TaxTMI 
TaxTMI 
2022 (7) TMI 572
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....d no further demand/recovery is required to be made. B. I order for recovery of interest of Rs.7,38,856/- (Rupees Seven lakhs thirty eight thousand eight hundred fifty six only) under rule 14 of the CCR, 2004 read with the then section 11AB of the CEA, 1944. C. Since there is no misfeasance on the part of the assessee, the proposal for imposition of penalty under rule 15(1) of CCR, 2004/r/w rule 25 of CER, 2002 is not sustainable and, therefore, I do not impose any penalty." 2.1 Appellant is engaged in the manufacture of excisable goods falling under chapter sub heading no. 8504.00 of the First Schedule of the Central Excise Tariff Act, 1985 viz. Transformers. The assessee is also availing facility of CENVAT credit. 2.2 The appellant had received in their factory excisable goods i.e. transformers along with accessories for repair/rectification without original duty paying documents from their customers. The appellant had filed an intimation with the Range officer about the receipt of the said goods into their factory for repairs. Subsequently, the appellant availed Cenvat credit in their Cenvat account in respect of transformers into their factory on the str....
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....mmr/KDN/M III/2010 dated 02.06.2011 50,68,403 5 V.Adj(SCN)15-63/JC/KDN/M-III/2010 dated 14.02.2011 29,75,948 6 V.Adj(SCN)15-80/JC/KDN/M-111/2010 dated 23.06.2011 35,18,480 TOTAL 2,96,06,162 By the six show cause notices detailed above appellant was called to show cause as to why: a. Cenvat Credit availed of by them totally amounting to Rs. 2,96,06,162/- should not be demanded and recovered from them under the provisions of Rule 14 of Cenvat Credit Rule, 2004 read with Section 11A(1) of Central Excise Act, 1944. b. The credit totally amounting to Rs. 2,96,06,162/- reversed at the time of clearance of transformers should not be appropriated towards said demand. c. Penalty should not be imposed on them under Rule 15(1) of Cenvat Credit Rules, 2004 read with Rule 25 of the Central Excise Rules, 2002. d. Interest totaling Rs.7,38,856/- on delayed payment of duty/reversal of Cenvat credit should not be demanded and recovered from them under the provision Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Act, 1944. 2.4 All the six show cause notices have been adjudicated by the Commi....
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....pe and ambit of the allegations made in the said show cause notices and on this ground alone, the said confirmation of the demand of duty and appropriation is liable to be quashed and set aside. i. Hitesh Plastic Pvt. Ltd. [2009 (243) ELT 419] ii. Jindal Photo Ltd. [2009 (247) ELT 730] iii. Shah Pumps Pvt. Ltd [2006 (205) ELT 489] 3.3 Arguing for the revenue learned authorized representative submits:- • In the subject case the triplicate copies (in original) of the invoices in question were produced by the Appellants after the personal hearing and the same were found to be in order inasmuch as they co-relate with the Cenvat credits taken and the transformers initially cleared and removed after repairs as mentioned in the show-cause notices. • In such cases ascertaining that the goods were initially cleared on payment of appropriate duty would require co- relation of the identification marks on the goods and associated records maintained by the Appellants vis-à-vis the duty payment particulars in the account current or Cenvat credit register. It needs emphasis that receiving the goods back into the factory does not requi....
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....as in the impugned order recorded the findings as follows: "9. I have carefully gone through the allegations levelled in the show-cause notices and the written and oral submissions of the assessee. The triplicate copies (in original) of the invoices in question were produced by the assessee after the personal hearing and the same are found to be in order inasmuch as they co-relate with the Cenvat credits taken and the transformers initially cleared and removed after repairs as mentioned in the show-cause notices. As mentioned earlier, two show cause notices dated 14.02.2011 and 23.06.2011 involving similar facts have been made answerable to the Joint Commissioner and the assessee has requested that these may be taken up together for adjudication with the notices answerable to the Commissioner. I find substance in this proposal which also goes in sync with the instructions contained in paragraph 6 of the Board's Circular no. 752/68/2003-CX dated 01.10.2003 and hence agree to the request made of clubbing these notices in common adjudication proceedings. 10. Coming to the issue involved, it is the allegation that the assessee after receiving the Transformers in t....
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.... sub-rule mentions about taking of Cenvat Credit on these goods and utilization thereof "as if such goods are received as inputs" under the Cenvat Credit Rules. This would mean that the rule pre-supposes that the returned goods are akin 10 "inputs" as defined in rule 2(k) of the CCR, 2004 and the assessee is entitled to take Cenvat Credit of the duty initially paid on the said goods. Obviously, the goods may be received back in the factory under the cover of a duty paying document viz. invoice which would indicate the duty initially paid by the manufacturer and which duty can be taken as Cenvat credit. Invoice, whether original, duplicate or triplicate would be of no relevance as long as it is proved with co-relating documents/entries that the same goods were cleared on payment of appropriate duty earlier. 11.3 The second sub-rule mentions that if the process that the manufacturer undertakes on the goods received does not amount to manufacture, he should pay an amount equal to the Cenvat Credit taken and in any other case (i.e., where the process amounts to manufacture) he should pay appropriate central excise duty on the goods. The Explanation appended clarifies that the ....
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.... "Subject: Credit of duty under rule T6 of Central Excise Rules, 2002 on goods brought into the factory -- reg. 2. The matter has been examined. The Rule 8(2) of the Central Excise Rules, 2002 provides that "the duty of excise shall be deemed to have been paid for the purposes of these rules on the excisable goods removed in the manner provided under sub-rule (1) and the credit of such duty is allowed, as provided by or under any rule. This provision explains that the invoice of the returned goods, which would be a valid document for availing credit and duty is deemed to have been discharged. Regarding availing credit on its own invoice, rule 16(1) of the Central Excise Rules, 2002 allows the assessee to do so. In any case, the whole procedure is revenue neutral, in the sense as the duty has to be discharged by the 5th of next month. 3. In view of the above, it is clarified that credit on rejected/returned goods, received in the factory before prescribed date for duty payment, can be allowed to be taken under rule 16(1) of the Central Excise Rules, 2002." 13.2. The aforesaid letter has been issued in a different context viz, rule 8 of the ....
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.... the rule 16 does not lay down any "period" within which the goods received should be removed from the factory after conducting the process of refining, repair, re-making etc.. But it is an admitted fact that once credit has been taken for the goods originally cleared on payment of duties, these become non-duty paid, and in such a situation, this is a clear case of retaining the benefit of duty already paid, and thus till clearance of the goods after repairs, the goods shall be treated as non duty paid and interest is warranted for the period of retention of benefit. The Hon'ble Supreme Court in the case of SKF India Ltd. [2009(239)ELT 385(SC)] has held that interest is payable for delay in payment of revenue on any count. Therefore, I find that the assessee is liable for payment of interest u/s 11AB of the CEA, 1944 for the delayed reversal of the credit taken and as mentioned in the show-cause notices. 16. The assessee having reversed/paid the amounts equal to the CENVAT credit taken under sub-rule (1) of rule 16 of CER, 200 goods were removed after repairs, there cannot be any misfeasance on their part. In such an eventuality, it cannot be said that there has been a....
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....er as he proceeded to confirm the demand made against the appellant in terms of Rule 14 of CENVAT Credit Rule, 2004 read with Section 11A of Central Excise Act, 1944. After confirming the demand Commissioner proceeded the amount debited/ paid by the appellant in terms of sub-rule (2) to Rule 16 of Central Excise Rules, 2002. The amounts so paid by the Appellant in terms of Rule 16 (2) were undisputedly paid by the appellant at the time of removal of goods from their factory and there is no delay in making the payment from the due date. 4.6 By protracted and convoluted argument as per para 15 of the impugned order, Commissioner has confirmed the demand for interest. In the present case there is no delay in payments that were required to be made as per rule 16 (2), and if there was no delay in making the payments of the amount due, the demand for interest cannot be sustained for what so ever reason. The reliance placed by the Commissioner on the decision of Hon'ble Apex Court in case of SKF is totally misplaced as in that case Hon'ble Apex Court confirmed the demand for interest on the duty paid subsequent to clearance of the goods on the basis of supplementary invoices issued. Re....