2013 (11) TMI 740 - AT - Central Excise

Tribunal grants appeal over procedural flaws, allows multiple declarations under Notification No. 35/2003-CE (NT)

M/s. Ambica Fashion Versus Commissioner of Central Excise Ahmedabad

The Tribunal allowed the appeal filed by the appellant due to procedural flaws in the Commissioner (Appeals)'s actions. It affirmed the permissibility of ... Jurisdiction to enhance the dues – Neither the extended period nor penalty invoked u/s 11AC of the central excise Act - Whether Commissioner (Appeals) has the jurisdiction to enhance the dues confirmed and penalty imposed by the first adjudicating authority – Transitional provisions for Textile and Textile Articles. - Held that:- In the original show cause notice dated 28.6.2004 was issued for an amount and extended period was not invoked - In the show cause notice dated 16.11.2006 issued by Commissioner (Appeals) demand has been proposed to be enhanced but extended period of five years has not been invoked by Commissioner (Appeals) nor penalty under Section 11AC of the Central Excise Act has been invoked – Relying upon Collector of Central Excise, Pune vs. Maharashtra Scooters Limited [1996 (10) TMI 93 - SUPREME COURT OF INDIA ] - The show cause notice issued by Commissioner (Appeals) cannot be sustained as neither proviso to Section 11A regarding extended period has been invoked nor provisons of Section 11AC of the Central Excise Act, 1944 have been pressed into operation - The corrective action attempted by Commissioner (Appeals) in appeal cannot rectify the defect of the show cause notice. Filing of multiple declarations allowed or not - Whether appellant is entitled to file more than one declaration under Notification No. 35/2003 – Held that:- Once the time limit for filing declarations was extended from time to time up to 15.6.2003, then it has to be understood that any declaration filed up to that date is a valid declaration – Relying upon L.B. Textiles vs. CCE Ahmedabad-I [2008 (2) TMI 769 - CESTAT, AHMEDABAD ] - there is no requirement under the provisions of Rule 9A of the Cenvat Credit Rules, 2003, as amended from time to time, for filing only one declaration. Entitlement for credit on grey textile fabric under Notification No. 35/2003 – Held that:- From the provisions of Rule 9A (1) it is clear that a first stage dealer or a second stage dealer is entitled to the service tax credit equal to the duty credit on inputs contained in the finished goods - the word finished goods used in the Rule for dealers will only mean ‘Yarn’ and or Unprocessed fabrics - For unprocessed fabric the input on which credit is admissible will be only the yarn contained in the finished goods (unprocessed fabric) - Yarn as credit admissible input with a dealer could be in the form of yarn as such lying with a dealer or contained in the finished unprocessed fabric – Decided in favour of Assessee. Issues Involved:1. Jurisdiction of Commissioner (Appeals) to enhance dues and penalties.2. Entitlement of appellant to file multiple declarations under Notification No. 35/2003-CE (NT).3. Appellant's entitlement to deemed cenvat credit under Notification No. 35/2003-CE (NT).Jurisdiction of Commissioner (Appeals) to Enhance Dues and Penalties:The appellant contested the Order-in-Appeal disallowing transitional credit and imposing a penalty. The argument focused on the Commissioner (Appeals) allegedly exceeding jurisdiction by proposing higher penalties and disallowing additional credit without proper notice. The Tribunal analyzed Section 35 of the Central Excise Act, 1944, emphasizing the need for the appellant to be informed and given an opportunity to respond to proposed enhancements. The Tribunal referenced the Collector of Central Excise, Pune vs. Maharashtra Scooters Limited case, highlighting the necessity of invoking specific provisions for extended periods and penalties. Ultimately, the Tribunal ruled that the show cause notice issued by the Commissioner (Appeals) lacked validity due to procedural shortcomings.Entitlement to File Multiple Declarations:The issue of whether the appellant could submit more than one declaration under Notification No. 35/2003-CE (NT) was examined. The Tribunal referred to relevant notifications extending the deadline for declarations. Relying on precedent, the Tribunal determined that multiple valid declarations could be filed within the extended deadline. The decision was supported by the Ahmedabad CESTAT Bench's ruling in L.B. Textiles vs. CCE Ahmedabad-I, establishing the permissibility of multiple declarations under the evolving provisions.Appellant's Entitlement to Deemed Cenvat Credit:Regarding the appellant's entitlement to deemed cenvat credit under Notification No. 35/2003-CE (NT), the Tribunal scrutinized the specific provisions of the notification. By analyzing the table annexed to the notification and Rule 9A of the Cenvat Credit Rules, 2003, the Tribunal clarified the criteria for claiming credit on grey textile fabric. The Tribunal emphasized that the appellant's case fell under Sr. No. 1(c) of the table, allowing credit for yarn contained in unprocessed fabrics. The ruling favored the appellant's interpretation, granting them the credit on grey textile fabric as per the relevant provisions.In conclusion, the Tribunal allowed the appeal filed by the appellant, citing the procedural flaws in the Commissioner (Appeals)'s actions, affirming the permissibility of multiple declarations, and confirming the appellant's entitlement to deemed cenvat credit on grey textile fabric under the specified provisions.