TaxTMI 
TaxTMI 
2012 (1) TMI 154
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....reported in 2007 (218) E.L.T. 419 (Tri.-Ahmd.) has held in favour of the appellant, on the point of limitation. Elaborating on the arguments, Shri Vishal Agarwal, learned C.A. submits that M/s. Sterlite Optical Technologies Ltd. is a company engaged in the manufacture of optical fiber. They had earlier cleared the said goods to an independent buyer, who rejected the same and returned to the manufacturer. The same were rectified and cleared subsequently to the appellant on payment of duty in terms of Section 4 of the Central Excise Act, 1944. It so happened that the assessable value and the consequent payment of duty originally paid by the appellant and of which they had taken the credit at the time of return of the goods. The above discrepancy was subsequently pointed out by the Central Excise authorities, who opined that the manufacturer had to reverse the entire credit of duty taken at the time of receipt of the goods in their factory. In these circumstances, the differential amount of duty was debited by the manufacturer, supplementary invoices raised, sent to the appellant, who availed the Modvat benefit on the basis of the same. 3. He further clarifies that the supplem....
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....__________) Sd/- (Archana Wadhwa) Member (Judicial) 6. [Per : B.S.V. Murthy, Member (T)]. - I have gone through the order proposed by learned Member (Judicial). Since I am unable to agree with the order proposed, I record a separate order. 7. The facts of the case in brief are that the appellants has availed Cenvat credit amounting to Rs. 21,69,668/- on the strength of supplementary invoice No. 1199, dated 5-12-2001 issued by M/s. Sterlite Optical Technologies Ltd., E-l & E-2, MIDC Industrial Area, Waluj in RG-23A Part II Entry No. 38/625 dated 27-12-2001. Their Waluj unit has issued the above supplementary invoice No. 1199, dated 5-12-2001 on payment of differential duty which was detected by the preventive officers of Aurangabad Commissionerate. Their Waluj unit was issued a show cause notice for recovery of duty short paid by their Waluj unit and demand has been confirmed by the Commissioner of Central Excise & Customs, Aurangabad. 8. Commissioner (Appeals) in his impugned order has observed that the C.C.E., Aurangabad has confirmed the duty demand on the ground of suppression of facts of invoking extended time limit. He has als....
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....sp;After appreciating the submissions from both sides, I find that firstly payment of short duty by the manufacturer of the goods while clearing the same cannot be attributed to any suppression, mis-statement or fraud on their part. It is all a matter of record that the returned goods were entered in their statutory records and credit of duty paid originally was taken. Subsequently, duty was paid in terms of Section 4, which was quantified on the lower side. As such in my views, it is a case of interpretation of the provisions of law and is not a case of any clandestine activities reflected on the part of the manufacturer, so as to deny the Modvat Credit of duty paid by the manufacturer on the basis of supplementary invoices. In any case, I find that the credit was availed by the appellant on records and monthly returns were filed by them, enclosing the said invoices. The statement dated 13-9-2002 of the appellant's authorized signatory clearly brought the above fact on record that the Cenvat credit of Rs. 8,11,225/- was availed by them on the basis of supplementary invoices. In spite of that the Revenue took about two years to issue the show cause notice. In the said scenario, it ....
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....f issue of show cause notice. "Rule 7(1) - The Cenvat credit shall be taken by the manufacturer on the basis of the following documents, namely - (b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty of customs leviable under Section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Act or of the Customs Act, 1962 or the rules made thereunder with intent to evade payment of duty." 13. Rule 7(l)(b) of Cenvat Credit Rules, 2002 relates to availment of credit by the manufacturer on the basis of supplementary invo....
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....several decisions of the Tribunal in support of his contention that ignorance of law is not an excuse and consequences as per law would follow. I find that these decisions relevant and accordingly the citations are given below : (i) M/s. Rakesh Kanungo (P) Ltd. v. C.C.E., Mumbai - 2004 (178) E.L.T. 1061 (Tri.-Mumbai) (ii) M/s. Jeco Industries v. C.C.E., Calcutta-I - 2002 (141) E.L.T. 358 (Tri.-Kolkata) (iii) C.C.E., Rohtak v. M/s. Bindal Cotex (P) Ltd. - 2004 (165) E.L.T. 298 (Tri.-Del.). In any case, in view of the specific legal obligation cast on the appellant and failure to fulfil the same on the part of the appellants in view of the fact that the supplier unit is a sister unit of the appellant, I consider that the extended period has been rightly invoked in this case. 15. Learned advocate made a claim that even Commissioner (Appeals) has accepted that it was ignorance on their part which led to irregular availment of credit. I find that this claim made by learned advocate is not correct. Relevant observations of the Commissioner (Appeals) are reproduced below : "6. Regarding invoking extend....
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....2 was informed to the revenue inasmuch as the said transactions were recorded in ER-1 returns of the respective months. Similarly, the credit entries for Cenvat credit were also recorded in the Cenvat accounts and mentioned in the monthly Cenvat credit statements. As such, it is their contention that the entire facts were disclosed to the revenue. However, I find that though the same were filed, the appellants, on the basis of simple interpretation of Rule 4, were not entitled to the credit. No advice was sought by them from the revenue. This fact was also not brought to the notice of revenue independently. What the appellant is contending is to the effect that the revenue should have compared the ER-1 returns of the month of July, 2001 and January, 2002 with the subsequent Cenvat credit accounts and should have found that the capital goods for which the credit has been taken was subsequently sold by them, which seems to be impracticable and impossible. As such, having taken the credit, when the same was not admissible, and no separate independent information having been given to the revenue and there being no ambiguity in the law are factors which extend support to the revenue's c....
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....cal) DIFFERENCE OF OPINION Whether all the appeals are to be allowed as held by Member (Judicial) or the appeal filed by the Company has to be rejected and the appeals filed by other two appellants have to be decided by reducing the penalty to Rs. 5,000/- each as held by Member (Technical). Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) 19. [Per : B.S.V. Murthy, Member (T)]. - Vide order No. M/562-564/WZB/AHD/09, dated 22-4-2009, difference of opinion was recorded as under : "Whether all the appeals are to be allowed as held by Member (Judicial) or the appeal filed by the Company has to be rejected and the appeals filed by other two appellants have to be decided by reducing the penalty to Rs. 5,000/- each as held by Member (Technical)." 20. The matter was referred to the Hon'ble President to nominate a third Member to decide on the difference. Hon'ble President in his order dated 10-8-2010 observed that the two Members cannot refer the entire appeal because of difference of opinion instead of making a statement referring the point or points of difference between them. He relied upon th....
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....before me as per orders of Hon'ble President for deciding the points of difference arose between the Bench while deciding the appeals No. E/1292 to 1294/2006. 23. The Difference of Opinion, which has been referred to me are as follows : (i) Whether the Show Cause Notice issued on 22-9-2004 has to be held as time barred as held by ld. Member (Judicial) or invocation of extended period in this case was in accordance with the law as held by ld. Member (Technical). (ii) Whether the fact that Rule 7(l)(b) as it existed in the statute book at the time of issue of Show Cause Notice can be invoked for considering applicability of extended period in the facts and circumstances of the case as held by ld. Member (Technical) or not. (iii) Can it be said that the observations of Commissioner (Appeals) in Para 6 of his order can be said to have held the contravention on the part of the appellants on account of ignorance of law as held by ld. Member (Judicial) or can it be said that the Commissioner has refused to accept the plea of ignorance in his order as held by ld. Member (Technical). (iv) Whether the....
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....Credit Rules, 2002 and submit that the appellant had filed Cenvat returns to the authorities in time. He would also submit that the supplementary instructions given by the authorities in respect of scrutiny of assessment will clearly indicate that the lower authorities should scrutinise RT-12 returns submitted by the assessee and he would draw my attention to said procedure. He would submit that there was no reason for them to hold that the Cenvat credit availed by them was incorrect. It is his submission that there was no requirement of declaration of any kind in the monthly returns regarding availment of Cenvat credit of the duty paid on supplementary invoice. Hence, there was no suppression and there cannot be any wilful mis-statement to evade payment of duty. He would rely upon the judgment of Hon'ble High Court of Gujarat in the case of Prolite Engineering Co. v. UOI - 1995 (75) E.L.T. 257 (Guj.), Gopal Jarda Udyog v. C.C.E. - 2005 (188) E.L.T. 251 (S.C.), CIT, Calcutta v. Burlop Dealers Ltd. - (1971) 1 SCC 462, Essel Propack Ltd. v. C.C.E. - 2004 (167) E.L.T. 547 (Tri.-Mumbai). He would submit that availment of Cenvat credit by the appellant on the supplementary invoices issu....
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....ppellant herein availed Cenvat credit of Rs. 21,69,668/- based upon the supplementary invoice No. 1199, dated 5-12-2001 raised by the supplier, incidentally sister concern of the appellant. It is also on record and undisputed that the appellant herein had filed monthly ER-1 return for Feb. 2001 to authorities in time. At this juncture, I have to refer to the Supplementary Instructions of C.B.E. & C. and more specifically Chapter VI which relates to scrutiny of the assessment. I am reproducing the same below : Part VI SCRUTINY OF ASSESSMENT 1. Introduction 1.1 In view of the self-assessment procedure wherein the assessee himself assesses the duty liability the responsibility of the departmental officers is to scrutinise the assessment made for verification of its correctness. 2. Scrutiny of Assessment 2.1 The Central Excise officers having jurisdiction over the factory/premises of the assessee is responsible for the scrutiny of returns. For this purpose, the said officer(s) may require the relevant documents. Though the statutory records have been dispensed with, the assessee is required to maintain private records containing all requisite infor....
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....from the assessee. It is seen that the lower authorities have recorded a statement of Shri T. Baburaman, Authorised Signatory of the appellant under Section 14 of Central Excise Act, 1944. On reading of the said statement, I find that Shri Baburaman has categorically stated that they were not aware of the circumstances under which the supplementary invoice No. 1199, dated 5-12-2001 was issued by their sister concern from Aurangabad. On the basis of said statement, show cause notice which was issued to the current appellant, had alleged as under : "It appears that the Silvassa unit was fully aware of the fact that their Aurangabad unit had raised supplementary invoice No. 1199, dated 5-12-2001 after the Central Excise Preventive officers of Aurangabad (HQrs) pointed out short payment of duty on goods that were earlier supplied to their unit, and they had taken Cenvat credit on supplementary invoices issued by their Aurangabad unit for differential duty paid by Aurangabad unit. The Silvassa unit had also not informed the department before or after taking such Cenvat credit of Rs. 21,69,668/- on the basis of the said supplementary invoices. Such type of act is nothing but suppressi....