TaxTMI 
TaxTMI 
2023 (2) TMI 1327
X X X X Extracts X X X X
X X X X Extracts X X X X
....Credit - Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 made applicable by Section 174 of the CGST Act, 2017; III. I refrain from imposing penalty as per para 7 of the Hon'ble Tribunal's order no. 21159-21164/2018 dated 16.08.2018." 2.1 Appellant was a service centre situated at Nagpur of Volvo India Pvt. Ltd., registered as LTU having factory at Hoskote (Company). They had one Central Warehouse at Hoskote and various service centres located across the country. 2.2 The Company's factory is engaged in the manufacture of automobiles. Central Warehouse was set up where spare parts imported on payment of applicable Customs duties including countervailing duty were stored. Service centres at various places in India are set up to cater to the servicing needs of the customers located in and around such places. As and when there is a requirement from any of the service centres for any particular part number, the Central Warehouse picked and repacked into smaller bulk pack packages and cleared the same under the cover of a stock transfer invoice to the service centre. From the service centre like present appellant, parts in retail packs are sold to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pellant have filed this appeal. 3.1 I have heard Shri Rajesh Ostwal and Ms Payal Nahar, Advocates for the appellant and Shri P K Acharya, Superintendent, Authorized Representative for the revenue. 3.2 Arguing for the appellant, learned Counsels submit that * The Commissioner has not followed the remand direction wherein it was directed to allow credit after verifying the records, available with appellants or the department after considering the fact that the department has already conducted the audit of the unit from May to June, 2007 and that departmental audit has concluded that the case be considered under the provisions of Section 11A(2) as no fraud, collusion etc, were alleged and also did not raise any objection regarding the nature of documentation and entitlement to credit. * The show cause notice also did not raise any objection regarding the nature of documentation, co- relation of the documentation and entitlement to credit. * Undisputedly all the parts and components were imported into the Central Warehouse only on payment of appropriate Customs Duty whether prior to or after 1.06.2006. The Appellant received imported goods from the Central Warehouse only. There....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lant had availed credit in respect of the goods received during the months of June and July 2006 by correlating the Stock Transfer Notes raised at the Central Warehouse with the duty payment particulars. * Once it is admitted by the department that the goods which were cleared from the Central Warehouse were meant only for use at the service centres, the department is precluded from contending that credit would not be available to the recipient, as long as receipt of the inputs at the service centre is not in dispute. Therefore, once the source is identified, credit relating to goods in question cannot be denied. * The appellants in support of their justification for availment of Cenvat Credit on inputs received from central warehouse during the period from June 2006 to July 2006, submitted the following documents: o statement demonstrating branch wise bifurcation of duty paid. o List of invoices issued from Central Warehouse to various service centre during the month of June, 2006 and July, 2006 o ER-1 return filed in the month of December, 2006 evidencing that the payment of details of Excise duty against the clearances made from Central Warehouse, Bangalore to branches....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e's submissions dated 06.06.2019; 24.09.2019 and 17.10.2019. The issue came up before me to decide/ determine the admissibility of Cenvat credit taken by the noticee in terms of Hon'ble CESTAT's orders supra. 16. ...... 17. Basically the show cause notice was issued for demand of inadmissible Cenvat credit of Rs. 2,77,29,218/- availed by the noticee on the input received by the noticee prior to 01.05.2007 i.e. the date on which the registration was obtained. After the due deliberation, the then Commissioner, LTU, Bangalore has adjudicated the show cause notice vide OIO No. 20-25/2009- Comnr/LTU dated 26.02.2009. In the said order the demand of inadmissible Cenvat was confirmed to the tune of Rs. 47.98.991/- and remaining credit of Rs. 2,46,32,849/- was allowed. Being aggrieved, the noticee preferred an appeal with CESTAT. The order No 20155-60/2019 dated 20.03.2019 has remanded back the case to original adjudicating authority. The Hon'ble Tribunal in para 7 held that, "7. In view of the above, we allow the appeals by way of remand to the jurisdictional authorities to allow credit after verifying the records, available with the appellant or the Department pertai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mitted the disallowance of Cenvat credit on the basis of variance in STN and GRNs for the period June, 2006 to April, 2007. In the said Annexure, the issue of availment of said credit has not been discussed. The noticee in their submission during the previous adjudication proceeding had not submitted any record/ documentary evidence in relation to the availment of Cenvat credit of Rs. 15,19,163/-. Even the stock in quantity has also not been disclosed. In the absence of stock in quantity which is the basic requirement for quantification of availment of Cenvat credit, the authenticity of the said credit cannot be established. 19.2 It is further observed that the noticee has submitted table describing bill of entry on sample basis, parts available with Nagpur branch on 01.06.2006- Annexure-III. However this record is neither justifying the stock available with the noticee on that date nor their centre warehouse submitted any record justifying the quantity of stock of input available with the noticee. On this ground also in the absence of proper records the credit cannot be construed as admissible. 19.3 The noticee came up with the submission for said availment that here was no du....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 31,00,320/-. In the previous OIO, the said credit was denied on the basis of nonlinkage of the said amount with duty paying documents and on the stock transfer notes information relevant for availment of Cenvat credit under the Cenvat Credit Rules, 2004 was not mentioned. As per the directions of the Tribunal orders, especially in the Misc order, the requirement of documents was restricted to records related to receipt (import), storage and distribution of parts. As per the said verdict, documents relevant for the availment of Cenvat credit need not necessarily be complied with. Thus the substantial condition remains for availment of Cenvat credit is the records related to receipt, storage and distribution. Accordingly the noticee was required to submit the said record. On perusal of submission dated 06.06.2019; 24.09.2019 and 17.10.2019 with enclosures, I find that the noticee has submitted i) list of invoices issued for various branches including Nagpur in the month of June, 2006 and July, 2006- Annexure-I & Copy of ER-1 for the month of December, 2006 Annexure- II. 21.2 Regarding submission of list of invoices I find that it is a fresh list submitted by the noticee incorporat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce this case is being adjudicated within precincts of the Tribunal where penalty is already waived I have to travel the path as directed by the Hon'ble Tribunal. Thus no penalty is being imposed in this matter. It is on record that the demand is well within the normal period of one year. 23. Regarding interest I find that the recovery of interest is a natural corollary to the demand. Once demand is upheld, automatically the recovery of interest is to follow suit. I hold that interest at appropriate rate is recoverable from the Noticee under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 till the date of actual payment of dues. Hon'ble Supreme Court in the case of Commissioner of Trade Tax [UP] Vs Kanhai Ram Thekedar reported in 2005 - TIOL- 76-SC-CT, has held that there is no requirement of a notice to be given to the assessee for recovery of interest, which the assessee was required by law to pay on the tax admittedly payable but which was paid beyond the time limit. Further in the case of PRATIBHA PROCESSORS Versus UNION OF INDIA reported as 1996 (88) E.L.T. 12 (S.C.) in the para 13 the Hon'ble Apex Court held that, "....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Department that parts are dispatched or sold from CWH to places other than service centres or that Service Centres procure parts from other sources. In such a case, it is incomprehensible as to how some parts could not be held to be not correlated to be duty paid. Having dealt the issue from the issue of substantial compliance, having held that the registration itself is a procedural requirement and stock transfer invoice a duty paying document the learned Commissioner could have got the issue examined in totality from CWH and further transfer to various service centres before denying the credit. On this count also we find that the appellant's submission does survive on merits. However, for a proper appreciation of the issue and for qualification of credit admissible, the issue requires to go to the jurisdictional authority who shall allow the credit on verifying the records at CWH and transfer to various service centres in totality, within 3 months of submission of records and evidence to that effect by the appellants. Under such circumstances, we find that the penalties levied therein are not maintainable; therefore, they are liable to set aside. 6. Coming to the third issue o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... contained in sub-rule (1), the manufacturer or producer of final products shall be allowed to take CENVAT credit of the duty paid on inputs lying in stock or in process or inputs contained in the final products lying in stock on the date on which any goods manufactured by the said manufacturer or producer cease to be exempted goods or any goods become excisable." Rule 9 (2) of the CENVAT Credit Rules, 2004 read as follows: (2) The CENVAT credit shall not be denied on the grounds that any of the documents mentioned in sub-rule (1) does not contain all the particulars required to be contained therein under these rules, if such document contains details of payment of duty or service tax, description of the goods or taxable service, assessable value, name and address of the factory or warehouse or provider of input service: Provided that the Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case maybe, having jurisdiction over the factory of a manufacturer or provider of output service intending to take CENVAT credit, or the input service distributor distributing CENVAT credit on input service, is satisfied that the duty of excise o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Such a finding cannot be sustained. ER-1 is statutory record and it is not even the case that duty was not paid for which notice has been issued under Section 11 A of the Central excise Act, 1944 or Rule 8 (3) of the Central Excise Rules, 2002. There seems to be no merit in the order. 4.6 In the case of similarly placed service center at Hyderabad, adjudicating authority has considered the same evidences for verification as directed by the tribunal while remanding the matter and has allowed the credit. The relevant excerpts from the order in original HYD-EXCUS-001-COM-014-19-20 dated 05.03.2020 of the Commissioner Central Tax, Central Excise and Service Tax is reproduced below: "23 I find that M/s Volvo has paid Central Excise duty to the tune of Rs 6,47,92,032/- on 04.05.2007 by debiting CENVAT Credit account, covering the period from June 2006 to April 2007 and paid an amount of Rs 33,01,529/- vide challan dated 05.05.2007 and 25.07.2007. they took Central Excise Registration on 04.05.2007. 24. I find that Commissioner, LTU Bengaluru had disallowed the CENVAT Credit of Rs 1,03,99,712/- for failure to submit duty paying documents in respect of the goods lying in stock as on....