2023 (9) TMI 60

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....002, which is made operational, by a mechanism of refund of duty paid in cash, after theCENVAT credit available is exhausted, with an upper limit.Department alleges that the appellants did not, in certain months, utilise the available credit, deliberately, with an intent to avail full refund of duty paid through cash. It is also alleged that the appellants are required to include the value of the corrugated boxes supplied by their customers, i,e. M/s Vishal industries , in the assessable value of the tin containers manufactured and cleared by them. A show cause notice was issued and was upheld by the impugned order.M/s Vinayak Industries were ordered to pay Central Excise duty of Rs.18,18,507/- along with interest of Rs.4,69,435/-; to payback the refund of Rs.10,85,040/-. A penalty of Rs.29,03,547/- under Section 11AC and penalty of Rs.1,50,000/- under Rule 25 of Central Excise Rules 2002 were imposed on M/s Vinayak Industries. A penalty on Rs.1,00,000/- was imposed on M/s Vishal Industries under Rule 26 of Central Excise Rules, 2002. 2. Learned Counsel for the appellants submits that there is no time limit fixed under CENVAT Credit Rules,2002 for availing credit on inputs recei....

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....d back by issuing a show cause notice. He relies on the following cases: • JAUSS POLYMERS LTD.- 2003 (157) E.L.T. 626 (S.C.) • GRASIM INDUSTRIES LTD.- 2014 (304) E.L.T. 310 (Tri. - Del.) • INNOVATIVE TECH PACK LTD.- 2017 (358) E.L.T. 409 (Tri. - Chan.) • ITC LTD.- 2019 (368) E.L.T. 216 (S.C.) 4. Learned Authorised Representatives appearing for the Revenue reiterates the findings of the impugned order. 5. Heard both sides and perused the records of the case. Main allegation of the department is that the appellants have not availed CENVAT Credit available to them in order to manipulate the cash refund in terms of Notification no. 56/2002. The appellants claim that there is no time limit specified under CENVAT Credit Rules to avail CENVAT Credit. The appellant also relies on CBEC Circular No. 345/2/2000-TRU dated 29.08.2000. We find that Rule 4 of CENVAT Credit Rules 2004 stipulates that: RULE 4 conditions for allowing CENVAT Credit- (1)The CENVAT in respect of inputs may be taken immediately on the seat of the inputs in the factory of the manufacturer or in the premises of the provider of output service. The ....

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.... 9. We find that the same view has been taken by the Tribunal by the Division Bench of the Tribunal in the cases of Coromandel Fertilizers Ltd. v. CCE (A) reported in 2009 (239) E.L.T. 99 (Tri. - Bang.), Steel Authority of India Ltd. v. CCE reported in 2001 (129) E.L.T. 459 (Tri. - Delhi) and Tamilnadu Petroproducts Ltd. v. CCE reported in 2003 (160) E.L.T. 199 (Tri. - Chennai). Moreover in this case there was a valid reason also for not taking the credit during April, 2006 to December 2006 period, as the judgments of the Apex Court and the Tribunal on the issue of eligibility for Cenvat credit of the inputs used in the mines were against the appellant and this issue was ultimately decided in the appellant's favour sometimes in 2008. The judgment of the Single Bench of the Tribunal in the case of J.V. Strips Ltd. (supra) is not based on correct interpretation. 7. The appellants further submits that even if duty is paid from PLA, without fully utilising the CENVAT Credit available, the same cannot be a ground to deny cash refund under Notification no.56/2002, as such unutilised credit of a month can be utilised for payment in the subsequent months and the entire situation ....

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....e Supreme Court clearly show therefore that interest element was inbuilt in the price and that this price with the interest element inbuilt was under consideration by the Apex Court. When these facts under consideration by the Hon'ble Apex Court are read with the final judgment in the recalled order as in 1995 (77) E.L.T. 433 (para-66) = 1995 (58) ECR 385 (SC), it is clear that it was held by the Hon'ble Apex Court that such a deduction was admissible under the Act. 9. We find that as against this the ld. Commissioner (Appeals) has recorded that this element when inbuilt in the price and claimed as a deduction to be in the nature of an abatement and as therefore concluded that such a claim for abatement was not considered by the Hon'ble Supreme Court in the MRF case supra We find that this conclusion is erroneous and has perhaps reached without reading the para-16 of the original judgment of the Supreme Court and para-66 of the judgment on recall of the Supreme Court noted above. We have already held that such an inbuilt cost on this account of interest on sundry debtors was clearly considered as deductible by the Apex Court in the issue. Therefore, we find that on this as....