Madras High Court
The Commissioner Of Central ... vs Tuticorin Alkali Chemicals And ... on 9 November, 2022
CMA(MD)No.1328 of 2015
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 09.11.2022
CORAM
THE HON'BLE MR JUSTICE M.S.RAMESH
AND
THE HON'BLE MR JUSTICE N. ANAND VENKATESH
C.M.A.(MD)No.1328 of 2015
The Commissioner of Central Excise
Central Revenue Building,
Tractor Road, NGO 'A' Colony,
Tirunelveli627 007. ... Appellant/Appellant
Vs.
Tuticorin Alkali Chemicals and Fertilizers Ltd.,
Harbour Construction Road,
Tuticorin-628 005 ...Respondent/Respondent
PRAYER: Civil Miscellaneous Appeal filed under Section 35G of the
Central Excise Act, 1944, to set aside the final order No.40343/2014 dated
05.06.2014 passed by the CESTAT South Zonal Bench, Chennai in Appeal
No.E/420/2008-DB arising out of order-in-order No.02/COMMR/CE/2008
dated 26.06.2008 passed by the Commissioner of Central Excise,
Tirunelveli.
Page 1 of 9
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CMA(MD)No.1328 of 2015
For Appellant : M/s.N.Dilipkumar, assisted by
Mr.K.Prabhu
For Respondent : M/s.S.Vishnupriya, assisted by
Mr.M.Inbarajan
JUDGMENT
(Judgment of the Court was delivered by N. ANAND VENKATESH,J.)
M.S.RAMESH,J.
and
N. ANAND VENKATESH,J.
The Revenue has filed this appeal questioning the order passed by the
Customs, Excise and Service Tax Appellate Tribunal, dated 05.06.2014.
2.A show cause notice was issued to the respondent on 27.12.2007
proposing to demand an amount of Rs.1,09,00,260/-(One Crore Nine Lakhs
Two Hundred and Sixty only) being the amount equivalent to 10% of the
value of the exempted goods under Rule 6(3) of the Cenvat Credit Rules,
2004. Through the impugned order dated 26.06.2008, the adjudicating
authority dropped the proceedings. Aggrieved by the same, the revenue filed
an appeal before the Tribunal.
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CMA(MD)No.1328 of 2015
3.The Tribunal, after taking into consideration the scope of Section
73(2) of the Finance Act, 2010, came to a conclusion that since the assessee
has exercised the option of paying the amount of input credit along with
interest and thereby had reversed the credit with interest, even before the
show cause was issued, there was no ground to impose the demand against
the assessee. Aggrieved by this order, the present appeal has been filed
before this Court.
4.When the appeal was admitted by this Court, the following
substantial question of law was framed:
“Whether an assessee can avail the benefit under
Section 73 of the Finance Act 2010 without paying 24%
interest per annum from the due date as contemplated under
Section 73(2) of the Finance Act, 2010 and as mentioned in the
proviso to Rule 6(7) of the CENVAT Credit Rules 2004?”
5.Heard Mr.N.Dilipkumar, learned counsel appearing for the
appellant and M/s.S.Vishnupriya, learned counsel appearing for the
respondent.
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CMA(MD)No.1328 of 2015
6.The learned Standing Counsel appearing on behalf of the appellant
brought to the notice of this Court the amendment that was made to the
Finance Act 2010 in and by which, the amount of interest that has to be paid
by the manufacturer was fixed at 24% from the due date till the date of
payment and what was paid as interest by the appellant was only 13% and
therefore, the learned Standing Counsel contended that the
respondent/assessee is not entitled to avail of the option that has been
provided under Section 73(2) of the Finance Act, 2010.
7.Per contra, the learned counsel for the respondent submitted that the
issue involved in the present appeal is no longer res integra and in order to
substantiate his submission, the learned counsel brought to our notice
judgments of this Court in the case of Commissioner of Central Excise,
Chennai-II-vs-ICMC Corporation Ltd., reported in 2015(315)E.L.T.
388(Mad.) and in C.C.E., Chennai-II-vs-Mount Mettur Pharmaceuticals
Limited, reported in 2017(356)E.L.T.184(Mad.).
8.The learned counsel for the respondent by placing reliance upon the
above judgments submitted that once the assessee had reversed the credit
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CMA(MD)No.1328 of 2015
along with interest even prior to the issuance of show cause notice and this
was made even prior to the amendment made to the Finance Act, 2010, there
is no scope for applying the interest that is fixed through the amendment
and hence, there is no absolutely ground to interfere with the order passed
by the Tribunal.
9.We have carefully considered the submissions made on either side
and perused the materials available on record.
10.There is no dispute with regard to the fact that the respondent had
reversed the credit with interest by availing of the option provided under
Section 73(2) of the Finance Act, 2010, on 01.08.2007, even before the
issuance of show cause notice. The only issue to be considered is as to
whether the subsequent amendment that was brought into force in the year
2010 and was given retrospective effect, can be put against the assessee.
The judgment cited by the learned counsel for the respondent squarely
covers this issue.
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CMA(MD)No.1328 of 2015
11. For better appreciation, the relevant portions of the judgments
referred to supra are extracted hereunder:
(a)In Commissioner of Central Excise, Chennai-II-vs-ICMC
Corporation Ltd., reported in 2015(315)E.L.T.388(Mad.), it is held as
follows:
“As per Section 73 sub-section (2) of the Finance Act,
2010 the assessee has to make as application to the
Commissioner of Central Excise along with documentary
evidence and a Certificate from the Chartered Accountant or a
Cost Accountant, certifying the amount of input credit
attributable to the inputs used in or on relation to the
manufacture of exempted goods within a period of six months
from the date on which the Finance Bill, 2010 received the
assent of the President.
5.Considering the fact that the assessee had reversed the
credit even prior to the amendment and the order of the
Tribunal is in fact no different from what is contemplated under
the Finance Act, 2010, we do not find anything survives further
for this Court to consider the merits of the case pleaded by the
Revenue.”
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CMA(MD)No.1328 of 2015
(b)In C.C.E., Chennai-II-vs-Mount Mettur Pharmaceuticals
Limited, reported in 2017(356)E.L.T.184(Mad.), it is held as follows:
“12.2 While confirming the order of the CESTAT,
Madras, setting aside demand of duty, the Hon'ble Division
Bench in CCE, Puducherry's case followed an earlier
decision of this Court in Commissioner of Central Excise v.
ICMC Corporation Ltd., reported in 2015(315) E.L.T.
388(Mad.), wherein, after considering the above
amendments, this Court held that, as per Section 73 sub-
section(2) of the Finance Act, 2010, the assessee has to make
an application to the Commissioner of Central Excise along
with documentary evidence and a certicate from the
Chartered Accountant or a Cost Accountant, certifying the
amount of input credit attributable to the inputs used in or in
relation to the manufacture of exempted goods within a
period of six months from the date on which the Finance Bill,
2010 received the assent of the President Considering the
fact that assessee had reversed the credit even prior to the
amendment and the order of the Tribunal was in fact no
different from what is contemplated under the Finance Act,
2010, this Court held against the Revenue.”
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CMA(MD)No.1328 of 2015
12.In the light of the above judgments, we are of the view that there is
no manifest error in the final order passed by the Tribunal and the
substantial question of law raised in this appeal is answered accordingly.
13.This Civil Miscellaneous Appeal accordingly stands dismissed. No
costs.
(M.S.R.,J.) (N.A.V.,J.)
09.11.2022
Index : Yes/No
Internet : Yes
Ns
To:
1.The Commissioner of Central Excise
Central Revenue Building,
Tractor Road, NGO 'A' Colony,
Tirunelveli627 007.
2.The Section Officer,
VR Section,
Madurai Bench of Madras
High Court,
Madurai.
https://www.mhc.tn.gov.in/judis
CMA(MD)No.1328 of 2015
M.S.RAMESH,J.
and
N. ANAND VENKATESH,J.
Ns
C.M.A.(MD)No.1328 of 2015
09.11.2022
https://www.mhc.tn.gov.in/judis
