Kohinoor Biscuits Products vs Commissioner of Central Excise

Challenging the order dated 21-3-2013 passed by the Customs, Excise & Service Tax Appellate Tribunal in Excise Appeal No. E/Stay/55987/2013 in E/55733/2013 & E/Stay/55988/2013 in E/55734/2013, the present appeal has been filed u/s 35C of the Central Excise Act. In the memo of appeal, following substantial questions of law have been proposed :-

Whether CESTAT is justified in directing to deposit the 50% of Cenvat credit even after making an observation that "on the basis of the decisions referred to supra we find a prima facie case in favour of appellant''?

Whether Tribunal is justified in directing to deposit 50% of disputed credit thereby taking a contrary and inconsistent stand, in a case where, on the very same issue in other cases, the Tribunal has granted stay/allowed appeal?

Whether Cenvat credit taken by Appellants based on Input Service Distributor (ISD) invoices issued by M/s. Parle Products Pvt. Ltd. is deniable on the ground that Cenvat credit can be distributed under Rule 7 of CCR, 2004 only to own units of ISD, in a case where, the Appellants manufacture confectioneries on behalf of M/s. Parle under clause (ii) of Notfn. No. 36/2001-C.E.(N.T.), dated 26-6-2001 and input services were used for sales promotion of confectioneries so manufactured by the Appellants on behalf of M/s. Parle?

Whether Cenvat credit of service tax paid and freight paid by M/s. Parle on inward and outward transportation (from the Appellants factory to depots of M/s. Parle) is deniable on the ground that depots of M/s. Parte cannot be the ''place of removal'' and that freight charges were not borne by the appellants but M/s. Parle?

We admit the appeal on question no. 1 which covers all other questions.

Heard Sri M.H. Patil, along with Sri Ashok Kumar, learned counsel for die appellant and Sri Ramesh Chandra Shukla for die respondent department.

Since a very limited issue is involved in the appeal and the facts are not much in dispute, we propose to dispose of the appeal finally which will serve the interest of both the parties.

Learned counsel for the appellant submits that in view of the findings recorded by the Tribunal, in para 2 of its order, the tribunal was not justified in asking appellant to deposit 50% of the basic Cenvat credit. In reply, learned counsel for the respondents submits that the order passed by the Tribunal is perfectly justified and call for no interference u/s 35G of the Central Excise Act.

Heard the learned counsel for the parties and perused the record.

A bare perusal of the order of the Tribunal would show that the Tribunal has recorded a prima facie case in favour of the appellant in view of the decision referred in para 1 of its order. The learned counsel for the respondent could place any material before us to show that the appellant has no prima facie case. The learned counsel for the appellant submit that the controversy on merits stands concluded in favour of the appellant. However, it is not necessary for the court to go into this question as the matter is still sub-judice before the Tribunal. Taking into consideration that the Tribunal has recorded finding of prima facie case in favour of the appellant, we are of the opinion that the interest of the Revenue is protected, if the appellant is permitted to furnish bond to the extent of 50% of the basic Cenvat credit instead of asking the appellant to deposit said amount in cash. The order of the Tribunal, to this extent stands modified. The appeal is allowed and questions of law as proposed is decided accordingly.