TaxTMI 
TaxTMI 
2019 (5) TMI 913
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....emand interest at the rate as applicable from time to time on the amount proposed to be demanded as above, from Noticee No 1, M/s Indo Rama Synthetics Ltd under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. 13.02 I impose a penalty of Rs. 3,63,05,053/- [Rupees Three Crore Sixty Three Lakhs Five Thousand and Fifty Three only] on the Noticee No 1, M/s Indo Rama Synthetics Ltd under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 13.03 I impose a penalty of Rs. 36,00,000/- [Rupees Thirty Six Lakhs Only] on the Noticee No 2, M/s Indo Rama Petrochemicals Ltd, under Rule 26 of Central Excise Rules, 2002. There shall be no penalty under Rule 27 ibid on the Noticee No 2." 1.3 Order in Original No 12/2008/C date 21.08.2008 [Appeal No E/1101/08]- "12.01 I disallow an demand an amount of Rs. 3,97,70,821/- [Rupees Three Crore Ninety Seven Lakhs Seventy Thousand Eight Hundred and Twenty One only]{i.e. Rs. 3,89,89,358/- (Basic) + Rs. 7,79,881/- (Edn Cess) + Rs. 1,582/- (S & HS Cess)]towards the credit wrongly availed on capital goods used for construction of power plant durin....
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.... that power plant was not the property of appellant. The goods against which the appellant has taken the credit were used by the 2nd Party for setting up the power plant. These goods were actually never received by the appellants in their factory premises. Even the payments for goods/ raw material, erection and installation of the power plant were made by the 2nd Party. Thus the CENVAT Credit taken by the appellants was irregular and inadmissible in view of Section 2(d) of Central Excise Act, 1944 read with Rule 2 (a) of Cenvat Credit Rules, 2004. iv. The final output of power plant is electricity, steam and ash which are not chargeable to excise duty or are exempt from payment of Central Excise Duty and thus the credit of duty paid on the goods used in erection of the power plant is not admissible in view of Rule 2(a) and 2(h) of CENVAT Credit Rules, 2004. v. The credit has been taken in respect of certain goods namely a. Bunker used temporarily in the boiler for storage of crushed coal; b. Ash handling system used for disposal of ash; c. The supporting structures used for platform and for installation of various parts and components ar....
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....products namely polyester yarn, polyester chips etc. Hence the credit has been correctly taken by them. b. Ownership of capital goods is not relevant for taking the Cenvat Credit. As per Rule 4 of the CENVAT Credit Rules, 2004, the ownership of capital goods has not been prescribed as criteria for taking the CENVAT Credit. Reliance is placed on the decisions in case of German Remedies Ltd [2002 (144) ELT 606 (T), Maruti Udyog Ltd [2004 (165) ELT 226 (T)], Sharda Motor Industries Ltd [2002 (150) ELT 759 9T)], Hongo India (P) Ltd [2003 (160) ELT 470 (T)] & Iljin Automotive Pvt Ltd [2004 (175) ELT 169 (T)]. c. All the goods on which the credit has been taken by the appellants were used in their factory since the thermal power plant is within their factory premises without any boundary wall or any fence demarcation. The fact that certain portion of the land within their premises has been leased out for setting up the said power plant will not mean that the said portion of land is not the part of their factory premises. Decision relied upon by the commissioner viz Majestic Auto Ltd [1999 (107) ELT 133] has been differed by the tribunal in case of Dalmia Cements (Bharat....
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.... (195) ELT 164 (T)] upheld by Bombay High Court in Central Excise Appeal No 187/2006 order dated 19.07.2007, Aditya Cement [2008 (221) ELT 362 (Raj)] c. Miscellaneous materials but classified under chapter 84 c. 2nd Party was merged with the appellant with effect from 01.02.2007, Hence the denial of credit on the ground that the same was separate entity incorrect. 4.1 We have Shri Gajendra Jain, Advocate for the Appellant and Shri Bidhan Chandra, Additional Commissioner, Authorized Representative for the revenue. Both appellant and revenue has filed the written submission in the matter 4.2 Arguing for the appellants and in his written submissions, learned counsel submitted that- a. Goods on which the credit has been taken by the appellants were all used in their factory since thermal power plant (TTP) is situated within the factory premises of the appellants and there is no boundary wall fence/ demarcating TTP from the factory premises. Merely for the reason that the place within the premises where TTP has been set up is leased to 2nd Party will not mean that the capital goods used in such place are not in their possession. b. The issue inv....
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.... Industries Ltd [2002 (150) ELT 759 (T)], Maruti Udyog Ltd [2004 (165) ELT 226 (T), Sunrise Chemical Industries [2010 (262) ELT 110 (GUJ)], Modernova Plastyles Pvt Ltd [2015 (323) ELT 312 (Bom)], Iijin Automotive Pvt Ltd [2004 (175) ELT 169 (T)] j. Denial of credit on the support structures used for installation of TPP is not proper. The decision of Vandana Global [2010 (253) ELT 440 (T-LB)] relied upon by the Commissioner has been set aside by the Chhatisgarh High Court reported at [2018 (16) ELT GSTL 462 (Chhatisgarh)]. Issue is also covered by the decision in case of Mundra Port [2015 (39) STR (Guj)]. k. The decision of Tower Vision [2016-TIOL-539- CESTAT-DEL-LB] relied upon by the AR has been overruled by the Delhi High Court in case Vodafone India [2018-TIOL-2049-HC-DEL-ST] l. The fact that 2nd Party has merged with the Appellant is not disputed and hence denial of the credit on the ground that the same was separate entity is incorrect in law. m. Show Cause Notice dated 5.2.2007 sought to deny the credit availed by them during the April 2005 to November 2006. The demand for the period April 2005 to November 2005 is beyond normal period of li....
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.... 10 years. On default, default notice to be served. If default not remedied, Termination Notice was to be served for termination. • Article 9, 10,11- Liquidated Damages, Force Majeaure and Arbitration respectively. • Article 11 & 12- Both parties to indemnify and other Miscellaneous Provisions. • Schedule 3 - Appellant to give 2nd Party a No Objection Certificate. g. As per MOU executed between Appellant ad 2nd Party on 26.09.2005: • Appellant sub leased 46219 sq mts of its premises to 2nd Party. • Clause (ii)- 2nd Party agreed to develop, design, procure, finance, construct, own, operate and maintain a TPP in the premises leased to them. • Clause (iii)- 2nd Party agreed to sell power generated to Appellant and any excess power could be sold to any other person. • Clause (iv)- Both parties agreed to execute Definite Power Purchase Agreement (PPA). • Clause (vii)- Contract to be valid for the period from 1.04.2005 to 31.03.2005. No exit clause provided. h. 2nd Party sought permission from Director Steam Boilers Maharashtra for erecting Boiler at its leased premis....
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....s and duties under various Acts. Hence the premises occupied by IRPL are not the factory of Appellant as defined in section 2 (e) of Central Excise Act, 1944 or the Factories Act, 1948 s. Legal Provisions of CENVAT Credit Rules, 2004 • Rule 2(a) defines "Capital Goods" and prescribes that such goods must be used in the factory of the manufacturer of final products. • Rule 2(h) defines the Final Product and includes goods used for manufactured or produced from input. • Rule 2(k) defines input and includes goods used for generation of steam or electricity used within the factory of production. • Rule 3(1) provides that credit of specified duties paid on capital shall be allowed only if the capital good are received in the factory of manufacture of final products after 10.09.2004. • Rule 4(2) provides that credit of any capital goods shall be allowed only if the capital goods are received in factory of manufacture of final products. The installment system of allowing credit is available only on receipt of capital goods in the factory of manufacture of final products. t. Mention of Appellants as consigne....
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....components of capital goods. • Tower Vision India Pvt Ltd [2016-TIO-539- CESTAT-DEL-LB] • Virdi Brothers [2007 (207) ELT 321 (SC)] • GVK Industries Ltd [2005 (182) LT 364 (T)] • Spectrum Power Generation Ltd [2004 (177) ELT 968 (T)] bb. Appellants are thus not entitled to the CENVAT credit claimed by them. This credit has been availed by them by suppressing the fact that goods were not received in their factory. They are also liable to interest and penalty. 5.1 We have considered the impugned orders along with the submissions made in appeals and during the course of argument. 5.2 The issues for consideration in the present case can be listed as below: i. Whether the plot of land leased out by the appellant to 2nd party formed the part of factory premises of the Appellant? Who owns, operates and maintains the Thermal Power Plant erected on that plot of land? ii. Whether the CENVAT Credit in respect of Capital Goods, receive by the 2nd Party on the leased plot and used by them for erection/ installation of thermal power plant will be admissible to appellant for the reason that invoices showed them as....
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....e of land from the Noticee No 1 for erection of Thermal Power Plant." 5.3.3 Commissioner has in para 6.09.01 to 6.09.04 has discussed this issue as follows: "6.09.01 The Noticee No 1, has contended that the power plant is located within their factory premises. This argument is not acceptable in as much as the land has been leased out to Noticee No 2, M/s Indo Rama Petrochemicals Ltd., Noticee No 1 has no locus standi as regards the interest/ possession of the leased premises. In terms of the lease agreement, the Noticee No 2 enjoy the leased premises and therefore the claim of Noticee No. 1 that the said leased premises is part of factory is not legally valid. 6.09.02 "The normal connotation of the term "lease" is the preservation of the demised estate to be in occupation and enjoyment thereof for a specified period or in perpetuities for consideration; the corpus by user thereof does not disappear and at the expiry of the term or on termination then same is handed over to the Lessor subject to the terms of the contract express or implied" as held by the Hon'ble Apex Court in the case of State of Karnataka Vs Subash Rukmayya Guttedar AIR 1993 SC 860; 1993 supp ....
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....ses of 2nd Party and Appellant had no right to use that plot for any of their production activities. There is no dispute to the fact that this plot has been carved out of the Plot No A-31 MIDC Industrial Area, Butibori District Nagpur. No separate identification has been assigned to the plot leased by Appellant to 2nd Party and even no board identifying the plot with the 2nd Party has been put. 5.3.7 The fact 2nd Party is paying for all the services provided by the Appellant to them in respect of their operations at carved out plot, clearly establishes the distinction between the two and the fact that Appellants themselves do not for any purpose treat this plot as part of their premises. The Memorandum of Understanding dated 26th May 2005 signed between Appellants and 2nd Party clearly states- "i) 46219 sq Meter out of 809457 Sq Meter, situated at A-31, MIDC Butibori Nagpur would be sub lased by IRSL to IRPL subject to necessary permission in this behalf being obtained from MIDC. The lease rental shall be payable by IRPL to IRSL on a monthly basis on mutually agreeable terms ii) RPL would develop, design, engineer, procure, finance, construct, own, operate & ma....
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....e months. It is seen from the letter dated 17.10.005 issued by the Notice No 2 to the Director, Steam Boiler Maharashtra State, 3rd Floor, Tardeo Road Mumbai that the Noticee no 2 has requested for permission to install boiler for erection of power plant at Butibori Nagpur. From the copy of letters from the Banks cited in para 02.08 supra it is observed that the Noticee no 2 had taken loans from the banks for setting up power plant at Butibori. 6.10.01 Thus it is seen that the noticee No 2 is separate legal entity with liberty to sell the power generated in power plant to third parties and has erected the power plant on leased out land of Noticee No 1." 5.3.9 To all the statutory authorities for seeking the clearances the owner and operator of the power plant is shown as 2nd Party and not the Appellant as is evident from following correspondences: 5.3.10 One question that needs to be answered is whether the entire plot covered by A-31, MIDC Industrial Area, Butibori Nagpur on which the factory of Appellants is located needs to be considered as factory for manufacture of finished goods. The ground plan of the plot A-31, MIDC Industrial Area, Butibori Nagpur is reprodu....
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.... supply of electricity to the residential complexes is wholly unconnected with or related to the final products produced in the factory of the assessee. Therefore, reliance placed on the above decisions of the Apex Court is wholly misplaced." 5.3.12 Further Hon'ble Supreme Court has in case of South Eastern Coalfields Ltd. [2006 (200) ELT 357 (SC)] held as follows: "11.The question, therefore, in this case is that "whether the workshop in question can be said to be situated within the precincts of the mine". 12.Before the Tribunal reliance was placed by the learned counsel for the assessee on an earlier order of the Tribunal in Central Coalfields Ltd. v. CCE, Jamshedpur dated 16-9-1997, in which it was held that the word "precincts" cannot be restricted to an area of four Kms. In that case the Tribunal held that the workshop in question was situated within the precincts of the mines to which it was catering, even though it was situated at a distance of 50 Kms. from the said mine. 13.In the present case the Tribunal rejected the assessee's claim for exemption on the ground that since the mine was registered under the Factories Act, it cannot have the be....
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....g i.e. Lotus. 22.According to the literal rule of interpretation, if the meaning of a word or expression is clear, there is no scope for interpretation and we have to follow the plain and grammatical meaning. 23.However, where the meaning of a word or expression is not clear, obviously the literal rule of interpretation cannot be applied, and hence we have to take resort to other rules of interpretation e.g. the Heydon's mischief rule, the purposive rule, etc. In our opinion in the present case the purposive rule should be applied. Under this rule, we have to see the purpose for which the provision was made. Looking at it from this angle, we are of the opinion that the word 'precincts' has to be given the broader meaning and not the narrower meaning. 24.In other words, we have to interpret the word 'precinct' in the exemption notification to mean the surrounding region or area, as defined in Collins English Dictionary or the surroundings or environs of a place as defined in the New Shorter Oxford English Dictionary. This is because the purpose of the exemption notification is to grant exemption from excise duty to goods produced in a mine so as to encoura....
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....gainst these orders vendors have supplied the goods to them at the premises located at A-31, MIDC Industrial Area Butibori Nagpur. Copies of the letter dated 16.10.2006 of M/s Yes Bank and letters dated 12.04.2005 & 07.05.2005 of State Bank of India are reproduced below: 5.4.3 From the balance sheet of 2nd Party relevant extracts are reproduced below: 5.4.5 From the Note appearing in Schedule 2, it is stated "1. Term Loan from Banks are secured/ to be secured by way of first charge over entire fixed assets both present and future of the Company situated at Butibori, said loan is further secured by second charge on entire current assets of the Company situated at Butibori". Further in Schedule 6: Notes on Accounts, it is stated: "1 Significant Accounting Policies b) Expenditure During Construction Period Expenditure incurred during construction period on Projects is carried forward under Pre-operative expenses pending allocation/ capitalization and is allocated to Fixed Assets on the completion/ commissioning of the Projects. d) Borrowing Cost Interest and other cost in connection with the borrowing of the funds to the extent related/ attrib....
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....allation, Office equipment, furniture and fixtures of the power plant will capitalize in the accounts of M/s Indo Rama Petrochemicals Ltd. Further the depreciation of the fixed assets comprising of Plant and Machinery, Electrical Installation, Office Equipment, furniture and fixtures will be charged to the account of M/s Indo Rama Petrochemical Ltd." 5.4.7 In his statement recorded on 30/10/006, Shri Debdutta Chatterjee, Chartered Accountant, General Manager (Finance & Accounts) with Appellants and Power of Attorney holder for 2nd Party, agreed with the statement dated 27.10.2006 of Shri Ramesh Deshpande, Sr Manager (Excise). He has further in his statement dated 08.12.2006 stated- 'Q. When neither you are an employee of Indo Rama Petro Chemicals Ltd., nor holding any post in the company what is the reason for having power of attorney of M/s Indo Rama Petrochemicals Ltd. Ans. M/s Indo Rama Petrochemicals Ltd and Indo Rama Synthetics Ltd are group companies and are related companies, further, M/s Indo Rama Petrochemicals Ltd is installing a power plant at MIDC Butibori on a piece of land sub-leased by M/s Indo Rama Synthetics Ltd., Butibori situated within plot ....
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.... Q. When you are independently installing the power plant why the invoices of the capital goods etc. are being received from the vendors in the name of Indo Rama Synthetics Ltd. and a/c of Indo Rama Petrochemicals Ltd.? Ans.- It is because the power plant is located in the premises of Indo Rama Synthetics Ltd which have been leased to Indo Rama Petrochemicals Ltd. and the power that will be generated will be sold to Indo Rama Synthetics Ltd. and group companies and that will be used in the manufacture of their excisable goods Q. When the power project is being installed by Indo Rama Petrochemicals Ltd. and Indo Rama Petrochemicals Ltd. is also incurring expenditure for the setting up of the same for commercial purpose the invoices for the project should have been in your name. Only for allowing Indo Rama Synthetics Ltd. to take CENVAT Credit because Indo Rama Petrochemicals Ltd. cannot utilize the same, the whole system is generated, please explain. Ans.- We reiterate that the sole purpose of power project is to supply power to Indo Rama Synthetics Ltd and group companies for manufacture of excisable goods and hence name of Indo Rama Synthetics Lt....
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....ises but were but were received by the 2nd Party on the plot leased out to them by Appellants. 2nd Party has not only received the said goods but have reflected the same in their book of accounts as capital/ fixed assets. 5.4.10. Since the goods were never received by the Appellant's in their premises the and were not installed, operated or used in any process of manufacture of final products, these mention of their name as consignee on the invoices is nothing but to create the instrument/ document for passing on the inadmissible credit to them. 5.5 Whether the CENVAT Credit on Capital Goods is admissible in respect of those Capital Goods which are reflected as Capital Assets in book of accounts of the other legal entity and have been capitalized therein. 5.5.1 Provisions of CENVAT Credit Rules,2004 as it existed then, and relevant for further discussions are reproduced below: RULE 2. Definitions. - In these rules, unless the context otherwise requires, - (a) "capital goods" means:- (A) the following goods, namely :- (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No 6802 and sub heading No 6801.10 of ....
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....dit up to a maximum of one lakh rupees in the financial year 2002-2003, and the balance in subsequent years. (3) The CENVAT credit in respect of the capital goods shall be allowed to a manufacturer, provider of output service even if the capital goods are acquired by him on lease, hire purchase or loan agreement, from a financing company. (4) The CENVAT credit in respect of capital goods shall not be allowed in respect of that part of the value of capital goods which represents the amount of duty on such capital goods, which the manufacturer or provider of output service claims as depreciation under section 32 of the Income-tax Act, 1961 (43 of 1961). (5) ................... 5.5.2 From the provisions as stated above it is quite evident that CENVAT Credit on the Capital Goods can be availed only if the same are received in the factory of manufacturer of final product and is used the factory of manufacture. In the present case when the goods have not been received by the manufacturer in his factory the credit would not be admissible to him. 5.5.3 Appellants have relying on various case laws specifically in case of JSW Steel [2014 (307) ELT 929 (T)] ar....
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....L and M/s. JSWPL are all one and the same; (d) Ownership of the land or capital goods is not relevant to decide the eligibility of capital goods credit; (e) Without prejudice, no demand of excise duty can once again be made; and (f) Subsequent event should also be taken into account to decide the eligibility of the CENVAT credit" In para 32 and 33 distinguishing the facts of that case from the case of Majestic Auto, it has been recorded "32. The case law relied upon by the learned JCDR in the case of M/s. Majestic Auto Ltd. (supra) is also not relevant to the facts of this case. As in that case, M/s. Hero Briggs & Stratton Auto Pvt. Ltd., had taken on lease a part of the factory premises of M/s. Majestic Auto Ltd., who have also sold the machines and equipments on which they have availed MODVAT credit and M/s. Majestic Auto Ltd., have got manufactured the parts on job work basis from M/s. Hero Briggs & Stratton Auto Pvt. Ltd. In this case, the facts are that a part of the land has been leased out to M/s. JSWPL for installation of 'CPP' which is being used by the appellants for manufacturing of their final products. There is no contract between....
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....ther strengthen by the fact that invoices were made stating "M/s. JSWPL, Consignee of M/s. SISCOL", which clearly showed that the goods were procured by M/s SISCOL, but were consigned in the name of M/s JSWPL. These facts clearly distinguish the case in hand from the case under consideration by the tribunal in case of M/s JSWPL. 5.5.4 Counsel for appellants in his written submissions in respect of the decision of Majestic Auto Limited [[1999 (107) ELT 133 (T)] mentioned wrongly should have been [2004 (173) ELT 145 (T-Del) relied upon by the Commissioner in para 6.14.02 has been over ruled by the Allahabad High Court. Para 6.14.02 of the impugned order is reproduced below: "6.14.02 Where any premises in which the capital goods are installed has been leased out to another company, say "X" by "Y company, who are now in possession of the said premises, it cannot be claimed by "Y" company that the capital good are used in their factory. The capital goods are no more installed in the factory of the "Y". In this regard I place reliance on the decision of the Hon'ble Tribunal in the case of Majestic Auto Ltd vs CCE Ghaziabad reported in 2004 (173) ELT 145 (tri-Del)], wherein it....
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.... Hero Motors [2014 (310) ELT 729 (ALL)] stated as follows: 22. In the present case we find substance in the contention of Shri Bharat Ji Agarwal that at the time of obtaining registration HBSA Pvt. Ltd. had submitted a ground lay out plan, which was approved by the Superintendent, Customs and Central Excise, Range- 6, Division-III, Ghaziabad on 21-8-1998 and in which the engine assembly on ground floor in the premises of Majestic Auto Limited was clearly demarcated. The plant and machinery was installed and was never removed from the premises. The I.C. Engines manufactured by HBSA Pvt. Ltd. in the same premises were used by the appellant. Once it was admitted that the capital goods, on which Modvat Credit was taken by the appellant remained installed in the same premises, which was leased out and continued to be engaged in the manufacture of I.C. Engine, which was further used in the manufacture of two wheelers and that a separate registration certificate was obtained by HBSA Pvt. Ltd., there was no removal of goods. The capital goods remained installed in the same premises and thus even if the premises were transferred on lease, the capital goods even if they were deemed ....
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....(236) ELT 240 (Kar) to be squarely applicable in the present case. Relevant excerpts from these decisions are reproduced below: Associated Cement Limited [209 (236) ELT 240 (Kar) "5. Having heard the learned counsel for the parties and on perusal of the agreement dated 14-3-1999 entered into between the assessee and M/s. Tata Electric Company we have no hesitation to hold that the transaction thereunder between them was an absolute sale of the power unit for a valid sale consideration of Rs. 90 crores and that the entire unit came to be handed over to the purchaser and since then the purchaser has been running the power unit at the same premises of the assessee by taking the premises in which the power unit was installed on long term lease and generating the power. Therefore, it is clear that the said purchaser, after purchasing the power unit from the assessee, has been enjoying the same as its absolute owner and has been supplying to the assessee the power generated from the said power unit on payment basis. This being so it is quite evident that the assessee-company lost its ownership and also control over the said power unit by selling it to the said purchaser for v....
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....he Rules for availing credit of the MODVAT had not been complied with. To avail the MODVAT credit, the input on which excise duty is paid must be used in the manufacture of the final product in the factory of the assessee. ....." 5.5.8 We also do not find merits in the submissions of the appellant that subsequently 2nd Party and Appellants were merged with effect from 1.02.2007. It is now settled law that admissibility of CENVAT Credit is to be determined at the time when the Capital Goods were received by the appellant and subsequent events and restructuring or changes in law cannot change the admissibility of credit. In case Spenta International [2007 (216) ELT 9Tri-LB)] it has been held "7. In the case of Binani Cement Ltd. v. CCE, 2002 (143) E.L.T. 577, the Tribunal held that vested right of taking credit arises on the date of receipt of the goods and that the date of installation of capital goods being only a deferred date of taking credit, for administrative reasons, credit is eligible on the date of receipt of the goods. In CCE v. Sengunthar Spinning Mills, 1998 (99) E.L.T. 409, it was held that the availability of Modvat credit on capital goods has to be determi....
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....AT Credit Rules, 2004. 5.5.7 Further appellants have submitted that credit of Rs. 1,70, 55,003/- has been denied to them in respect of the Capital Goods received in their premises after the merger of Appellants and 2nd Party with effect from 01.02.2007. We find force in the arguments of the appellant that after merger both the entities have become one and the credit cannot be denied on the ground that they were distinct earlier at time of placement of order. After merger the goods received were received by the appellants only in their premises and used by them. Hence we have to set aside the order dated 21.08.208 and remand the matter back to Commissioner for determination of CENVAT Credit to be disallowed after merger of the two entities. 5.6 Whether CENVAT Credit in respect of those goods which are not identifiable but classified under Chapter 84 of First Schedule to Central Excise Tariff Act, 1985. 5.6.1 The next issue is with regards the admissibility of credit in respect of supporting structures used for installation of boiler etc, bunkers for storage of coal, ash handling system, system and other miscellaneous goods. 5.6.2 We are in agreement with the submissions ....
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....nnot be alleged that the Noticee No 1, has suppressed the facts with intent to evade payment of duty and hence the proposal to deny the credit for the period beyond one year prior to show cause notice is not sustainable. "08.02. I do not find merits in the argument of the Noticee No.1. After introduction of 'self assessment scheme' in Central Excise, there is no need to submit invoices pertaining to clearance of final products and purchase of capital goods, inputs. No description of goods purchased by the assessee is reflected in the prescribed ER1 returns. Only the figures of duty paid and Cenvat credit taken are reflected in the returns. The responsibility of assessing the correct duty liability on the clearance of final products and taking of credit on eligible goods lies only with the assessee. It is specifically provided in Rule 9 Cenvat Credit Rules 2004 that the assessee should take reasonable steps to take eligible credit with proper documents. The contention of Noticee No.1 is that "the notices were under the bona fide belief that the items in question were covered under the definition of capital goods since they have been used in the factory of the notice even th....
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....of the invoices is reproduced below which show the quantum of layering in built therein to hide the real transaction. • The first invoice is issued showing consignee as "M/s Indo Rama Synthetics Ltd, A-31 MIDC Industrial Area Butibori Nagpur, A/c M/s Indo Rama Petrochemicals Ltd., A/c M/s Indure Pvt Ltd Sahibabad, A/c M/s Chethar Vessels Pvt Ltd Trichy."; and • The second invoice is showing consignee as "M/s Indo Rama Synthetics (I) Ltd. A-31 MIDC Industrial Area Butibori Nagpur Maharashtra, A/c M/s Indo Rama Petrochemicals Ltd." and buyer is shown as "M/s Indure Pvt Ltd, M/s Indo Rama Synthetics (I) Ltd. A-31 MIDC Industrial Area Butibori Nagpur Maharashtra." The invoice itself speaks volume as to why the identity of actual purchaser and user of the said goods have been layered so as to make identification difficult. 5.8.3 In our view the charge of suppression, misstatement etc. with the intent to evade payment of duty/ take inadmissible credit is well established against the appellants. 5.8.4 Since we find that appellants have availed the inadmissible credit by suppressing the relevant and complete information from the department we also uphold ....
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....OL BOARD 10437 2:024068 ms at: http://mpcb.mah.nic.in Ted: [email protected] [email protected] ЗÐÐœÐДÐВИТЬ 28- KALPATARU POR T. 3" & 4° Floor. Opp. Cineplanet. Nen. Sion Circle Sion East, MUMBAI 400 022 No. BO/Nagpur/Amnd/TB/B-1986 ICC-2-19 DATE :20- 1-4-2005- Amendment in the Consent Sub: Amendment in Consent to Establish granted to M/s. Indo Rama Synthetics (I) Ltd., Plot No. A-31, MIDC Industrial Area, Butibori, Dist- Nagpur: Ref: 1. Board Consent No. BO/Nagpur-79/E/CC-138, dated 7/10/2004. 2. Your letter dated 24/2/2005. Consequent upon change in name of the company from M/s. Indo Rama Synthetics (1) Ltd., Plot No. A-31, MIDC Industrial Area, Butibori, Dist- Nagpur original consent to establish granted under u/s 25 of the Water (Prevention and Control of Pollution) Act, 1974, under section 21 of Air (Prevention and Control of Pollution) Act, 1981 and Hazardous Wastes (Management and Handling) Rules, 1989 and Amendment Rule 2003 to M/s. Indo Rama Petrochemicals Ltd., vide reference (1) & (2) above is hereby amended and the name and addresses of the Industry shall be rea....
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...., Maharashtra Pollution Control Board, 5th Floor, Udyog Bhavan, Civil Lines, Nagpur. è´· Date: 07-04-2006 Sub.: Application for Grant of Consent to Operate of 2 x 15 MW Captive Co-generation Thermal Power Plant (CCTPP). Dear Sir, We are in the process of setting-up of 2 x 15 MW Captive Co-generation Thermal Power Plant (CCTPP) at Plot No. A-31, MIDC - Butibori, Dist.- Nagpur. MPCB Consent to Establish and Environment Clearance from Environment Department, Govt. of Maharashtra are already granted and copy of the same are enclosed. The generated electricity will be supplied to our sister concern Indo Rama Synthetics (I) Ltd. located adjacent to our Plant for the power requirements of their existing set-up and expansion project comprising polyester plants namely CP-4 & CP-5 (Polyester Staple Fibre 12000 MT/month, Polyester Partially Oriented Yarn @ 12450 MT/month & Polyester Chips @ 1950MT/month) which will have major power consumption from our CCTPP. The generated power will also cater the auxiliary consumption of our CCTPP. Also generated effluent from our CCTPP will be treated and disposed to our....
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....Fax numbers, e-mail of the Applicant Occupier/Industry/Institution / Local Body. 2. (a)- Name and location of the industrial unit/premises for which the application is made (Give revenue Survey Number/Plot number name of Taluka and District, also telephone and fax number) (b) Details of the planning permission obtained from the local body/Town and Country Planning authority/Metropolitan Development authority/ designated Authority. (c) Name of the local body under whose jurisdiction the unit is located and Name of the licence issuing authority Names, addresses with Telephone and Fax Number of Managing Director/Managing Partner and officer responsible for matters connected with pollution control and/or Hazardous waste disposal Shri. Somen Das, Sr. Vice President M/s. Indo Rama Petrochemicals Ltd.. 4 Floor. Dr. Gopaldas Bhawan 28, Barakhamba Road, NEW DELHI-110 001. Ph. No. 011-23351101, Fax. 011-23326827 M/s. Indo Rama Petrochemicals Ltd., Plot No A-31, MIDC Butibori. Dist. - Nagpur. Ph. No. 07104-265165, 265307 Fax. 07104-265305 MIDC - Butibori MIDC - Butibori (under Executive Magistra....
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....ETROCHEMICALS LIMITED Ref. No.: IRPL/CPP/1008 To, The Deputy Secretary, Environment Department, Mantralaya, New Administrative Building, 15th Floor, Madam Cama Road, MUMBAI - 400 032. Date 15-06-2005 112 Sub.: Environmental Clearance for Proposed Captive Co-generation Thermal Power Plant (30 MW) located at Butibori, Nagpur. Ref Our letter No. IRPL/2005-06/0101 Dtd. 30-04-2005 alongwith Application for Environment Clearance and REIA Report submitted on 04-05-2005. Respected Sir, We have submitted application for Environmental Clearance and Rapid EIA report for our proposed Captive Co-generation Thermal Power Plant (CCTPP) of 30 MW capacity alongwith letter under reference. In continuation to the discussion of our representative regarding the capacity of our proposed CCTPP, we wish to submit that the total electric power generation capacity of the proposed CCTPP will be 30 MW which will comprise of two turbine sets each of 15 MW capacity. The proposed CCTPP will generate 30 MW per hour electric power amounting to 720 MWH per day electric power (30 MWH x 24 hours = 720 MWH per day). The proposed CCTPP will cater t....
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....months. Interest Commission Security Floating Rate: Special Terms & Conditions Put/Call Option: I'ost Dated Cheque Yes Bank Prime from Indo Rama Lending Rale (PLR) Petrochemicals Limited N.A. minus 3.40% p.a. for Principal And prevalent from time to Interest. time. The Current Yes Bank Prime Lending Rate is at 13.00 % p.a. The effective rate is 9.60 %. per. annum. Reset: Daily floating. Processing Fees- 0.65% of facility amount plus service lax, payable upfront on acceptance of the facility letter. Documentation Charges: INR 60,000/- (Indian Rupee Sixty thousand only) Fjade 1 Peper Page 1 of 3 ì—¬ Northern Regional Corporate Office: YES BANK Limited, 48, Nyaya Marg, furakyapar. How is Authorise Tel: 1910 5556 9000 . Regd. & Corporate Office: Nehru Centre, 9th Floor, Discovery of India, Dr. A P. Road, Would Mounds to Tel: +91(22) 6669 9000/2490 0650 Fax: +91(22) 2490 031-1 Website ' ! Document 10 3 2 YES BAN Note: This facility is in addition to Medium Term Loan of INR 150 million facility advised vide advised vide Ref. YBI/MUM/FI/13/2006-07 dated Ju....
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....under the common seal, on the requisite stamp as prescribed under the prevailing Stamp Act Post Dated Cheques for repayment of Principal and Interest. For Indo Fama Pele bgnicdanië Page 2 of 3 29/1/87 Any horised Simple 1. Document 11 4 YES BAN i. Such other documents as we may reasonably consider to be relevant. Covenants: You hereby covenant that so long as the Facilities or any sum thereunder are outstanding, you shall:- (i) from time to time keep lender informed in writing of any delays in implementation and commencement of commercial production of projects. The Facility Letter shall remain valid and, save for the aforesaid amendments, unchanged. This Amendment Facility Letter shall form an integral part of the addendum to Facility Letter YBL/MUM/FL/13/2006-07 dated June 25, 2006. This offer shall be valid for acceptance until November 15, 2006. Kindly confirm to us, by signing on the duplicate copy of this letter, your acceptance of the foregoing terms and conditions and return the same to us so as to be received by us prior to the above date. Should you have any query regarding the above terms and conditio....
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....if avaled of in Indian Rupee is proposed to be chdrged at 2.5% below our SBAR minimum 7.75% p.a. with monthly rests or 250 basis points spread over applicable Libor, in case the loan is availed of as an FCNR facility. Any other condition normally those stipulated in such borrowings. Keeping in view the standing of the company and the excellent relationship we enjoy, we do not see much problem in getting aforementioned approved but a formal decision/clearance, in this regard, can take between 8-10 clays' time. Yours faithfully. RELATIONSHIP MANAGER - II Alisted 79/01/2017 Document 13 to Bank of India ercial Branch, Road, Near G.P.O., INDORE (M.P.) LNO AMT/11/55 The Managing Director, Indo Rama Petrochemicals Lid., Kird Attn:- Mr. Debdutta Chotuje. 07 May 2005 Dr.Gopaldas Bhawan, 28, Barakhar ba Road, New Delhi. Dear Sir, Kind Attn: Mr. Subhash Katyal SANCTION OF CREDIT FACILITIES 1 With referer ce to the above, we are pleased to advise that Indo Rama Petrochemicals Limited has been sanctioned the following credit facilities by LIMITS Sanctioned Fund based 1. Working Capital Cash Cred....
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....debt draw down as per the debt equity ratio. III. Amendment if any, to the PPA to be signed to the satisfaction of SBI iv. An undertaking from the Company that the Fuel Transport arrangements would be made to the sallsfactior of SBI. v. RPL will obtain all the temaining statutory/ non-statutory clearances for the project to be obtained before and after construction. vi. IRPL will enter into an Escrow Agreement with the buyers (IPSIL and IRTL) and open a Bank Account on terms satisfactory to SBI. vil. IRPL will also maintain a Debt. Service Reserve Account having sufficient balance to cover term loan instalments due within next 2 quarte's at every 'point of time in the form of Term Deposit vili. Demichstrate the fulfillinent by all the SBI acting parties of all the soniree', the fuel supply conditions precedent in the PPA, the FRC agreement, the escrow agreement test rale deed agreement, the financing agreements and any other contest, and greements deemed esser tial by the Bank. any pre-payment of loans by the company, will be on such be agreed to by SBI and no premium shall be payable if mentils effected at the....
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....d charge over entire current assets of the company situated at Butibori. Documents The following documents will be obtained: Agreement of loan for the overall limit (C-1) Agreement of Hypothecation of goods and assets the overall limit (C-2) Leller regarding the grant of individual limits within the overall limit (3-5) Letter of undertaking not to create further charge. Letter of indemnity for walver of Insurance. Inspection At half yearly intervals by officials of the Bank and/or any person authorised by the Bank The cost of such inspections will be bourje by the company. Insurance The Company's assets offered as security for the loan should be kept fully fed against fire and such other asks as may be required by the Bark and the policies retained by the Company. however, a copy of this policy should be submitted to the Bank list of the current instrance policies should be submited to the Bene detailing therein the names and addresses of the insurer parties of goods covered type of cover amount of cover and ga mach policy Document 16 INDO RAMA PETROCHEMICALS LIMITED SCHEDULES FORMING PART OF BALANCE SHEET AS....
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....89 20,670 Document 17 INDO RAMA PETROCHEMICALS LIMITED SCHEDULE 6: NOTES ON ACCOUNTS SIGNIFICANT ACCOUNTING POLICIES 1. a) Basis of Accounting b) The Accounts of the Company are prepared under the historical cost convention and in accordance with the applicable accounting standards, except where otherwise stated. For recognition of income and expenditure, mercantile system of accounting is followed. Expenditure During Construction Period Expenditure incurred during construction period on Projects is carried forward under Pre-operative expenses pending allocation / capitalization and is allocated to Fixed Assets on the completion / commissioning of the Projects. c) Foreign Exchange Transactions. d) e) 2) 3) Transactions in foreign currency are recorded at the rates prevailing on the date of transaction. Outstanding foreign currency assets and liabilities are translated at the exchange rate prevailing at the year end. Borrowing Cost Interest and other cost in connection with the borrowing of the funds to the extent related/ attributed to the acquisition / construction of qualifying fixed assets are ....
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....nder construction, site development expenses, plant & machinery under erection, etc. In the opinion of the Management, the net realizable value of current assets, loans & advances shall be at least equal to the value stated in accounts. 12) Balance of certain Loans & Advances and Sundry Creditors are subject to confirmation. 13) 141 14) 15) During the year paid up capital of the company has been increased on allotment of 224.5 lacs equity shares of Rs 10 each on 28.03.06 for which, as per the explanation given by the management, they are in process of compliance of requirements of section 269 and 383A of Companies Act, 1956. The activities of construction /erection of 30 MW (2*15 MW) Thermal Power Plant at Butibori is being carried out on the leasehold land allotted to IRSL by MIDC. The application of sublease in favour of the company has been filed with Maharashtra Industrial Development Corporation (MIDC). Sundry Creditors includes Rs Nil (Previous Year Nil) payable to small-scale Industrial undertakings. Document 18 Indo Rama Petrochemicals Ltd. Thermal Power Project Profitability Statement Particulars Income....
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....ion 1,283 1,283 1,283 1,288 1,293 1,298 1,308 -24 88 151 Net Fixed Assets 215 279 343 407 93 669 Current Assets 1,258 1,195 1,132 1,073 1,014 955 901 Cash 110 120 120 120 120 120 120 83 Total Applications 70 190 276 304 341 381 93 669 1,452 1,385 1,442 1,469 1,438 1,416 1,401 11 Document 20 3224 SLIMITED CONSIGNEE: INDORAMA SYNTHETICS (1) LTD A-11, MIDC INDL EASTATE, BUTIBORI, NAGPUR A/CINORAMA PETROCHEN LTD A/CTRE INUURE PVT LTD, SAHIHABAD, UP BUYER: CATHAR VESSELS PVT LTD, TRICKY 62006 KSBb. Constr DUPLICATE FOR TRANSPORTER IDC No.: THOMA SYNTHETICS (1) LTD A-31,WIDC INDL ESTATES, BUTIBORI, NAGPUR A/C: INDO RANA PETROCHEM LTD A/C THE INCURE PVT LTD, SAHIBABAD (UP) A/C:CETHAR VESSELS PVT LTD 441122 ECC.NO: AAACI 530L TIN.M): CUS. No: 13% CENTRAL EXCISE INVOICE laveice No.: 24020 Invoice DATE: 14-MAR-2006 RULE 11 8 10 12. & 22 OF GE RULES! 21434328558 53071 Wo. No. : Ind No.: 05050823 $128552191 St Code: 169 DI No.: 47648 ....