TaxTMI 
TaxTMI 
2024 (8) TMI 1206
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....y premises of Rolled Steel Products Division. On application, M/s.Renold obtained Central Excise Registration dt. 29.09.2008 for the Industrial Chain Division. It appeared that the appellant was liable to pay Central Excise duty on the finished goods lying in stock as on the date of transfer of the industrial chain division on sale to M/s.Renold and to pay an amount equal to cenvat credit taken on the capital goods, inputs and work--in--progress, since the finished goods and cenvat credit--availed goods were considered to have been removed by appellant to M/s.Renold. Therefore, a show cause notice dt. 17.09.2009 was issued to the appellant in this regard. After adjudication, the original authority vide Order--in--Original No.11/2010 dt. 06.08.2010 confirmed the demand of Rs.3,47,72,428/-- along with interest and also imposed penalty. The issue on limitation was also held against the appellant. 2. Against such order, the appellant preferred an appeal (E/687/2010) before the Tribunal. The appellant was directed to make a predposit of Rs.1 crore within 8 weeks as per Stay Order No.708/2011 dated 8.9.2011. The appellant made total predeposit of Rs.1 crore by 4 installments of Rs.25 la....
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....he burden of predeposit paid under Section 35F has been passed on as cenvat credit to another manufacturer to enable them to take cenvat credit and utilized the same for discharge of duty liability, it tantamounts to taking suo motu refund of predeposit amount without any authority of law and without the knowledge of the Department. The appellant has passed on the duty even before the appeal has attained finality. The appellant has contravened the provision of Section 35F of the Central Excise Act, 1944 also. 7. Again, as per Rule 9 (1) (b) of CCR 2004, the supplementary invoice issued by a manufacturer for payment of additional amount of duty is not a valid document for taking cenvat credit where the additional amount of duty became recoverable from the manufacturer on account of non--payment / non--levy / short levy by reason of fraud, collusion, suppression of facts etc. 8. Rule 26 (2) (ii) of Central Excise Rules, 2002 provides that any person, who issues any document on the basis of which the user of the document is likely to take or has taken any ineligible benefit like claiming of cenvat credit, is liable to penalty as per the said rule. 9. The present show cause notice d....
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....t has not claimed refund of Rs.1 crore till this date. It is submitted that the appellant undertakes that they will not be seeking any refund of the predeposit made. 10.2 In regard to the penalty made under Rule 26 (2) of Central Excise Rules, 2002, it is submitted by the Ld. Counsel that the allegation is that the appellant has issued supplementary invoices without delivery of goods and that they have facilitated M/s.Renold to avail ineligible credit. The penalty under Rule 26 (2) of Central Excise Rules, 2002 can be imposed only on natural persons. The appellant being a corporate entity penalty imposed under Rule 26 (2) cannot sustain. To support this argument, the Ld. Counsel relied upon the decision in the case of Woodmen Industries Vs CCE Patna -- 2004 (164) ELT 339 (Tri.--Kolkata) as affirmed by the Supreme Court in the case of Commissioner Vs Woodmen Industries -- 2004 (170) ELT A307 (SC). Further, department has not initiated any proceedings against M/s.Renold for taking ineligible credit. 10.3 In regard to the allegation that the supplementary invoices issued by the appellant are in violation of Rule 9 (1) of (b) of CER 2002, it is submitted that the Tribunal has set asi....
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....ule 26 of Central Excise Rules, 2002. 11.4 The Ld A.R prayed that the appeal may be dismissed. 12. Heard both sides. 13. The demand is raised invoking Section 11D of Central Excise Act, 1944. The said section reads as under : SECTION 11D. Duties of excise collected from the buyer to be deposited with the Central Government. - (1) Notwithstanding anything to the contrary contained in any order or direction of the Appellate Tribunal or any Court or in any other provision of this Act or the rules made thereunder, every person who is liable to pay duty under this Act or the rules made thereunder, and has collected any amount in excess of the duty assessed or determined and paid on any excisable goods under this Act or the rules made thereunder from the buyer of such goods in any manner as representing duty of excise, shall forthwith pay the amount so collected to the credit of the Central Government. (1A) Every person, who has collected any amount in excess of the duty assessed or determined and paid on any excisable goods or has collected any amount as representing duty of excise on any excisable goods which are wholly exempt or are chargeable to nil rate of duty from any perso....
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....on the burden of the duty paid by them as predeposit to M/s.Renold. The deposit made by them is still with the Government. The appeal in which they had made the predeposit has attained finality wherein the demand, interest and penalties have been entirely set aside on merits as well as on issue of limitation. Consequently, the appellant would be eligible for refund of predeposit of Rs. 1 crore made by them. The appellant has not applied for refund and does not intend to claim refund of the predeposit made. 15. Interestingly, when the amount so deposited is with the Central Government, the department has sought to recover the very same amount alleging that the appellant has made dual use of the amount. There is no such dual use. The intention of predeposit is to protect the revenue involved in the appeal and making the recovery of the demand easy and hassle free in case the demand is confirmed in favour of Revenue. The amount is deposited with the Central Government towards the demand impugned in the appeal. In case the demand is confirmed the deposit attains the character of duty / tax and is recovered / adjusted. There is no requirement of further recovery proceedings in regard t....