2023 (7) TMI 423

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... (RG-1) got damaged during loading and handling in the factory. However, some of bottles ( out of stock shown in the RG-1 ) were sent to the job worker under job work challan for further processing and during the process undertaken at the job worker's end some quantity of the bottles got damaged/ broken. After receipt of goods from job worker the total quantity of bottles which was sent to the job worker were accounted for by the appellant in their daily stock account as fully finished goods instead of accounting the same as damaged/broken bottles as waste and scrap. The appellant has gone to the extent that for such waste i.e. broken/ damaged bottles invoices were issued in the name of the appellant themselves by showing the value applicable to fully finished unbroken/ undamaged bottles and payment of duty thereon. Duty paid on such goods were taken as cenvat credit by them on the basis of their own invoice. It is the matter of record that the damaged/broken bottles were not reused or manufactured of the bottles and same were sold as scrap on payment of duty on nominal value ranging between Rs 0.44 per Kg to Rs.2.54 per Kg. 1.2 It has been contention of the department that the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... in the cenvat credit account. It has been contended that at the time of the removal of scrap/ waste of coloured bottles, the appellant has paid duty on transaction value of waste and scrap. Therefore, considering the transaction in totality it will amount that ultimately the appellant has paid duty on scrap/ damaged bottles. The learned advocate relied upon the following judgments to claim that even if duty was not payable, the credit of the duty paid by them shall be available. Ajinkya Enterprises 2013 (294) E.L.T. 203 (Bom.) UTTAM GALVA STEELS LTD. 2016 (336) E.L.T. 81 (Tri. Mumbai) M/s. Bajaj Allianz General Insurance Company Limited 2014-TIOL-1540-CESTAT- Mum SUNDARAM CLAYTON LTD. 2014 (33) S.T.R. 414 (Tri. - Chennai) 2.1 The learned advocate has also vehemently contended that the situation is revenue neutral and therefore the entire proceeding need to be withdrawn. The learned advocate has relied on following judgment to support his argument. Coca- Cola India Pvt Ltd - 2007 (213) ELT 490 (SC) Ineos Abs Limited - 2010 (254) ELT 628 (Guj.) 2.2 It has also been contended by the learned advocate that provisions of Rule 3....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ds no goods finished or waste or scrap were actually available against the invoices issued by them on which central excise duty was paid. The central excise law requires that the assessee has to pay central excise duty on clearances of finished goods or waste and scrap as the case may be. in this case since there is no clearance of the goods, there was no necessity for payment of the duty. An assessee cannot make payment of central excise duty on his own whims and conveniences. From the facts of this matter, we also note that creation of invoice in the appellant's own name and payment of the duty was not a mistake but it was a conscious decision taken by them to make good of the total of all finished bottles. 4.2 The assessee after making payment of the central excise duty on the basis of invoice issued by them to themselves they have taken Cenvat credit of the equal amount in the books of accounts as per provision of rules 3 of the Cenvat Credit Rules, 2004. It will be relevant to have a look at the provision of rule3 of the Cenvat Credit Rules, 2004 before proceeding further. "RULE 3. CENVAT Credit. - (1) A manufacturer or producer of final products or a [provider of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion 95 of the Finance (No. 2) Act, 2004 (23 of 2004); [(xa) the Secondary and Higher Education Cess on taxable services leviable under section 136 read with section 140 of the Finance Act, 2007 (22 of 2007); and] [(xi) the additional duty of excise leviable under [section 85 of Finance Act, 2005 (18 of 2005),]] : paid on - (i)any input or capital goods received in the factory of manufacture of final product or [by] the provider of output service on or after the 10th day of September, 2004; and (ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004, including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86-Central Excise, dated the 25th March, 1986, published in the Gazette of India vide number G.S.R. 547(E), dated the 25th March, 1986, and received by the manufacturer for use in, or in r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ue neutral. We are of the view that revenue neutrality being a question of fact and apparently they should not be foul. The facts of the matter does not absolved the appellant of consciously by passing the law and working with their own whims and convenience. The case law cited by the appellant have also been considered by us and we find that in the cases cited by the appellant the facts were very different and therefore the case laws relied upon by the counsel for the appellant are not applicable to the facts of the present case. 4.6 We take the shelter of the decision of the larger bench of this tribunal in the case of JAY YUHSHIN LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, NEW DELHI reported under 2000 (119) ELT 718 (Tri. Delhi) the relevant para is reproduced below :- "13. In the light of the above discussion, we answer the reference as under: (a) Revenue neutrality being a question of fact, the same is to be established in the facts of each case and not merely by showing the availability of an alternate scheme; (b) Where the scheme opted for by the assessee is found to have been misused (in contradistinction to mere deviation or failure to observe all the conditions) the existenc....