TaxTMI 
TaxTMI 
2020 (12) TMI 633
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....ivate Limited, Indore [the respondent] to assail the order dated September 12, 2018 passed by the Additional Commissioner has been allowed and of the order passed by the Additional Commissioner has been set aside. 2. The period of dispute in the present appeal is from April 2016 to June 2017. The show cause notice was issued on April 3, 2018. 3. The respondent is engaged in manufacture of welding electrodes, saw flux, saw wire, filler wire and carbon dioxide wire along with flux cored wire, ever since its inception. With effect from October 1, 2012, a portion of the factory of the respondent was leased to D&H Secheron Electrodes (Pvt.) Ltd. [Unit 2], whereby certain manufacturing facilities for manufacture of welding electrodes, saw f....
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....nit-2 was fully finished goods which were cleared as such by the respondent to its customers. 6. It transpires that a show cause notice dated July 7, 2016 was earlier issued to the respondent for the previous period from October 2012 to March 2016 seeking to recover CENVAT credit with interest from the respondent on the ground that the invoiced goods were finished goods on which no process was undertaken by the respondent in its factory and thus the said goods were merely traded by respondent. The show cause notice also proposed to impose penalty on the respondent, Unit-2 and M.D. Khatri, Managing Director of Unit-2. After considering the reply filed both by the respondent and Unit-2, the Principal Commissioner, Central Excise, Indore by....
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....rent from the record with no apparent objection of the Department that these finished products were being cleared by Appellant No.1 after payment of the excise duty. It is also apparent from the agreement between both the appellants that irrespective plant & machinery licenses and brand-name qua the impugned products were allowed to be used by Appellant No.2 but the products manufactured by Appellant No.2 were still allowed to be marketed by Appellant No.1 only under its own brand-name and it was Appellant No.1 from whom the Department was collecting the duty on the finished products. It is also apparent from the record that during the period of dispute Appellant No.1 has paid a total duty of Rs. 2,20,67,060/-. 9. The said entire a....
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....e is not that of the manufacture as was appreciated by the Hon'ble Apex Court in Creative Enterprises (Supra) case. The Hon'ble Apex Court in this case has mentioned that even if the activity done by the assessee is not of the manufacture, if the duty paid is accepted by the Department and the same is more than the credit availed, in such case, the assessee is not required to reverse the credit availed by them. The situation stands clarified by the Departments' own Circular No.911/01/2010 - CX dated 14.01.2010. In the present case, the Cenvat Credit availed is Rs. 2,05,59,139/- against the Central Excise duty of Rs. 2,20,67,060/- on the goods cleared by the Appellant No.1. The duty paid stands more than the credit availed. Seen from this an....
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....018 in this appeal for the subsequent period April 2016 to June 2017 contains allegations that are identical to those contained in the previous show cause notice dated June 7, 2016 issued for the period October 2012 to March 2016. After considering the replies filed by the respondent, including Unit-2 and M.D. Khatri, the Additional Commissioner by order dated September 10, 2018 confirmed the denial of CENVAT credit amounting to Rs. 76,74,458/- against the respondent with interest and also imposed penalty of Rs. 38,50,000/- upon the respondent. Further, penalty of Rs. 12,00,000/- and Rs. 6,00,000/- were also imposed upon Unit-2 and M.D. Khatri, respectively. 8. However, the Commissioner (Appeals) by order dated December 12, 2018, after n....