TaxTMI 
TaxTMI 
2016 (4) TMI 191
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....er appreciation of the case, the relevant facts of the case, in brief, are narrated below: (i) M/s Garden Silk Mills Ltd, a public Limited company (hereinafter referred to as 'the Company'), is engaged in the manufacture of Partially Oriented Polyester Yarn (POY) classifiable under CH 54 of the Schedule to the Central Excise Tariff Act 1985 through its three different divisions/ factories/units, namely: a) PFY Division: Central Excise Registration No AAACG 8932 CXM002 manufacturing Partially Oriented Polyester Yarn (POY). b) DT Division: Central Excise Registration No AAACG 8932 CXM003 manufacturing Draw Twisted Polyester Filament Yarn (DT), Draw Wound Polyester Filament Yarn, Texturised Polyester Filament Yarn. c) Vareli Unit/Division: Central Excise Registration No AAACG 8932 CXM001 manufacturing Grey MMF, Texturised Yarn, Sized Yarn, Draw Wound Yarn etc. (ii) PFY Division and DT Division are located at Jolwa and have a common boundary wall within the same premises. The Vareli unit is located at a distance of about 4.5 km from Jolwa. The present appeal is filed by PFY Division (hereinafter referred to 'the Assessee'). ....
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....Revenue preferred appeal before the Hon'ble Gujarat High Court, which was also turned down by order dtd 10.9.2009. Then, appeal was filed before the Hon'ble Supreme Court and by order dtd 15.3.2010 the appeal of the Revenue was dismissed. (x) As the Revenue challenged the OIA dtd 12.04.2005 of the Commissioner (Appeals), no separate R.C. for the three divisions was granted. Ultimately, after the order of the Hon'ble Gujarat High Court on 23.9.2009 separate R.Cs. were issued to the DT unit and Vareli Unit. Thereafter, the Assessee started to maintain records of PLA/Cenvat account separately as per R.C. issued. (xi) Prior to 23.9.2009 the Assessee was paying duty on the basis of single R.C. as provided to the Assessee and availed Cenvat Credit. According to the Revenue, since 15.4.2005 as the Assessee applied for separate R.C. for the three units, it would be considered that these units are separate three units as on 15.4.2005. Hence, the transfer of cenvat credit from DT unit to the Assessee and utilisation by the Assessee is irregular. Accordingly, four show cause notices were issued proposing demand of cenvat credit related to transfer of cenvat credi....
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.... drew the attention of the Bench the order of the Deputy Commissioner, Commissioner (Appeals) and various provisions of the Cenvat Scheme. 4. The other argument of the Ld. Sr Advocate is that the Adjudicating Authority proceeded on the basis that the Assessee requested for three separate R.Cs. to avail the benefit of Notification No 29/2004-CE and 30/2004-CE both dtd 9.7.2004 for its DT Division and Vareli division. He submits that separate proceedings were initiated for availing the benefit of exemption Notification, which has no relation with the present proceedings. The Ld Sr. Advocate also contested the demand of duty as barred by limitation. He submits that there is no suppression of fact with intent to evade payment of duty. The Department was well aware the activities of the Assessee and therefore extended period of limitation cannot be invoked. The Ld Senior Advocate submitted Written Submission alongwith compilation of case laws. 5. Shri P.R.V. Ramanan, Ld Special Counsel appearing on behalf of the Revenue submits that by letter dtd 28.7.2004, the Deputy Commissioner of Central Excise had permitted the Assessee to maintain 'a single consolidated Cenvat account/PLA fo....
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....e independent and separate factories while at the same time, for the purpose of availment of CENVAT credit of duty by the Assessee they claimed that the two factories were one. Thus, the Company conduct is clearly one of 'approbation' and 'reprobation', which in law, is not justifiable. It is submitted that the transfer of Cenvat Credit from DT unit to the Assessee was not in terms of Rules 10 of the Cenvat Credit Rules 2004. 7. The matter was heard at length on 21.1.2016, 28.1.2016 and today i.e., 3.2.2016. The Ld Sr. Advocate, Shri C Harishaker, on behalf of the Assessee and the Ld Special Counsel, Shri P R V Ramanan on behalf of the Revenue argued the matter. The Ld Sr. Advocate submitted Written Submission on 28.1.2016 and additional written submission on 27.1.2016. The Ld Special Counsel submitted Written Submission on 28.1.2016 during the course of hearing and the order is being passed on 3.2.2016. 8. Heard both the sides and perused the records. 9. By the impugned Adjudication Order, the Adjudicating Authority disallowed and ordered recovery of cenvat credit of Rs. 30,19,18,590.00 availed and utilised by the Assessee during the period from 15.4.2005 to September 200....
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....n 15.4.2005 three divisions/units of the Company would be considered as three separate units requiring the maintenance of separate PLA/cenvat Account for discharging duties for clearance of goods as held by the Adjudicating Authority on the basis of Application dtd 15.4.2005of the Assessee OR on 23.9/2009 as claimed by the Assessee on the basis of separate R.Cs. were issued to the other units by the Deputy commissioner of Central Excise and whether the transfer credit from D.T. Unit to the Assessee is regular. 12. On perusal of the records, we find that prior to 25.9.2003 three units/divisions of the Company were holding three R.Cs. as mentioned above. By order dated 25.9.2003, the Deputy Commissioner of central Excise as per application of the Assessee allowed merger of DT unit with the Assessee unit and a common R.C. of the Assessee was in operation for discharging duty. Again, at the request of the Assessee, the Deputy Commissioner of central Excise by Order dated 28.7.2004 allowed the merger of Vareli unit with Assessee unit. Thus, on 28.07.2004, these three units were clubbed and the Assessees R.C. was in operation and the R.C. of the other two units were cancelled. The Or....
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....ctories of a manufacturer can maintain a single PLA and Cenvat Account. No rule under Central Excise Rules, 2002 or Cenvat Credit Rules, 2002 permit a manufacturer to maintain a common PLA Cenvat Credit account or different factories. In present case, the goods manufactured by Jolwa plant was cleared on payment of duty to Vareli unit, therefore, keeping in mind the above mentioned provisions of law, the maintenance of common PLA and Cenvat Credit Account for both the plants viz. Jolwa and Vareli plants is against the provisions of the Central Excise law. In view of the above, I am directed to inform you the facility of common PLA and Cenvat Account provided to you is hereby withdrawn with immediate effect. However, the common registration will continue for both the Jolwa and Vareli units." The Assessee was aggrieved with the direction of the Deputy Commissioner of Central Excise vide order dated 24.01.2005 and filed appeal before the Commissioner (Appeals). 14. At this stage, the Assessee desired to avail the benefit of exemption notification No 30/2004-UE dated 9.7.2004 as amended by Notification No 10/2005-UE dtd 28.2.2005 and requested to the Deputy Commissioner o....
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....puty Commissioner for de-registering the factory permission to segregate, the two factories viz. GSML, PFY & DT Division as well as GSML, Vareli, from the purview of Central Excise registration issued for all the three common factories. This was denied by the Deputy Commissioner vide his letter F.No.Div-II/RG/GSM-Div/2002-03/Part dated 11.03.2005. Against this decision, an appeal was filed before the Commissioner (Appeals). This was decided vide OIA No. VP/181/SRT-I/2005 dated 12.04.2005. In the said order, it has been held that the appellant will be eligible to have separate registrations for their three factories. This decision, if implemented, would have already resulted in separate registrations for the three units and consequentially requiring the maintenance of separate PLA as well as Cenvat Credit Accounts for the different factories. " 17. The Revenue had not implemented the Order dated 12.04.2005 of the Commissioner (Appeals) and filed appeal before the Tribunal. By Order dated 2.5.2008, the Tribunal rejected the appeal filed by the Revenue and directed to issue separate R.Cs. to the three units. The Assessee filed application before the Tribunal directing the Revenue t....
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.... Court dismissed the appeal field by the Revenue. After the order of the Hon'ble Gujarat High Court, the Deputy Commissioner of Central Excise, issued separate R.C. both dated 3.9.2009 to DT division and Vareli Unit, which are reproduced below: (A) R.C. of DT Division: "FORM RC CENTRAL EXCISE REGISTRATION CERTIFICATE [Under Rule 9 of the Central Excise Rules, 2002] This is to certify, subject to conditions specified below, that M/S GARDEN SILK MILLS LIMITED (DT DIVISION), A REGISTERED COMPANY (Registrant and its constitutions) is registered for operating as a MANUFACTURE OF EXCISABLE GOOODS at JOWVA, TAL. PALSANA, SURAT-394315 GUJARAT (address of the business premises) on the basis of the application dated 28.02.2005. Registration Number is : AAACG8932CXM007 As per CESTAT Order No. M/1057/WZB/AHD/09, dt. 25.08.2009. Date: 23.09.2009 Place: Division-II, Surat-I Sd/- Signature of the Deputy Commissioner of Central Excise (With Name and Official Seal)" (B) R.C. of VARELI Division: "FORM RC CENTRAL EXCISE REGISTRATION CERTIFICATE [Under Rule 9 of the Central Excise Rules....
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....d 12.04.2005. In the said order, it has been held that the appellant will be eligible to have separate registrations for their three factories. This decision, if implemented, would have already resulted in separate registrations for the three units and consequentially requiring the maintenance of separate PLA as well as Cenvat Credit Accounts for the different factories." (Emphasis supplied) Thus, it is clear that maintenance of separate PLA/Cenvat Account would arise only after implementation of the earlier Order (Appeal) dated 12.4.2005 to issue separate R.Cs. for three units. Revenue had not filed appeal against the Order dated 31.8.2005 of the Commissioner (Appeal). Perhaps, the earlier order dated 12.4.2005 of the commissioner (Appeal) was appealed before the Tribunal by the Revenue. In our considered view, Commissioner (Appeal) rightly held that after issuance of separate R.C. for three units, they would maintain separate PLA/Cenvat account and prior to that only one PLA/cenvat account would be maintained by the Assessee for discharging duties for clearance of goods. The Order dated 12.4.2005 of Commissioner (Appeal) was implemented on 23.9.2009, when the other two R.Cs. w....
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....hin the jurisdiction of one Principal Commissioner, Central Excise, or Commissioner Central Excise, as the case may be, subject to condition that such person while making application declares the details of such premises in the form specified in Annexure-1 of the said Notification. In the present case, the Company manufactures the goods falling under CH 54 and has more than one premise and they applied for single registration. By Order dated 28.9.2003 and 28.7.2004, the Deputy Commissioner of Central Excise and Customs allowed a single R.C. for three units and extended the facility of common PLA and Cenvat account. In our considered view, such orders would be in force, till the order of the Commissioner (Appeals) was implemented and new R.Cs. were issued by the authority. The Assessee cannot discontinue the maintenance of common PLA/Cenvat Account on its own, unless three separate R.Cs. are issued as ordered by the Commissioner (Appeals). So, the findings of the Adjudicating Authority that as the Assessee applied for separate registration on 15.4.2005 and from that date three Divisions would be considered separately registered as three separate factories, against the provisions of ....
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....ty Commissioner issued R.Cs. on 23.09.2009. Hence, the Assessee should not be punished for delay of issuing R.Cs., which is against all cannons of natural justice and fair play. 23. The Ld Special Counsel submits that the appellants applied for separate registration for the purpose of availing exemption Notification. We agree with the submission of the Ld Sr Advocate that a separate proceeding was initiated against the eligibility of the exemption notification which has no relation with the present proceedings. The Ld Special Counsel submits that the order dtd 27.10.2014 of the Tribunal in respect of the other proceeding on eligibility of the exemption notification, the Revenue filed appeal before the Honble Supreme Court. The Honble Supreme Court admitted the appeal filed by the Revenue. Hence, we would not like to pass any opinion on the admissibility of the Exemption Notification, which is a separate proceedings and pending before the Honble Supreme Court. 24. The present appeal is restricted to whether on 15.04.2004, three units would be considered as separate units and the transfer of credit from DT unit to the Assessee and utilisation of the said credit for clearance....