TaxTMI 
TaxTMI 
2018 (1) TMI 1167
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....3/2014: Penalty of Rs. 30,00,000/- on Mr. Pawan Batra. 2. The facts leading to filing of these appeals are, in brief, as under:- 2.1. The appellant company has two units for manufacture of Tyres. The first unit is at Chopanki and the second unit is at Bhiwadi. Since the Bhiwadi unit does not have the facility for preparation of compounded rubber, it sent cenvat credit availed inputs to Chopanki Unit under Rule 4(5)(a) of the Cenvat Credit Rules for job work for preparing the compounded rubber. Sometimes, when some inputs sent by the Bhiwadi Unit were short, the Chopanki unit used its own cenvat credit availed inputs and to the extent the Chopanki Unit used its own cenvated input, in the job work for Bhiwadi unit, it raised invoices on the Bhiwandi unit. According to the appellant, it is purely for the purpose of accounting and as such, there was no physical removal of the inputs from the Chopanki Unit to Bhiwadi Unit, as those inputs had been used only in the job work for the Bhiwadi Unit. Sometimes, in such cases, Chopanki Unit reversed the cenvat credit, but in a number of cases, it did not reverse the credit in respect of the inputs which were used in the job work of the B....
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....Section 11AB and besides this, imposed penalty of Rs. 7.45 crores on Chopanki Unit. In this order, the Commissioner has also imposed penalty of Rs. 30 lakhs on Shri Pawan Batra, Dy. General Manager of the appellant company. Against this order of the Commissioner, Appeal No. E/52781 & 52803/2014 have been filed by the appellant company and its Dy. General Manager, Shri Pawan Batra. (b) Order-in-original No.126 dated 6.2.2014 confirming demand for reversal of cenvat credit of Rs. 2.01 crores against Bhiwadi unit along with interest thereon under Section 11 AB and imposing penalty of Rs. 1,69,105/- on them under Rule 15(2) of the Cenvat Credit Rules. Against this order of the Commissioner, Appeal No. E/52847/2014 has been filed. (c) Order-in-Original No.127 dated 6.2.2014 confirmed cenvat credit demand of Rs. 2.76 crores against the Bhiwadi Unit along with interest thereon under Section 11 AB and imposing penalty of Rs. 1.96 crores on them under Rule 15(2) of the Cenvat Credit Rules, 2002. Against this order of the Commissioner, Appeal No. E/52846/2014 has been filed by Bhiwadi Unit. 3. Heard both the sides and perused the appeal records. 4. Shri Amit Jain, Ld.....
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....e job work when the Chopanki Unit raised invoices on the Bhiwadi Unit, no duty was required to be paid in terms of Rule 3(5) and the Bhiwadi Unit could not take the cenvat credit, that it is well settled law that for considering the cenvat credit in respect of some inputs received by a manufacturer, the payment of duty on the suppliers end cannot be reviewed and in this regard, the appellant rely upon the Apex Court judgment in the case of CCE Vs. MDS Switchgear Ltd. - 2008 (229) ELT 485 (SC). 7. Shri R.K. Mishra, Ld. DR reiterated the findings of the Commissioner in the impugned orders. He also relied on these cases:- i. Jain Ispat V/s CCE, Indore - 2015 (328) ELT 307 (Tri.-Del.) ii. Madhumilan Syntex Ltd. V/s Union of India - 2007 (210 (ELT) 484 (SC) 8. He submitted that the proceedings in the impugned orders are a result of audit as well as search conducted by the Anti-Evasion Officers on 18/07/2012. With reference to the demand of about of Rs. 9.24 crores he submitted that the Chopanki unit has issued invoices to Bhiwadi unit, showing removal of inputs. Even vehicle numbers have been mentioned. In such invoices but no duty was paid. Consequently, the dem....
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....t's grievance before the authorities below was that there was no removal of the goods (pattern tools) at all made from the factory of the appellant nor there was any delivery of such goods (pattern tool) made by the appellant to Maruti Udyog Ltd. But the appellant had all along used the pattern tool for manufacture of automobile components in its factory using the pattern tool. This factual position is not disputed by Revenue and no evidence to the contrary is on record. The appellant satisfied that in terms of page 25, goods manufactured using the pattern tools have suffered duty. The appellant had also not at all physically delivered the pattern tools and no such delivery was proved by Revenue by any evidence nor delivery is the allegation in the show cause notice. The appellant had made it clear to Revenue in the foot note of the invoice at page 24 of appeal folder that excise duty at "prevailing rate" will charged at the time of physical removal of pattern from its factory. This is sufficient to say that there was no physical delivery of pattern tool ever made by the appellant even till issuance of SCN. The appellant has proved its fairness indicating that it is prepared to pay....
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....e learned advocate are squarely applicable. We are in agreement with the above contentions of the appellant that Rule 7 (1) (b) of CENVAT credit rules cannot debar availment of CENVAT credit at Bangalore factory for the simple reason that the transaction between the two factories is not one of sale. It should also be borne in mind that both the factories belong to the Government of Karnataka. Although the irregularity committed in Mysore resulted in Revenue loss to the Mysore Commissionerate, looking into the totality of the circumstances, there was no revenue loss to the exchequer at all. This fact has been recorded by both the Adjudicating authorities. Whatever duty is paid at Mysore on Sandalwood oil, the same is taken as CENVAT credit at Bangalore. The duty on the finished products namely, toilet soaps is discharged under Section 4A on the basis of MRP. Since the value of soap takes into account the escalated cost of the sandalwood oil there cannot be any short payment of duty on the toilet soaps at Bangalore. In effect, the Government did not suffer any loss. In view of the above reasons there is absolutely no justification to deny CENVAT credit taken by Bangalore factory base....