Yamir Packaging Pvt. Limited VERSUS Commissioner of Central Excise & ST, Vadodara 

EXCISE Appeal No. 10274 of 2021-SM

[Arising out of Order-in-Original/Appeal No VAD-EXCUS-002-APP-212-2020-21 dated

25.02.2021 passed by Commissioner of Central Excise, Customs and Service Tax

VADODARA-II]

 

Yamir Packaging Pvt. Limited

VERSUS

Commissioner of Central Excise & ST, Vadodara 

APPEARANCE :

Shri S.J. Vyas, Advocate for the Appellant

Shri Rajesh K Agarwal, Superintendent (AR) for the Revenue.

CORAM: HON’BLE MR. RAJU, MEMBER (TECHNICAL)

DATE OF HEARING/ DECISION: 06.01.2023

FINAL ORDER NO. A/10025/2023

RAJU :

This appeal has been filed by M/s. Yamir Packaging Pvt. Limited

against the demand of reversal of Cenvat credit, interest and imposition of

penalty.

Learned Counsel pointed out that they had availed 100%Cenvat credit

on wooden dies, aluminum litho plates and rubber blanket under the

category of inputs. The Revenue is of the view that these are capital goods

and therefore only 50% credit should have been taken in first year. He

pointed out that these items are consumable in nature and have short life.

He further pointed out that in any case they were entitled to credit of 50% in

the first year and 50% in the next financial year even if the goods are

considered as capital goods. He argued that this issue has been considered

by the Tribunal in the case of Guardian Plasticote Limited vs.CCE, Daman –

2008 (12) TMI 534 – CESTAT Ahmedabad. Learned Counsel stated that they

are ready to pay interest for the period for which the Revenue has claimed

that excess credit has been availed. He argued that this is in line with the

decision of this Tribunal in the case of Guardian Plasticote Limited vs.CCE,

Daman (supra).

Learned Authorised Representative relies upon the impugned order.

I have considered the rival submissions. I find that the issue involved

in the case Guardian Plasticote Limited vs.CCE, Daman is similar to the issue

involved in the instant case that using engraved printed cylinder is an

inputs. The Tribunal in the said order observed as under:-

“3.

After considering rival submissions, I agree with the Id. Advocate for the

appellants that extended period could not have been invoked in this case in view of the

defacement of the invoices relating to the cylinders up to 30-3-2000 and also in view of

the fact that there can be difference of opinion as to whether cylinder is a consumable

or not. In view of the above, on the ground of limitation, the demand for the period

beyond one year from the date of show cause notice fails. I also agree with the Id.

Advocate’s argument that the lower authorities have not considered as to whether the

cylinder can be considered as an input. This aspect needs to be considered in detail.

Therefore the matter has to go back to the Original Adjudicating Authority to consider

whether cylinder can be considered as an input or it has to be treated as capital goods.

More over even if it is considered as capital goods; at best the demand can be only for

interest for the period during which excess 50% credit was availed and It cannot be for

the full amount of Cenvat credit that has been taken: “Even in respect of capital goods,

the credit is available to the extent of 100% but in two financial years. Therefore there is

a need to re-quantify the demand and it has to be limited only to the interest. For these

two purposes, the matter has to be remanded back to the Original Adjudicating

Authority with a direction that appellants shall be given an opportunity to present their

case before a final decision is taken if they desire to do so.”

It is noticed that in the instant case also, the nature of goods being

capital goods or inputs, can be a matter of opinion. Relying on the decision

of the Tribunal in the case of Guardian Plasticote Limited vs.CCE, Daman

(supra) and the fact that the learned Counsel has admitted that they are

ready to pay interest for the disputed period, the appeal is partly allowed.

The matter is remanded to the Adjudicating Authority to calculate the

amount of interest involved. In the facts of the case, the penalty is set

aside.

The appeal is allowed by way of remand to the Adjudicating Authority,

in the above terms.

(Order dictated and pronounced in the open court)

(Raju)

Member (Technical)