CX - Manufacture of e-bikes on job-work basis - in another case Revenue denied credit lying in account when e-bikes were exempted - in that case Tribunal ordered pre-deposit and same was paid - since credit so denied is out of credit sought to be denied in present case, pre-deposit made is sufficient: CESTAT
By TIOL News Service
NEW DELHI, NOV 09, 2013 : M/s. Hero Exports imported e-bikes in CKD condition as also parts of e-bike. The same were cleared on payment of duty under the scheme DEEC, FMS and FPS as also OGL. The said imported goods were sent by them directly from the Customs to the factory of Hero Ecotech Ltd for conversion into e-bikes on job work basis. The completely manufactured e-bike was cleared by Hero Ecotech Ltd. on payment of duty.
The dispute in the present appeal relates to CENVAT credit of duty of customs paid by M/s. Hero Exports and availed by Hero Ecotech Ltd.
The adjudicating authority has disallowed the credit on the ground that same is availed on the basis of endorsement on the bill of entry of Hero Exports . Another ground taken by the adjudicating authority is that the duty stands paid under various schemes by debiting the scrips and as such, in terms of notification 53/03-Cus and 90/06-Cus, the credit can be availed by the importer and not by job worker. It is also held that name of M/s. Hero Ecotech Ltd was not shown as supporting manufacturer in the license issued by DGFT. The plea of limitation was also not accepted.
On the various grounds on which the adjudicating authority confirmed the demand, the Bench took the following view -
+ The technical/procedural objections raised by the Revenue as regards the endorsement on bills of entry by M/s. Hero Exports instead of issuing separate invoices does not advance Revenue's case. Endorsements made by M/s. Hero Exports on the reverse of bill of entry clearly give all the particulars as also the specifications etc. which are necessary for the purpose of availment of credit.
+ Even if the Revenues' stand as regards the violation of notification No.53/03-Cus and 90/06-Cus are accepted at this prima facie stage, we are of the view that availment of credit by Hero Ecotech Ltd. would be violation of those customs notifications and cannot have any reflection on availment of credit by the manufacturer who has admittedly paid the duty on the final product.
+ The period involved in the present appeal is from February 2007 to August 2009 whereas the show cause notice was issued on 12.8.10 in one of the cases. This covers the order confirming the demand of duty of Rs.4.89 crores. We find that e-bikes which are dutiable during the relevant period were specifically exempted vide notification No.25/08-CE with effect from 29.4.08. At that point of time, appellant was having credit in their credit account, for which the Revenue raised the SCN dated 8.5.09 seeking reversal of such credit. As such, it becomes clear that Revenue was aware of the availment of credit in respect of part of the e-bikes as early as 08.05.09 when it issued the SCN for reversal of credit on the final product becoming exempted. As such, it can be prima facie concluded that SCN issued on 12.8.10 invoking the longer period of limitation was barred by limitation.
+ SCN for reversal of credit on e-bike becoming exempted with effect from 29.4.08 was adjudicated by the Commissioner confirming the demand of duty of Rs.2.69 crores and in appeal, Tribunal vide its stay order dated 30.5.11 directed the appellant to deposit a part amount of Rs.one crore which stands deposited. Admittedly such reversal of credit in terms of Tribunals' stay order is out of credit so availed by the assessee which is now being sought to be denied.
Holding that the deposit of Rs. One croremade in the referred case can be deemed to be a deposit out of total CENVAT credit involved and denied in the present case, the Bench held that the appellant is entitled to unconditional stay in the matter.
(See 2013-TIOL-1668-CESTAT-DEL)
