A One Laminators Pvt. Ltd. vs Commissioner Of Central Excise
2011 Latest Caselaw 3105 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        CEAC 15 OF 2011
                         CEAC 16 OF 2011

%                            Decision Delivered On: July 4,2011

CEAC 15 OF 2011

A ONE LAMINATORS PVT. LTD.                . . . APPELLANT
                 Through : Dr. Seema Jain, Advocate with Mr.
                           Ajay K. Jain and Mr. Dushyant K.
                           Mahant, Advocates.

                            VERSUS

COMMISSIONER OF CENTRAL EXCISE         . . .RESPONDENT
                 Through: Mr. Ashwani Bhardwaj, Advocate


CEAC 16 OF 2011

DELHI LAMINATORS PVT. LTD.              . . . APPELLANT
                 Through : Dr. Seema Jain, Advocate with Mr.
                           Ajay K. Jain and Mr. Dushyant K.
                           Mahant, Advocates.

                            VERSUS

COMMISSIONER OF CENTRAL EXCISE          . . .RESPONDENT
                 Through: Mr. Ashwani Bhardwaj, Advocate


CORAM :-

       HON'BLE MR. JUSTICE A.K. SIKRI
       HON'BLE MR. JUSTICE M.L. MEHTA

       1.     Whether Reporters of Local newspapers may be
              allowed to see the Judgment?
       2.     To be referred to the Reporter or not?
       3.     Whether the Judgment should be reported in the
              Digest?




CEAC 15/11 & 16/2011                                   Page 1 of 5
 A.K. SIKRI, J. (ORAL)

CM APPL. 11817/2011 in CEAC 15/2011 CM APPL. 11856/2011 in CEAC 16/2011

Exemption allowed subject to just exception.

These applications stand disposed of.

CM APPL. 11816/2011 in CEAC 15/2011 CM APPL. 11855/2011 in CEAC 16/2011

1. Notice, Mr. Bhardwaj accepts notice on behalf of the

respondent.

2. Since both the parties are ready to argue the matter finally,

we have heard the arguments and proceed to dictate the order.

3. These two appeals are filed against the common order dated

18th March, 2011 passed by the learned Customs, Excise and

Service Tax Appellate Tribunal (hereinafter referred to as 'the

CESTAT') on the stay applications filed by the appellants in the

appeals which are still pending before the CESTAT. Vide impugned

order, the appellants are directed to deposit 60% of the amount

demanded within a period of eight week while waiving the amount

of interest and penalty demanded by the adjudicating authority.

It is not necessary to state the facts of the matter in detail since

the appeals of the appellants are still pending before the CESTAT.

As we are concerned with the validity of the aforesaid interim

directions, we take note of the facts which are relevant for the

purpose of determining this aspect. It is an admitted case that

both the appellants are engaged in printing and lamination of

polyester film with metalized film/polyester film. These metalized

films are polyester which are further converted in pouches and

bags. The appellants have been treating the aforesaid activity as

manufacturing activity and they have been paying the excise duty

thereupon. At the same time, the appellants also took Cenvat

credit of duty paid on inputs. However, show cause notices were

issued to the appellants asking the appellants to reverse the

Cenvat credit amounting to ` 25,59,857/- and ` 14,11,216

respectively. Notices were also issued on the premise that the

process of lamination/metalisation of polyester films undertaken

by the appellants does not amount to manufacture and, therefore,

the appellants were not entitled to take credit of duty paid on

inputs. The appellants protested the aforesaid show cause notices

submitting that they had paid the excise duty on the furnished

goods and, therefore, the respondent were not justified in

reversing the Cenvat credit availed by the appellants. The

appellants also relied upon the judgment of the Apex Court in the

case of CCE, Ahmadabad Vs. Narayn Polyplast, 2005(179)

E.L.T.20 (SC). The adjudicating authority, however, did not agree

with the aforesaid submission of the appellants and confirmed the

demand made in the show cause notices with interest and also

imposed equal amount in the nature of penalty on the appellants.

4. The appellants preferred appeals against the orders of the

adjudicating authority before the Commission (Appeals) which

were also dismissed. Against the orders of the Commissioner

(Appeals), the appellants have now preferred further appeals

before the CESTAT which, as mentioned above, are still pending

before the CESTAT. In these appeals, the appellants moved stay

application seeking waiver of pre-deposit in which the impugned

orders have been passed.

5. The neat submission made by the learned counsel for the

appellant is that if the aforesaid process is not to be treated as

manufacturing process and the appellants are not entitled to

Cenvat credit on that basis, then the appellants were also not

required to pay any excise duty. It is also pointed out that the

excise duty paid by the appellants is much more than the Cenvat

credit availed by the appellant. It is also pointed out that Cenvat

credit was not claimed or paid to the appellant in cash but was

utilized in payment of excise duty only. There is adequate force in

this submission of the appellants and we are of the view that the

CESTAT while passing the impugned order could not have glossed

over these glaring facts which would clearly disclosed a prima

facie case like this and the appellant should not be fastened with

any liability of making pre-deposit, as directed.

6. In the aforesaid circumstances, are of the view that the

appeals of the appellants should be heard without any condition of

pre-deposit. These appeals are accordingly allowed and the

impugned directions of the Tribunal are set aside.

(A.K. SIKRI) JUDGE

(M.L. MEHTA) JUDGE JULY 4, 2011 skb