TaxTMI 
TaxTMI 
2023 (5) TMI 430
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....+ SHE Cess Rs.69.415/- under provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944. ii) I order recovery of interest at appropriate rate under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11 AB of the Central Excise Act, 1944 (presently Section 11AA of Central Excise Act, 1944, w.e.f. 08.04.2011); and iii I impose penalty equal to the duty amount of Rs. 71,49,505/- (Rs. Seventy One Lakhs Forty Nine Thousand Five Hundred and Five only) under the provisions of Rule 15 of Cenvat Credit Rules 2004 read with Section 11AC of the Central Excise Act, 1944." 2.1 Appellant is engaged in manufacture of excisable goods viz. chassis frame assembly and pipes and tubes falling under sub-heading 87089900 and 73069011 of the First Schedule to the Central Excise Tariff Act. Appellant is availing Cenvat credit on various inputs used in manufacture of the said finished products. They have during the month March 2010 availed and utilized Cenvat credit of duty paid on inputs GP plain sheets - cut to length sheets received from M/s. Colour Roof (India) Ltd. A show cause notice dated 30.03.2011 was issued to M/s. Colour Roof (India) ....
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....he manufacturer was not required to pay duty as the goods were exempted. Similar view has been held by the Tribunal in the case of Cummins Diesel Sales & Service India Ltd. [2015 (315) ELT 63 (Tri.- Mumbai)]. Accordingly the entire basis on which this demand has been made cannot survive and the impugned order needs to be set aside. 3.3 Learned AR reiterates the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 The impugned order records the following:- "24 I observe that in this case the supplier of inputs M/s CRIL, Raigad were issued a SCN dated 30.03.2011 by the Commissioner of Central Excise, Raigad. The SCN has now been decided vide Order-in-Original No. 03- 047 03-04)Commr/ RGD/12-13 dated 31.07.2012. It has been held that Ms. CRIL availed CENVAT credit of duty paid on the raw materials used in the activity of mere cutting and shearing of coils which does not amounting to manufacture. The process carried out by them was mere cutting to the length of GP Coils and slit coils and that the same did not amount to manufacture as per the provisions of Section 2(f)....
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.... Sheets 'cut to length, by M/s. Colour Roof (India) Ltd., which was not the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985, leviable under the Central Excise Act; (for the reasons mentioned earlier) (ii) they had availed Cenvat credit on the strength of invoices issued by M/s. Colour Roof (India) Ltd, Gut No.212, A, B, C, 213 to 218 and 22 Post Sagaon, Khopoli Dist Raigad for the clearances of non-excisable commodity, viz., GP Sheets cut to length, which do not appear to be valid documents specified in Rule 9 of the Cenvat Credit Rules, 2004, 27. I find that the notices has submitted that the Out to Length Steel Sheets are duly covered under the scope of "inputs" as per Rule 20) of Cenvat Credit Rules, 2004. They have complied with all the requirements of re 2(k) read with Rule 3, Rule 4, Rule 5 rule 6 and rule 9 of Cenvat Credit Rules, 2004 and there are no grounds to allege wrong availment of cenvat credit. 28. I find that the assessee wilfully mis-stated the nature of payments made by Ms Colour Roof (India) Ltd, and also availed credit of the same by suppressing the vital fact about the nonexcisability of the input on which the....
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.... duty in respect of unconditionally fully exempted goods and he cannot avail the CENVAT credit of the duty paid on inputs. i) It is further clarified that in case the assessee pays any amount as Excise duty on such exempted goods, the same cannot be allowed as "CENVAT Credit to the downstream units, as the amount paid by the assessee cannot be termed as "duty of excise under Rule 3 of the CENVAT Credit Rules, 2004. ii) The amount so paid by the assessee on exempted goods and collected from the buyers by representing it as "duty of excise will have to be deposited with the Central Government in terms of Section 110 of the Central Excise Act, 1944, Moreover, the CENVAT Credit of such amount utilized by downstream units also needs to be recovered in terms of the Rule 14 of the CENVAT Credit Rules, 2004" 33. In view of the above said Board's circular the matter is rested and the amount of duty paid by the M/s.CRIL has to be treated as deposit with the Central Government. The cenvat credit so availed by the noticee is also subject to recovery. 38. The buyer, while buying the raw material/input alongwith the commercial aspects should also checks the legality of the taxation,....
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....d Cenvat credit on the strength of invoices issued by Ms. Colost Food (India) Ltd, Gut No.212. A, B, C, 213 to 218 and 22 Post: Salgaon, Khopoli Dist Raigad for the clearances of non-excisable commodity, viz., GP Sheets 'cut to length, which do not appear to be valid documents specified in Rule 9 of the Cenvat Credit Rules, 2004; 43. Besides, in terms of Rule 9(5) of the Cenvat Credit Rules, 2004, the burden of proof regarding the admissibility of the Cenvat Credit lies upon the manufacturer availing the credit. In this case, the assessee have failed to discharge the said burden of proof in as much as they availed the Cenvat Credit of amounts paid by their supplier which was in the nature of deposits with the government and therefore the assessed have also contravened the provisions of Rule 9(5) of the Cenvat Credit Rules, 2004. 44. In view of the above, the Cenvat Credit totally amounting to Rs. 71,49,505/-, is recoverable from M/s. KLT Automotive & Tubular Products Ltd, Palghar, along with interest under the provisions of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(1), (presently sub section (4) of Section 11A of Central Excise Act, 1944, w.e.f. 08.04.201....
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....ere cleared by the appellant. Thus, on the facts of the case, this itself proves that the inputs having subjected to processing resulting in value addition as the same have been cleared at appropriate rate of duty which is higher and it cannot be said that the inputs are cleared as such. 5(a) The next ground taken is that the appellant is registered with the Central Excise department for the activity of manufacturing colour sheets which includes activity of cutting, slitting along with cleaning, de-greasing, etc. of the sheets or raw material. 5(b) The next ground raised is that the appellant have not indulged in any new activity as the activity is a common activity and incidental in manufacturing of colour sheets, which are also cut to size, on finishing for making them marketable. Only because the clearance in question are not colour sheets but undergone other processes including de-greasing, cleaning, etc. has resulted into value addition which is evident from the fact that the clearances of the goods in question are at higher rate of duty. 5(c) The next ground taken is that the additional duty of Rs. 50,40,102/- have been paid from PLA which also shows bona fide on the....
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....thus prays for upholding the impugned order. 7. Having considered the rival contentions we find that there is definitely some value addition involved as the goods in question have been removed at a higher rate of duty resulting into additional duty to the exchequer of Rs. 50.40 lakhs. Further, we find that the facts and circumstances of the present case are squarely covered by the ruling of the Hon'ble Bombay High Court in the case of Ajinkya Enterprises (supra). Thus, the appeals are allowed. The impugned order is set aside with consequential relief, if any." 4.4 Since the appeal has been allowed in the case of M/s. Colour Roof (India) Ltd., the impugned order can be set aside for this reason itself. 4.5 We take note of the decision of the Hon'ble Gujarat High Court in the case of Nahar Granites Ltd. [2014 (305) ELT 9 (Guj.)] wherein following has been held:- "2. Briefly the issue is as follows. The respondent assessee purchased a product called Zinc Dross which was a by-product of a manufacturing activity carried on by the supplier of the goods to the respondents. It is not in dispute that the supplier paid excise duty on the basis that the product was excisable. It is no....
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..... He relied on decision of the Supreme Court in case of MDS Switchgear Ltd. (supra) as well as Sarvesh Refractories (P) Ltd. v. Commissioner of C. Ex. & Customs reported in 2007 (218) E.L.T. 488 (S.C.). 7. Rule 3 of the Cenvat Credit Rules, 2004 allows a manufacturer or producer of final product or a provider of taxable service to take Cenvat credit of the duty of excise specified in the First Scheduler to the Excise Tariff Act. Rule 4 of the Cenvat Credit Rules, 2004 lays down the conditions for allowing Cenvat credit. Sub-rule (1) thereof provides that Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Proviso to sub-rule (1) puts certain limitations on such immediate availability of Cenvat credit. We are however, not concerned with the proviso. 8. In terms of Rules 3 and 4 of the Cenvat Credit Rules, 2004, a manufacturer would be entitled to avail the Cenvat credit in respect of the inputs used for the manufacture of a final product or in providing taxable service of the excise duty specified in First Schedule to the Excise Tariff Act. Insofar as the r....