Custom, Excise & Service Tax TribunalM/S. Bhel vs Commissioner Of Central Excise, Trichy on 1 July, 2009IN THE CUSTOMS, EXCISE & SERVICE TAX
		APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI

Appeal No. E/289/2007

(Arising out of Order-in-Original No. 2/2007 dated 1.2.2007 passed by the Commissioner of Central Excise, Trichy)

For approval and signature:

Honble Smt. Jyoti Balasundaram, Vice President
Honble Dr. C. Satapathy, Technical Member 

1. Whether Press Reporters may be allowed to see the Order for Publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether the Members wish to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental authorities?

M/s. BHEL 		 					Appellants

     
     Vs.


Commissioner of Central Excise, Trichy	        RespondentAppearance

Shri Muthuvenkataraman, Advocate and
Shri M.N. Bharathi, Advocate, for the Appellants

Shri V.V. Hariharan, Jt. CDR for the Respondent 

CORAM

Honble Smt. Jyoti Balasundaram, Vice-President
Honble Dr. C. Satapathy, Technical Member 

      Date of Hearing:  01.07.2009
      Date of Decision: 01.07.2009

Final Order No.  ____________

Per Jyoti Balasundaram  

	The brief facts of the case are that during the period in dispute the appellants had cleared boilers without payment of duty to BARC, Vishakapatnam and Bombay. Initially they had also availed CENVAT credit on some input services which were used in or in relation to the manufacture of the above product. No separate accounts had been maintained for input services. Revenue has invoked Rule 6(3)(b) of the CENVAT Credit Rules 2004 to demand 10% of the net sale price of the exempted goods and also levied interest but not imposed any penalty. Hence this appeal by the assessee.2.	We have heard both sides. The Commissioner has noted in the impugned order that the assessee had reversed only portion of the credit taken. The assessees submit before us that they had since reversed the entire credit amount to which they were not eligible. They submit that in the light of the Tribunals decision in Mount Mettur Pharmaceuticals vide Final Order No.879/2008 dated 8.8.2008 and the decision of the Honble Gujarat High Court in the case ofCCE Vs. Maize Products 2009 (234) ELT 431 (Guj.), reversal of credit subsequent to the clearance of goods is as good as not taking any credit. The Tribunal had set aside the demand for 10% of the exempted goods on the ground that the assessees had reversed the credit. In the light of the above decisions, we hold that demand for 10% of the net sale price of the exempted goods is not sustainable subject to verification of the claim of the appellants that they had reversed the entire credit which is not legally available to them. The case is remanded to the adjudicating authority for the above purpose of verification. He is also required to verify the claim of the assessees that they are not liable to interest for the reason that at any given point of time they had sufficient credit balance in their account (RG 23A).3.	Fresh orders have to be passed upon verification, after extending a reasonable opportunity to the assessees of appearing and explaining their case.4.	The appeal is thus allowed by way of remand.(Dictated and pronounced in open court)





(DR. C. SATAPATHY)	       		        (JYOTI BALASUNDARAM)
  Technical Member 		                          Vice President

Rex 
??

??

??

??2