TaxTMI 
TaxTMI 
2018 (11) TMI 612
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....able on the value addition undertaken in the manufacture of the said goods by the said unit. Para 2 of the Notification states that the duty payable on the value addition shall be equivalent to the amount calculated as percentage of the total duty payable on the said excisable goods of the description specified in Col. 3 of the Table in this para and falling within the chapter of the Central Excise Tariff as given in corresponding entry in col. 2 of the said Table, when manufactured starting from inputs specified in the corresponding entry in Col. 5 of the said Table in the same factory, at the rates specified in the corresponding entry in Col. 4 of the said Table. The goods manufactured falling under the Chapter 38 are covered by SI. No. 5 against of the Table and the percentage of value addition specified for these goods is 34%. The proviso to para 2 of the notification states that when the duty payable on the value addition exceeds the duty payable by the manufacturer on the said goods, other than the amount paid by utilizing the Cenvat Credit during the month, the duty payable on the value addition shall be deemed to be equal to the duty so paid, other than by Cenvat Credit i.e....
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....Duty demand of Rs. 1,44,78,352/- was confirmed against the appellant under proviso to Section 11A of the Central Excise Act, 1944 along with interest on this duty under Section 11 AB ibid; (b) Cenvat Credit demand of Rs. 16,93,436/- was confirmed under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11 A(1) of the Central Excise Act along with interest on it under Section 11 AB ibid and the demand for balance amount of Cenvat Credit was dropped; (c) Penalty of Rs. 1,44,78,352/- was imposed on the appellant under Section 11 AC of the Central Excise Act and another penalty of Rs. 16,93,436/- was imposed on the appellant company under Rule 15(2) of the Cenvat Credit Rules, 2004, read with Section 11 AC of the Central Excise Act, 1944." 3. The matter was adjudicated and demands in the show cause notice was confirmed. Against that order, the appellants is before us. 4. The ld. Counsel appearing on behalf of the appellant and submits that the provision of Section 11-A of the Central Excise Act, 1944 are not applicable to the appellant. Demand in respect of excess refund sanctioned to the appellant. It is his contention that during the impugned period, the appellant....
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....lant. In support of this contention, he relied on the judgment of the High Court of Delhi in the case Micromax Informatics Ltd. of 2016 (335) ELT 446 (Tri. Del.). 7. Heard the parties and considered the submissions 8. On consideration of the submissions made by both the sides, following legal issues arises: (a) whether without challenging the assessment of refund claim, can Revenue issue show cause notice under Section 11AC of the Act or not? (b) In a case where no duty is payable by the appellant and the appellant have taken self credit of the same whether the provisions of Section 11AC of the Act are applicable or not and; (c) whether cenvat credit can be denied on the basis of the test report of inputs or not. Issue No. 1 (a) Whether without challenging the assessment of refund claim, can Revenue issue show cause notice under Section 11AC of the Act or not? We find that in the case of CCE, Shillong Vs. Jellapore Tea Estate reported in 2011 (268) ELT 14(Gau), the Hon'ble High Court has observed as under: "12. The material portion of Section 11A of the Act reads as follows : "11-A. Recovery of duties not levied or not paid or short levied or short-pai....
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....ioner revised or set aside. Having failed to avail of the statutory remedy available under the Act, the Revenue sought to circumvent the law (as it were) by taking recourse to Section 11A of the Act. In our opinion, this was clearly impermissible inasmuch as what is required to be done in a manner prescribed by law, ought to be done in that manner only or not at all. 14.Insofar as the present case is concerned, the prescription of law required that the order of the Assistant Commissioner passed on 29-4-2002 could be challenged only by resorting to Section 35- E of the Act. The Revenue could not initiate collateral proceedings to set aside the order dated 30-4-2002 by resorting to the enabling power under Section 11A of the Act." We find that in the case in hand also self credit of refund taken by the appellant have been sanctioned by the authorities below, therefore, without challenging the same, the show cause notice cannot be issued to the appellant under Section 11AC of the Act in terms of the decision of the Hon'ble High Court of Gauhati in the case of Jellapore Tea Estate (supra). The Ld. AR heavily relied upon the decision of Micromax Informatics Ltd. (supra), the de....