TMI Blog2014 (12) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... s circular can have only prospective effect which is evidently the law of the land. Hence, Government finds that rejection of the rebate claims by the original authority on the sole ground of issue of ‘amounts to manufacture by applying the Boards circular-retrospectively-i.e. prior to 24.6.10 cannot be held sustainable and hence, liable to be set aside. - Decided in favour of assessee. - F. No. 195/786/13-RA - 355/14-cx - Dated:- 10-11-2014 - Smt. Archana Pandey Tiwari, Joint Secretary ORDER This revision application is filed by M/s. Uttam Galva Steels Ltd, Raigad against the Order-in-Appeal No. US/131/RGD/2013 dated 21-05-2013 passed by the Commissioner of Central Excise (Appeals), Raigad with respect to Order-in Original passed by the Deputy Commissioner of Central-Excise, Raigad. 2. Brief facts of the case are that the final products cleared on payment of duty from their factory, inter alia include the products namely H.R. Pickled oils , HR Pickled and oiled coils . The said final products were being cleared on payment of duty for home consumption as well as for export under Bond/Claim of rebate. The applicant had filed various rebate claims during the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.5 Accordingly, a Show Cause Notice dated 25.06.2010 was issued to the applicant thereby calling them upon. to show cause as to why the entire amount of rebate claim i.e. ₹ 3,18,72,034/- should not be rejected for the. reasons explained above. 2.6 On the aspect of admissibility of Cenvat credit availed on inputs viz FIR coils, Show Cause Notice F.No.V/Adj(SCN)15-55/Rgd/10-11 dated 25.6.2010 and F.No.V/Adj(SCN)15-19/Rgd/11-12 dated 6.5.2011 were issued by the Commissioner of Central Excise Raigad thereby denying the Cenvat Credit recovery under rule 14 of Cenvat Credit Rules, 2004 read with proviso to section 11 A(1) of the Central Excise Act, 1944. 2.7 The Commissioner Central Excise Raigad vide its Order No.12-13/ AT(12-13)COMMR/RGD/12-13 dt.31.08.2012 decided the above 2 SCN's. The main observations/points considered in above order are discussed briefly as under; (i) Show Cause Notice dt. 25.6.10 was issued for reversal of Cenvat Credit totally amounting to ₹ 33,72,64,502/- for the period from June 05 to March 10 and; Show Cause Notice dt. 06.05.2011 was issued for reversal of Cenvat Credit totally amounting to ₹ 5,53,46,071/- for the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Government under this Rule must be satisfied. The relevant notification in this regard is Notification No. 19/2004-CE (NT) dated 06.09.2004 and in the respectful submission of the applicant, all the conditions or limitations under the said notification have been satisfied. 4.3 It has been alleged neither by the department nor any of the two authorities below have in any manner stated that any of the conditions under the said Notification dated 06.09.2004 have not been met by the applicant. Thus., in as much as all the conditions under the relevant Notification issued by the Central Government have been-satisfied, the rebate claim of the applicant could not have been denied as so done in the impugned order. 4.4 It is further submitted that when there is no condition in the said Notification that the rebate claim cannot be adjudicated/allowed when the claim for refund is pending, the Commissioner (Appeals) erred in law in dismissing the appeal of the applicant on this ground. The applicant places reliance inter alia upon the following decisions which are to the ' effect that conditions which are not found in the Notification themselves cannot be imposed by the Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accepted by the Department. Both the Deputy Commissioner as also the Commissioner (Appeals) erred in failing to appreciate this aspect while passing the impugned Order-in-Original and the impugned Order-in-Appeal respectively and therefore these impugned orders are liable to be set aside for this reason as well. 4.8 The applicant submits that pickling and oiling is a manufacturing process for de-scaling of oxide films by a combination of mechanical and chemical processes and to retard corrosion during storage after de-scaling. Scales are complex iron-oxides formed on the steel structure during hot rolling operations which are difficult to remove by any normal process. This layer of brittle and hard ferric oxide on the surface of Hot Rolled Coils-(H.R. Coils) affects the surface quality of the coil during Cold rolling or any other process carried on H.R. Coils. It is submitted that if these layers exist on the surface of the coil, it decreases the surface quality and the value of the coil and therefore it has to be removed by carrying the aforesaid process. 4.9 The process of pickling, as technically understood, evidently also establishes it as a process of manufacture, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. pickled Coils , .R. pickled and ailed Coils right since October, 1992 in respect of home clearances and since December 2003 in respect of export clearances. Further, the Department has also been accepting the duty on these products cleared by the applicant consistently since 1992 and 2003. There is no change in the factual position in this respect since then. Thus, it is not open for the department to allege ins 2010- that there was no manufacture carried out by the applicant especially when there was no change in the factual position. 4.14 The applicant places reliance upon the decision of the Hon'ble Supreme Court in Radhasoami Satsang vs. Commissioner of Income Tax (1992) 1 SCC 659, wherein it has been held that the principle of consistency precludes the Department to change its stand without any change in factual position. 4.15 The applicant further submits that the Circular No.927/17/2010-CX dated 24.06.2010 issued by the Board does not apply to the case of the Applicant as it has been issued after the relevant period (i.e. October to November 2009) of the instant refund claim. It is clarified in that Circular that mere undertaking the process of oiling and pic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion dated 2.9.2011 mainly reiterated contents of impugned order. During the course of personal hearing, the applicant also submitted order, in original No.12-13/AT (12-13)COMMR/RGD/12-13 dated 31.8.2012, passed by the Commissioner of Central Excise, Raigad, wherein demand of cenvat credit availed, :prior to, 24.6.10 was dropped and the demand of cenvat credit availed atter24.6.2010 was confirmed. 6. Government has carefully gone through the relevant case records and perused the impugned Order-in-Original and Order-in-Appeal. 7. Government observes that the applicant exported impugned goods on payment of duty and filed various rebate claims during the period December 2009 to April 2010 of duty paid at the time of export on such impugned goods. The original authority vide impugned order-in-original, rejected the rebate claims on the ground that process undertaken for manufacture of impugned exported goods does not amount to manufacture in view of CBEC Circular No.927/12/2010-Cx dated 24.6.10. Commissioner (Appeals) rejected the applicants appeal. Now, the applicant has filed this revision application on ground mentioned n Para (4) above. 8. The applicant contended that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38. .. 39. Having resolved the first aspect as mentioned at para 30 supra, let me consider the second aspect, on the backdrop of the decisions in M/s Ajinkiya Enterprises, Pune, both by the Hon ble CESTAT and Hon ble Bombay High Court, for detailed discussion. The issue dealt here is identical to that of Ajinkya Enterprises case as decided by the higher authorities, which have dismissed the appeals filed by the department. However, I observe from the case records and the notices that the issues dealt in Ajinkya Enterprises and that of the noticee are different in one of the crucial observations by both the higher authorities. It would be appropriate going Into the reasoning by the Hon'ble CESTAT and Hon'ble High Court to arrive at their conclusion, before discussing the referred 'rucial observation : The Hon'ble CESTAT at paid 11 and-I2-held thus: 11. The learned Advocate also relied on several case laws, wherein' it was held that when duty paid at the time of clearance equal to or higher than the credit availed the same is to be treated as reversal of credit. Therefore, no further reversal of credit is required as held by this Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ......................... 44. .......................... 45. .......................... 46. In view of the foregoing discussions and findings, the demand for reversal of CENVAT credit taken and availed by the noticee on the inputs used in the processing of pickling and oiling of H. R. coils from 24.06.2010, shall sustain as proposed in the notice dated 06.05.2011. I also conclude that such credit availed and utilized in the impugned process done on H. R. coils prior to 24.06.2010, shall, however, not sustain on the following grounds: i) Hon ble CESTAT and Hon ble Bombay High Court have held in Ajinkya Enterprises, Pune, that once the duty on final product has been accepted by the department, the CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. In view of these decisions of higher authorities, reversal of CENVAT credit is not sustainable in the instant case prior to issue of clarification on 24 06.2010 by the Board. The department has also continued letting the payment of duty on these goods in monthly ER-1 s and ARE-1 claims of rebate without objection and thus the proposal for reversal of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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