APPLICATION NO. E/S/ 1920 OF 2010

APPEAL NO. E/1778 OF 2010

MARCH 20, 2012

ORDER

1. The appeal and the stay applications are directed against Order-in-Appeal No. P-I/RKS/123/2010 dated 5.08.2010 passed by the Commissioner of Central Excise (Appeals), Pune I.

2. The appellant herein, Racold Thermo Ltd., Chakan, received duty paid Hydrogen and Argon from Praxair India (P.) Ltd. They used these gases for the purpose of welding in their factory. Before welding the two gases have to be mixed together. For this purpose,. M/s. Praxair India has set up a facility/machinery in the premises of the appellant for enabling the mixing. The appellant has to pay M/s. Praxair India consideration/charges towards this facility. M/s. Praxair India also discharges excise duty liability on the facility charges paid by the appellant to them. The appellant took credit of the duty paid thereon on the facility charges under the CENVAT Credit Rules, 2004. The case of the department is that the appellant is not receiving any goods from M/s. Praxair India in respect of the facility provided to them. Therefore, there is no receipt of any inputs on the strength of which credit can be taken. Accordingly, a show-cause notice was issued to the appellant proposing to deny CENVAT credit of Rs.79,008/- under the provisions of Rule 14 of the Central Excise Rules. The case was adjudicated by order dated 27.1.2010 wherein the demand towards CENVAT credit wrongly availed was confirmed along with interest and equivalent penalty was imposed under Rule 15 read with Section 11AC. The appellant preferred an appeal against the said order before the lower appellate authority who dismissed the appeal. However, the appellate authority reduced the penalty to Rs. 10,000/-. Hence the appellants are before me.

3. Ld. Counsel for the appellant makes the following submissions. What they have taken credit is only the excise duty which they have paid and nothing else. In their own case this Tribunal in Racold Thermo Ltd. vide order no. A/599/10/SMB/CIV, dated 29.9.10 held that they are entitled for the credit of the duty paid by them on the facility charges for the previous period. This decision was based on another decision of the Tribunal in Pricol Ltd. v. CCE [2009] 246 ELT 257 (Trib.-Chennai) wherein also an identical set of facts were involved and it was held that the buyer is entitled to credit of entire amount of duty paid by it towards supplies of liquid nitrogen gas. Accordingly, the advocate pleads that stay be granted against the impugned order.

4. Ld. Superintendent, AR appearing for the revenue submits that in this case even though duty liability has been discharged, the appellant has not received any input. In the absence of receipt of any input, no CENVAT credit can be taken.

5. I have carefully considered the rival submissions. After hearing both the sides, I am of the view that the appeal itself can be disposed of at this stage as the issue lies in a narrow compass. Therefore after granting stay against recovery of dues adjudged, I take up the appeal for consideration.

6. There is no dispute about the fact that the appellant has taken CENVAT credit of the duty paid by them. Whether the duty is paid rightly or wrongly, is not the concern of the appellant who is only a recipient of the goods/service. So long as duty is paid either on the goods or the service, appellant is rightly entitled for the credit. This Tribunal in their own case for the previous period has allowed such credit. There is nothing on record to show that the department has appealed against that order of the Tribunal. In view of the position, I allow the appeal with consequential relief, if any.

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