TaxTMI 
TaxTMI 
2018 (3) TMI 922
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....ng under Tariff Item No.32041119 of the Central Excise Tariff Act, 1985. M/s SIL EOU are a 100% Export Oriented Unit. At plot No. D-22, 23 & 24 of MIDC Industrial Area, Lote-Parshuram, Khed, Ratnagiri, DTA unit (other) of M/s Shreyas Intermediates Ltd. (hereinafter referred to 'M/s SIL-DTA') is located which are registered with Central Excise vide Registration No. AADCS4979EXM001. They are engaged in the manufacture of CPC Blue Crude, Pigment Blue, Pigment Green-7, etc. Both the units follow the Central Excise Procedure and avail Cenvat credit on inputs and input services used in or in relation to the manufacture of final product. They also avail Cenvat credit on the capital goods procured by them in their respective factories. 3. An intelligence was received that M/s Sparkon Engineering (hereinafter referred to as M/s Sparkon) located at Block No. 345, Plot No. 156, Mumbai - Goa Highway, Boraj, Tal - Khed, Ratnagiri (bearing Central Excise Registration No. AZEPS2170HXM001) have allegedly supplied manufactured products and provided services to M/s Shreyas Intermediates Ltd; that M/s Sparkon is a proprietary concern registered in the name of one Mr. Puppadiparambil Raju Sajan, an....
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....arch, Shri Suryaprakash Pandey called Shri P. R. Sajan who came forward and introduced himself as Proprietor of M/s Sparkon as well as AGM of M/s SIL. Shri P. R. Sajan stated that, M/s Sparkon were operating from M/s SIL-DTA since January 2009; they are looking after the maintenance of plant and machinery of M/s SIL-EOU and M/s SIL-DTA; that at the address of M/s Sparkon, only an empty shed was there and no activity was carried out. During Panchnama, it was also noticed that the machines such as lathe machines, two magnet machines and other hand held tools belonging to M/s Sparkon were found to be installed and working from the premises at M/s SIL-DTA unit. These machines were utilized for maintenance of the plant and machinery of M/s SIL-DTA and EOU. 5.1 The DGCEI officers interrogated Shri Puppadiparambil Raju Sajan working as Assistant General Manager of M/s SIL and recorded his statements on 25/03/2010 under Section 14 of the Central Excise Act, 1944 (RUD-4). In his statements, Shri Sajan interalia stated that after finishing his 10th Class, he gained experience of fabrication and repair & maintenance of reactors, machineries, etc at Cochin Shipyard; in the year 1997 he join....
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.... 2009, he again joined M/s SIL-EOU plant of M/s Shreyas and is looking after maintenance of plant and machinery of both M/s SIL-EOU and M/s SIL-DTA of M/s Shreyas; that on few occasions, as per the directions of M/s Shreyas, he has signed the tax invoices of M/s Sparkon pertaining to repairs and maintenance of plant and machinery of M/s Shreyas. 5.2 The DGCEI officers interrogated Shri Suryaprakash Pandey, Account Officers and Authorized signatory of M/s SIL-EOU and M/s SIL-DTA (who was actively involved in preparation of documents of M/s Sparkon) on 25/03/2010, and recording his statements dated 25/03/2010 under Section 14 of the Central Excise Act, 1944 (RUD-5). In his statements, Shri Pandey interalia stated that he looks after day-to-day Excise and Service Tax matters of both M/s SIL-EOU and M/s SIL-DTA, that in the year 1994, M/s SIL-DTA, was established in Lote, D-22, 23, MIDC Lote Parshuram; that from 1999, they started manufacturing CPC Blue; that in the year 2006-07, M/s SIL-EOU, was established, at D-21, for manufacture & export of CPC Blue; that both the units (i.e. M/s SIL-EOU and M/s SIL-DTA) are availing the CENVAT credit on raw materials, capital goods, and ....
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.... the premises of M/s SIL-DTA. He also stated, the said invoices have been prepared by him as per the directions of Shri Govind Krishna Sharma, whole time Director (Commercial) of M/s SIL-EOU and M/s SIL-DTA. 5.4 Shri Pandey further stated that the entire financial activities of M/s Sparkon are controlled by M/s Shreyas Intermediate Ltd. from their registered Head office at Mumbai so he is unable to provide the details of payment made by M/s SIL-EOU to M/s Sparkon against the Tax Invoices raised by M/s Sparkon on M/s SIL-EOU for the services; that M/s Sparkon have surrendered the Central Excise and Service Tax Registration in 2010, but the activity of M/s Sparkon Engineering are still continuing from the premises of M/s SIL-DTA; that no documents were prepared for shifting the machinery from the premises of M/s Sparkon at Boraj to M/s SIL-DTA and it was carried out as per the verbal instructions of Shri G. K. Sharma (whole time Director of SIL). No information was given to the Central Excise Department. 5.5 Shri Suryaprakash Pandey, Account Officer of M/s SIL(EOU) and M/s SIL (DTA) was again interrogated and his statements were recorded on 26/03/2010 under Section 14 of the Ce....
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....in relation to these ledgers submitted by him and recorded his statements under Section 14 of the Central Excise Act, 1944 (RUD-11). In his statements dated 05/04/2010, Shri Hari Prakash Bohra interalia stated that he joined M/s SIL in the year 1996 as Manager - Finance and worked till 2003; that thereafter he again joined this company in January, 2010 as General Manager (Finance) and is responsible for all the financial activities /matters of M/s SIL; that he reports to Shri Dinesh Sharma, Managing Director & Chairman of M/s SIL; that he does not know as to why M/s Sparkon was established as he was not working with M/s SIL at that time; that he has submitted the ledgers of M/s Sparkon (consisting of 6 pages) in the books of M/s SIL on behalf of Shri Dinesh Sharma Chairman, M/s SIL. 5.8 Shri Bohra also stated that Shri Dinesh Sharma looks after entire finance matters of M/s SIL and M/s Sparkon and is the final decision making authority. Therefore, any further queries in this matter may be asked to Mr. Dinesh Sharma. 5.9 During the course of further investigations, Shri Puppadiparambil Raju Sajan produced the consumer (electricity) personal ledger of M/s Sparkon for period fro....
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....p; -2 Nos. 8) Hand Drill =1/2" -2 Nos. 9) Shaper 12" slot r' Bed -1 Nos. 10) Power cutting 14" G.W. Dia -2 Nos. That these machineries were not found by the DGCEI officers of Pune during recording of Panchnama on 25/03/2010 drawn at premises of M/s Sparkon Engineering, as the same were shifted to M/s SIL-DTA in the month of January 2009; that at the....
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....IL and it was told to him by M/s SIL that the same would be adjusted later on, in the accounts by M/s SIL; that M/s SIL have not charged any finance charges for providing of finances. 5.12 During interrogation, Shri P. R. Sajan was told that, in the month of September 2009, M/s Sparkon had prepared the following Central Excise Invoices in the name of M/s SIL-EOU (RUD-16):- Inv. No. Date Party Name Description Qty Amount Duty Incl. Edu Cess 3. 01/09/2009 SIL 100% EOU Vacuum System 3 3669000 5231196 4. 01/09/2009 SIL 100% EOU Air Heater 2 5231196 431050 TOTAL 8900196 733376 5.13 Shri P. R. Sajan stated that, these machineries were not manufactured at the premises of M/s Sparkon Engineering, but were manufactured at M/s SIL-DTA/SIL-100% EOU by using machineries shifted from the premises of M/s Sparkon as mentioned above; that for manufacture of above items, M/s SIL-DTA unit had supplied used plates which were utilized in M/s SIL-DTA for manufacture of Vacuum system and Air Heater; that the entire documentation for movement of goods was looked after by M/s SIL, so....
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....s in M/s Sparkon. Both the appellant and M/s Sparkon are located at different places. Both have independent purchases of input/raw materials. Both have independent sales. Both have independent Bank accounts. These facts are not in dispute. Above apart, both are separately registered with the Central Excise Department itself. In light of this admitted factual position, it is incorrect to suggest that M/s Sparkon is a dummy unit floated by the appellants herein. It is incorrect to suggest that Mr. Dinesh Sharma was managing the affairs of both the entities. Assuming this finding was to be true, even then the fact that both entities are being managed by one person cannot lead to a conclusion that both the companies are one and the same. Admittedly, the management of both the entities is separate. There is no common director/employee. Similarly, the fact that money was lent by the appellant to M/s Sparkon cannot be the ground to conclude that both are one and same. 7.3 Further, it is undisputed that the appellant has received goods and services from M/s Sparkon. It is not the case of the Revenue that there were no goods and/or services provided to the appellant. There is no such all....
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....Revenue has relied on the orders of the court below. He further states that it is a prima facie case of availing cenvat credit irregularly and as such the appeals be dismissed. 9. Having considered the rival submissions and the facts on record it appears that M/s Sparkon Eengineering- proprietor PR Sajan was properly set up in the year 2005. They had separate registration under Central excise, has separate premises, had the own plant and machinery and had fabricated and cleared plant and machinery to SIL- EOU. The only fact that the proprietor Mr Sajan was also an employee of SIL, the Financial assistance and management assistance, particularly financial affairs do not lead to the inevitable conclusion that Sparkon was a dummy organisation. Accordingly I find that the ld Commissioner have rightly held that the dispute of credit on capital goods in question, the same were manufactured in the factory premises of the SIL - EOU or DTA, that there is no question of payment of any tax in view of notification number 67/1995 - CE. However SIL EOU is entitled to credit of duties and taxes paid on input and input services used in such manufacture of capital goods as the capital good....