CX – Provisions of erstwhile Rule 57CC are not same as Rule 6(6) of CCR as former dealt with 'products' while latter deals with excisable 'goods': CESTAT
By TIOL News Service
MUMBAI, NOV 20, 2017: THE appellants are in appeal against demand of reversal of CENVAT credit of certain 'products' cleared by them under Sr.No. 232 of notification 12/2012-CE dated 17.03.2012.
The impugned entry reads -
Table
|
Sl. No.
|
Chapter or heading or sub-heading or tariff item of the First Schedule
|
Description of excisable goods
|
Rate
|
Condition No.
|
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
| 232 |
84 or any other Chapter |
Goods specified in List 7 intended to be used for the installation of a cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat |
Nil |
2 and 3 |
| 2. |
Where such use is elsewhere than in the factory of production, the exemption shall be allowed if the procedure laid down in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001, is followed. |
| 3. |
The exemption shall be allowed if it has been proved to the satisfaction of an officer not below the rank of the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case be, having jurisdiction that such goods are cleared for the intended use specified in column (3) of the Table. |
It is the contention of the appellant that the impugned notification does not grant full exemption to goods but it is a conditional exemption and in these circumstances, the provisions of Rule 6(3) of the CCR are not attracted.
The appellant also argued that the extended period of limitation cannot be invoked as they have been regularly filing ER-1 returns which contain all the relevant facts and that there was no intention to evade duty.
The AR justified the impugned order by drawing attention to the opening paragraph of the said notification wherein it is clearly stated that the Central government hereby exempts the excisable goods of the description specified in the table attached. It is argued that in view of above there is no dispute that there is exemption for these goods, therefore, the provisions of Rule 6 of CCR can be invoked. He pointed that while the fact regarding the clearance under exemption was known to the revenue, the fact that common inputs are used was not known and hence the extended period of limitation is applicable.
The Bench adverted to rule 6(6) of CCR, 2004 and observed –
"…It is seen that the law permits appellants not to reverse credit in respect of which reversal is not required are clearly specified under sub-rule 6(6) of Cenvat Credit Rules. The nature of clearance made under notification 12/12-CE dated 17.03.2012 which are excluded from mischief of the said sub-rule are clearly specified in the said sub-rule itself. The clearance made by the appellants do not fall under this category. The appellants have claimed that the fact regarding the exempted clearance was known to the revenue as the date was part of the ER-1 file by the appellants. Though admittedly the ER-1 contained details of the value of the exempted goods cleared by the appellants still from that day it cannot be ascertained if the goods cleared under notification 12/12-CE by the appellants in the instant case were hit by mischief of Rule 6(6) of Cenvat Credit Rules, since the exclusion from the mischief of Rule 6(6) is very specific. The appellants cannot claim that the facts that the goods were not related power projects was known to the revenue or they had disclosed the relevant fact to the revenue. In these circumstances, extended period has rightly been invoked."
Drawing a distinction between the contents of the erst while rule 57CC of CER (which case laws were cited by the appellant), the CESTAT further observed –
"It is seen that the sub-rule 6(6) deals with the 'excisable goods'. A 'product' is different from 'goods'. A 'product' is categorical where as 'goods' are specified goods. While a 'product' can be a class, 'goods' are only specified goods. Thus while Rule 57CC was dealing with 'products' the Rule 6(6) deals with excisable 'goods'. Therefore for application of Rule 57CC the 'product' has to be exempted. For application of Rule 6(6) the 'goods' have to be exempted. In these circumstances, it is clear that the two rules are significantly different and therefore the provisions of Rule 57CC are not the same as Rule 6(6) of Cenvat Credit Rules."
The appeal was dismissed.
(See 2017-TIOL-4072-CESTAT-MUM)
