TaxTMI 
TaxTMI 
2021 (8) TMI 1144
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....ding reversal of cenvat credit on inputs used for the output goods supplied to BHEL, under their job work order, which were destined to be used in the mega power project of Damodar Valley Corporation. 3. The brief facts of the case are that the Appellant is a Company incorporated under the erstwhile Companies Act, 1956, having its registered office and factory situated at D-12, Site-I, Panki Industrial Estate, Kanpur. Appellant is engaged in the business of manufacture and sale of Rotor, Starter and Column Component, container bin, etc., falling under CH 85119000, 72163200 and 94032010 respectively of the Central Excise Tariff Act, 1985. 4. Further, during the year 2007, appellant entered into Rate Contracts with M/s Bharat Heavy Electricals Limited., Boiler Auxilliary Plant, Ranipet (hereinafter referred to as BHEL), a public sector undertaking of the Central Government, for fabrication and supply of various Iron and Steel Products. 5. Further, the Rate Contracts were placed by BHEL, in the capacity of 'International Bidder' for Damodar Valley Corporation, Mega Power Project. The relevant clauses of contract regarding excise duty/cenvat are reproduced hereunder:- ....
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....rted on inputs- as such b) Dec 2008: Duty reverted due to Column Despatch c) Jan 2009: Duty reverted due to column despatch - Inputs cleared as such' while filing ER-1 returns of related months. 9. However on seeking legal advice subsequently, Appellant came to know that, since the goods cleared for BHEL were eligible for exemption under Serial No. 91 of Notification No. 6/2006-CE dated 1.3.2006, as amended, 'as goods supplied against International Competitive Bidding', hence in view of Rule 6 (6) of Cenvat Credit Rules, 2004 (hereinafter referred to as 'CCR'), Rule 6(1) will not be applicable and therefore there was no requirement for the Appellant to reverse cenvat credit. The same opinion was expressed by BHEL also vide letter dated 14.9.2009. 10. Accordingly, Appellant vide letter dated 5.10.2009 informed Ld. Assistant Commissioner and Ld. Superintendent, the circumstances in which cenvat credit of Rs. 18,86,138/- was reversed and also informed that Appellant is taking credit of the same amount in RG-23A Part II. Along with the letter, Appellant also submitted the details of credit taken earlier and reversed wrongly. Upon receipt of letter dated 5.10.200....
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....ct). 16. The aforesaid show cause notice was duly replied by Appellant, wherein amongst other objections, it was submitted that inputs were not removed as such, but were used for final products cleared to BHEL. 17. That even though Appellant had already filed its reply and requested for personal hearing, then also adjudicating authority proceeded to adjudicate the SCN ex-parte, after framing the following issue:- "Whether the suo-moto Cenvat Credit taken by the party without any document is admissible to them or not" 18. After framing the aforesaid issue, the adjudicating authority held that since the inputs were removed as such, hence in terms of Rule 3 (4) (b) of CCR, cenvat credit was rightly reversed by Appellant and subsequently suo-moto credit of the same cannot be taken. 19. The aforesaid Order-in-Original dated 24.1.2011 was then challenged by Appellant in statutory appeal before Ld. Commissioner (Appeals), who dismissed the appeal vide Order-in-Appeal No. 222-CE/APPL/KNP/2011 dated 28.9.2011, by affirming the findings recorded in Order-in-Original. 20. The aforesaid Order-in-Appeal was then challenged by Appellant before this Tribunal in Appeal No. ....
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....he Appellant by holding that since the inputs were removed as such, hence CENVAT Credit was rightly reversed by the Appellant and consequently taking Suo-moto credit of the same is illegal. The adjudicating authority has also held that CENVAT Credit can be taken only on the strength of documents prescribed under Rule 9(1), and the Appellant has taken Suo-moto credit, without any documents or authority. Refund claim was also rejected on the ground that Cenvat Credit was wrongly taken. 24. The aforesaid order(s)-in-original dated 2.2.2019 & 15.03.2019 was then challenged by the Appellant on various grounds before Ld. Commissioner (Appeals). During the course of hearing, Appellant was directed to file the sample copies of contract between Appellant and BHEL, sample copies of invoices, ER-1 returns, invoices and correspondence with BHEL, which were filed by Appellant before Ld. Commissioner (Appeals) on 16.7.25019. 25. However, by impugned Order-in-Appeal dated 3.10.2019, the appeals filed by Appellant have been dismissed and the order-in-original dated 2.2.2019 along with demand and recovery of cenvat credit, interest and penalty has been affirmed, on the reasoning that the clai....
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....ed, through BHEL. Further, dispute in this respect is hit by doctrine of Res-Judicata. 30. Now, sub-rule (1) of Rule 6 of cenvat credit rules, 2004 prohibits availability of cenvat credit on such quantity of input which is used in or in relation to the manufacture of exempted goods. However, sub-rule (6) of Rule 6 carves an exception to the applicability of Rule 6(1) and it provides that sub-rule (1) shall not be applicable in case the excisable goods are removed without payment of duty are covered by various clauses of sub-rule (6). Clause (vii) of sub-rule (6) covers all goods which are exempt from the duties of customs leviable under the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and the additional duty leviable under sub-section (1) of section 3 of the said Customs Tariff Act, when imported into India and are supplied against International Competitive Bidding. 31. Therefore, when the condition specified under in clause (vii) of sub-rule (6) of Rule 6 is identical to condition no. 19 of Notification No. 6/2006-CE dated 1.03.2006 and the order dated 13th September, 2010, entitling the appellant to benefit of exemption notification has attained finality, the....