TaxTMI 
TaxTMI 
2017 (5) TMI 383
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....ility or CENVAT credit on inputs and capital goods. During the course of audit by Accountant General Office, it was noticed that appellants had availed irregular credit of Rs. 86.52 lakhs on 23 tonnes of Nickel, which was alleged to be misappropriated by the employees of the Common Material Management Stores (CMM) in the appellant factory. The same had come to the notice of the AG audit team through the audit report of the appellant company. It is the case of the appellant that on 10/03/2008, there was and attempt of burglary for clandestine removal of Nickel (input) from the appellant factory. The said attempt was foiled by CISF and FIR was lodged with the Police Station Later on 10/04/2008, a fire accident occurred in the CMM stores and D....
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.... contravention of Rule 3(5) of CENVAT Credit Rules, 2004 as the credit was not reversed at the time when the nickel (input) was removed from the factory. In the show-cause notice, the demand was raised in respect of 23 tonnes of nickel to the tune of Rs. 86,52,000/- along with interest and also proposing to imposed equal penalty. After due process of law, the original authority held the total quantity of Nickel removed to be 5411 kgs. and confirmed the duty demand to the tune of Rs. 21,15,313/- along with interest and imposed equal amount of penalty. Being aggrieved, the appellants are now before the Tribunal. 3. On behalf of the appellant, the learned counsel Shri. Z.U. Alvi submitted the following main contentions:- i. That the demand h....
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.... facts. That therefore the show-cause notice issued on 18/02/2011 invoking the extended period of limitation is not sustainable. ii. As soon as the company came to know about the removal of Nickel, an enquiry was set up. In the preliminary report, the quantity of nickel removed was not concluded. Only from the report dated 16/07/2009 filed by the Senior Executive Committee, it was mentioned that quantity of 5411 kgs. of Nickel was removed during the period 2001 to 2008. Prior to this date, appellant company had no knowledge about the quantity that had been removed and therefore could not be held liable for not reversing the credit / wrongful availment of credit. iii. The appellant does not admit the duty demand on 5411 kgs. of Nickel. The....
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....antanuprasad Jaishanker Bhatt [LAWS(SC0-1966-2-7], CCE Vs. Chemphar Drugs & Liniments [1989(40) ELT 276 (SC)] and in State of Maharashtra Vs. Kanchanmala Vijaysing Shirke [LAWS(SC)-1995-8-87] to content that appellant company cannot be held liable to reverse the duty, since the removal of Nickel by employees was not done authorisedly or in the course of employment. 4. Against this, the learned AR Shri P.S. Reddy reiterated the findings in the impugned order. He submitted that the appellant company is a manufacturer who was clearing goods on payment of duty. Therefore the appellant company is liable to follow the provisions of Central Excise Act and Rules. The said Act lays down the provisions and procedures with regard to the maintenance o....
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..... BHEL, appellant company, vide report date 06/05/2009 reported that about 3 tonnes of Nickel valued at Rs. 6 crores was misappropriated Prior to this, the preliminary inquiry into the theft / misappropriation / removal of nickel was conducted. Thereafter an enquiry into the fire accident in which documents regarding removal of Nickel were lost revealed that the fire was not an accident but articulated one. None of these facts were brought to the knowledge of the Department. Therefore, appellant company is guilty of suppression of facts and the show-cause notice issued invoking extended period is legal and proper. 6. Later pursuant to audit objection, they reversed the CENVAT credit of Rs. 21,15,313/- attributable to 5411 kgs. of Nickel re....
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....03-04 40000 2004-05 49000 2005-06 51836 2006-07 51800 2007-08 67737 320373 Less: Closing stock 21823 Issues 327271 Consumption as per foundry 2001-02 46292 2003-03 49591 2003-04 43021 2004-05 42123 2005-06 45351 2006-07 48077 2007-08 47405 321860 Difference 5411 The adjudicating authority has not relied upon the General Manager's report which reports removal of 23 tonnes of Nickel. The adjudicating authority states that it is based on tampered documents. When the department has issued show-cause notice b....