TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 453
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....ur, Thane of the third appellant is also manufacturing the same products as manufactured by SGS and SOG. All these three units are firms of the same group companies and have common Directors/ Partners and also have a common registered Head Office at Ghatkopar (East), Mumbai. All these companies got merged into Standard Grease and Specialities Pvt. Limited with effect from 01.4.2008. The basic raw materials used by all the above three appellants are same. The basic raw material for all products is 'Base Oil' which is blended with various additives by the above appellants to manufacture the finished excisable goods. Appellant Shri Vinod Vyas is the Managing Partner of SOG and partner of SGS whereas appellant Shri Bharat Shri S.J. Vyas, Advocate is partner of SGS. Appellant Shri Nainesh V. Bhagat is the partner of M/s. S.G. Transport, Mumbai on which a penalty of Rs. 2 Lakh has been imposed. 2. Appellants SGS, SOG and TGIPL exchanged raw materials on which cenvat credit is taken on loan basis amongst themselves from time to time in order to meet their urgent need of raw materials without reversing proportionate cenvat credit as required under the Cenvat Credit Rules, 2004. However, a....
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....That this fact is fortified by the statements of appellant's employees and others stating that such exchange was being done to meet urgent requirement of raw materials by the sister concerns. For this argument Shri Anand Nainawati (Advocate) relied upon the following case laws:- (i) CCE vs. Coca-Cola India Pvt. Limited - [2007 (213) ELT 490 (SC)] (ii) CCE vs. Narmada Chematur Pharmaceuticals Limited - [2005 (179) ELT 276 (SC)] (iii) CCE vs. Indeos ABS Limited [2010 (254) ELT 628 (Guj.)] (iv) Hindustan Zinc Limited vs. CCE [2008 (232) ELT 687 (Tri. Del.)] (v) P.T.C Industries Limited vs. CCE [2003 (159) ELT 1046 (Tri. Del.)] (vi) Mafatlal Industries Limited vs. CCE [2009 (241) ELT 153 (Tri.)] (vii) CCE vs. Crystal Quinone Pvt. Limited -[2009 (233) ELT 499 (T)] (viii) Tenneco RC India Pvt. Limited....
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....no question of imposition of penalties upon the appellants as per Rules 25, 26 of the Central Excise Rules, 2002 or Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 4. Shri K. Sivakumar (AR) appearing on behalf of the Revenue argued that there is no co-relation between the inputs exchanged between the sister concerns and accordingly the reconciliation based on the notebook maintained by SGS is not authentic and Revenue neutrality cannot be said to be applicable. On the issue of confiscation of cash seized from the residential premises, it was argued that the stand taken by the appellant is an after thought as the source of the cash seized was not properly explained at the time of seizure. He accordingly defended the order-in-original passed by the Adjudicating authority. It was also his case that even if Revenue neutrality is applicable to the transactions between the same group of company still appellants are liable to penalty under Cenvat Credit Rules, 2004 for clearing the inputs as such without reversing the cenvat credit. 5. Heard both sides and perused the case records. The main issue involved in these appeals is whether the cenvated inputs ....
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.... inputs have been delivered at places other than the factories of the appellants. There is no other evidence on record to suggest that inputs cleared by appellants as such without reversal of equivalent credit were seized elsewhere. It is difficult to appreciate as to what benefit appellants would have gained by not reversing cenvat credit on inputs cleared as such to their sister concerns when the sister concerns are also eligible to take cenvat credit again. If Revenue had suspicion about the destination of the inputs cleared without reversal of cenvat credit then investigation done should suggest with cogent documentary evidence that inputs cleared as such were diverted elsewhere or that the inputs exchanged were different. Under the circumstances, appellants argument that it is a case of 'Revenue neutrality' as the recipient units of the appellants were entitled to equivalent cenvat credit is acceptable because in the event of reversal of credit at the time of removal of inputs credit taken the recipient sister concern was entitled to equivalent cenvat credit. It is observed that Apex Court in the case of CCE Pune vs. Coca-Cola India Pvt. Limited [2007 (213) ELT 490 (S.C.)] on....
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....ation of cash of Rs. 30,62,500/- is concerned, it is observed that appellant did produce the records before the adjudicating authority to justify that the cash recovered from the residential premises of Shri Bharat Vyas was reflected in the cash book of the appellants and other firms. If the evidence produced by the appellants were not acceptable then the same could have been countered on the basis of some positive evidence collected during investigation and cannot be brushed aside on presumption or due to the fact that appellants did not furnish any plausible explanation at the time of seizure of the cash as has been attempted by the Adjudicating authority in Para 73.2 and 73.3 of the adjudication order. Appellants relied upon the judgment of CESTAT Kolkata in the case of Pandit D.P. Sharma vs. CCE Calcutta -II (supra) which was also upheld by the Apex Court. In Para 12 of the above Kolkata Bench order, the following observations were made by the Tribunal, which have also been upheld by the Apex Court [2003 (157) ELT A201 (S.C.)]:- 12. We find force in the above submissions of the learned Advocate. It has been laid down time and again in various judgments that the onus to prove t....
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.... received by SOG in cash. Cross examination of certain persons including Shri Sanjay Mishra (SOG) was requested as per Para 58 of the order-in-original was asked by the appellants. There is no order on the request of the appellants for cross-examination. 7.1 It has been argued by the advocate of the appellant that as per Para 1.1 to 1, 10 and pages J-1 to J-4 of their reply to the show cause notices, SOG has given full justification to the effect that no goods were cleared without payment of duty. It is observed from pages 425 to 431 of the paper book filed by appellant SOG that appellant in their reply to the show cause notice, F. No. DGCEI/MZU/I & IS 'B'/12 (4) 99/2007/Pt/2785 dated 17.5.2010 did file detailed submissions (on pages 29 to 35 of the reply) on proposed demand of Rs. 30,62,500/-. It is, therefore, not correct on the part of the appellant that no defence has been filed by the appellant on this proposed recovery. This part of the demand is required to be remanded back to the adjudicating authority to give reasoned order on the stand taken by the appellant after affording them a personal hearing. 8. So far as imposition of penalties upon the appellants under Rules 25 ....