TaxTMI 
TaxTMI 
2024 (8) TMI 1400
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....ch the appellant has issued central excise invoice in terms of Rule 9 of Cenvat Credit Rules, 2004, wherein they have charged the said CVD and Cess as "Excise duty 100%" and SAD as "AED 100%". The audit report as well as show cause notice admits that the amount charged by the appellant in the invoice is the CVD and SAD portion which the appellant has reversed in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. 1.2 The show cause notice was issued to recover the said SAD portion on the ground that the reversal of credit means taking cost to oneself and adjusting by debiting own account and not passing further and thereby appellant should have reversed the credit without passing/recovering on invoice. Furthermore, SAD is not an excise duty as same has not been prescribed in the statue i.e. section 3 of the Central Excise Act and further amount reversed in terms of Rule 3(5) cannot be considered as duty and thus charging of said SAD portion will be considered as excess duty recovered from the buyer and same needs to be recovered under Section 11D of Central Excise Act, 1944. Therefore the present appeal. 2. Shri Mehul Jivani, Learned Chartered Accountant appearing on behalf ....
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....pearing on behalf of the Respondent reiterates the finding of the impugned. 4. We have carefully considered the submission made by both sides and perused the records. We find that at the time of receipt of the inputs the appellant have taken credit of CVD as well as SAD and when the same inputs were cleared as such the appellant have issued the invoice to their other units. Some copy of the invoice is scanned below : - 4.1 From the above invoice, it can be seen that against CVD it was mentioned "Excise duty 100%" and against SAD it was mentioned as "AED 100%". However, admittedly both these duties which were availed as cenvat credit were reversed in terms of Rule 3 (5) while issuing the invoice. Therefore, the demand was confirmed under Section 11D in respect of SAD shown in the invoice issued under Rule 9 of Cenvat Credit Rules, 2004. The Section 11 D and Rule 3 (5) is reproduced below:- 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 ther....
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....[Principal Commissioner of Central Excise or Commissioner of Central Excise for the refund of such surplus amount.]" 4.2 From the above rule 3 (5) it is clear that when any input is cleared as such whatever credit is availed on such input is required to be reversed. Therefore, the appellant have rightly reversed the amount equal to cenvat credit on such input. From the provision Section 11 D it is clear that any amount collected 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. This shows that any amount showing as excise duty collected but not paid shall be paid to the credit of Central Government. In the present case, admittedly the amount was determined and paid in terms of Rule 3 (5) of Cenvat Credit Rules, 2004. Therefore, the provisions of Section 11 D is not applicable. This issue has been considered in various judgments as follows:- a) In the case of Unison Metals Ltd. 2006 (204) E.L.T. 323 (Tri.- LB), the larger bench of this tribunal held ....
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....from the factory. The amounts so paid are the amounts recovered by them from their buyers. Thus, in the present cases, no amounts collected from the buyers remain unpaid to the revenue, irrespective of whether those amounts were represented in the sales documents as duty or not. In fact, the invoices referred to the payment in different terms such as "8% reversal of assessable value", "8% value", "8% duty etc." As the amounts recovered from the buyers are not retained by the assessees, the question of deposit cannot arise, whether under Section 11D or any other provision. A reading of Section 11D makes it clear that what is required is that amounts collected as duty should not be retained by the manufacturers and should be deposited with the revenue. This was the view that Division Bench took in the case of Nu-Wave shoes. We may read the relevant part of that order: "Admittedly, Rule 57CC(1) is applicable in the present case. It is not the case of the Department that the assessees have been charging an amount over and above 8 of the price of the exempted variety of footwear from their customers and in fact, the show cause notice proceeds on the basis that only the amount r....
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.... the person who has borne the incidence of such amount in accordance with the provisions of Section 11B. It is obvious that if in a given case, the manufacturer has collected less amount as representing the duty of excise than what is due according to law, he is not relieved of the obligation to pay the full duty according to law. This is the general purport and meaning of Section 11D. These may be case where goods are removed/cleared without effecting their sale. In such a case Section 11D is not attracted. It is attracted only when goods are sold. The purport of this section is in accord with Section 11B and cannot be faulted." 9. The scheme of Central Excise duty payment is that a manufacturer removed goods from the factory of production after payment of duty. While selling the goods, the manufacturer recovered the duty so paid. In doing so, an assessee is recouping the tax already paid. The arrangement is not that the assessee first collected the tax from the buyer of the goods and then remits the amount to the government. Section 11D has to be read keeping this scheme in view. Therefore, the provisions for "every person who is liable to pay duty........ and has collec....
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....the said Rules of 2004 provides a scheme. However, since the appellant in this case did not follow such scheme, the same is not relevant for the present purpose. Rule 6(3)(b) of the said Rules of 2004 provides as follows : "if the exempted goods are other than those described in condition (a), the manufacturer shall pay an amount equal to ten per cent. of the total price, excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product charged by the manufacturer for the sale of such goods at the time of their clearance from the factory;" 8. There are Explanations which apply to the entirety of Rule 6(3) of the said Rules, including the following first Explanation : "The amount mentioned in conditions (a) and (b) shall be paid by the manufacturer or provider of output service by debiting the CENVAT credit or otherwise." 9. According to the appellant, the appellant calculated the 10% in terms of Rule 6(3)(b) of the said Rules of 2004 and passed it on to the purchasers of the relevant goods from the appellant; but instead of depositing such amount of 10% collected from the purchasers of the appellant's exempted goods, ....
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....nting duty of excise, they have to pay this amount to the Government in terms of Section 11D of the Central Excise Act, 1944...". (Emphasis in original) 11. The appellant refers to an order of a Larger Bench of the Customs, Excise and Service Tax Appellate Tribunal reported at 2006 (204) E.L.T. 323 (Unison Metals Limited v. CCE, Ahmedabad). Paragraph 8 of the report, in the context of the circular that was then applicable, is of relevance : "8. In the present case, it is not in dispute that the assessees had paid 8% of the value of the goods in terms of Rule 57CC at the time of removal of the goods from the factory. The amounts so paid are the amounts recovered by them from their buyers. Thus, in the present cases, no amounts collected from the buyers remain unpaid to the revenue, irrespective of whether those amounts were represented in the sales documents as duty or not. In fact, the invoices referred to the payment in different terms such as "8% reversal of assessable value", "8% value", "8% duty etc." As the amounts recovered from the buyers are not retained by the assessees, the question of deposit cannot arise, whether under Section 11D or any other provisio....
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....e appellant to either make over the amount that was realised by the appellant by way of excise duty from the appellant's purchasers or to debit the CENVAT credit obtained by the appellant by the equivalent amount. There is no dispute that the appellant did, in fact, debit the CENVAT credit by the equivalent amount. If the CENVAT credit can be seen as money in the hands of the assessee in some other form, the debiting of the CENVAT credit by an equivalent amount, tantamounts to such amount having made over to the excise authorities or refunded to the excise authorities or the like. 16. It is evident that the adjudicating authority did not refer to the first Explanation to Rule 6(3) of the said Rules of 2004 while passing the relevant order. In such circumstances, the adjudicating authority committed an error of jurisdiction in failing to appreciate the extent to which the dictum in Unison Metals Limited bound the adjudicating authority. The discussion in paragraph 8 of the judgment pertaining to the then duty of 8 per cent. is the same discussion that is relevant in the context of the first Explanation to Rule 6(3) of the 2004 Rules that ought to have guided the adjudicatin....
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....SSUE NO : 3.0 DATE : 01-05-2011 UNAUCK Q"WEIL (INDIA) LIMITED Survey No. 215/1, PLOT NO. 10, DADRA INDUSTRIAL ESTATE, DADRA (D & N. H. U.T) 395 193. DELIVERY CHALLAN-CUM-PROFORMA INVOICE GROWEL 2. SD 9001, ISO 14001. OHSAS 1800 Certified Company 61515302 Bill No : 6157800357 Bill Date : 07.10.2015 D.Challan No : 6157700357 Date : 07.10.2015 OC No : Date : Party Ref : Date : Name Of Excisable : ELECTROPLATING Commodity : CHEMICAL Tariff Sub Heading : 38249090 Excise Duty . 19.50% Iny By Prep Date 07. 10.2015 Invoice To: 1000 Grauer & Weil (I) Ltd. Plot No. 407. G.I.D.C., Vapi-396195 ECC No:AAACG 3741 KXM 004 CST No:24750800037 DT:29.09.05 : Sr. Description of Goods Product No. of Produ67 . 10.2939%) 192-33 Removal Date/TimeValue Rate Qty Packs TADAL LUB FL 10 25.000 25.000 671.85 16796.25 0 16796.25 500 14225.40 + 25 = 726.29 Total Amount 16,796.25 Less Discount : 0.00 Net Amount : 16,796.25 Ex. Duty 100 %: 2008.00 AED 100% 726.29 : Round Off : 0.25 Gr.Total-INR : 19,530.29 bise Duty Payable : Rs. TWO THOUSAND EIGHT ONLY ucation Cess d Excise Duty : Rs. ZERO ONLY c....
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....3.16 Rs. BE Gross Total Rs . 78947.30 BCD Rs. 22404.20 NCD Duty Rs. 0.00 ANTID Rs. 0.00 SAFEGUARD Duty Rs. 0.00 CVD Sch 2 Spl Excise Duty Rs. 0.00 Rs. 40140.90 CESS 0.00 GSIA Rs. 0.00 Rs. TTA 0.00 Rs. 0.00 Customs Edu. Cess Rs . 1250.90 Edu. Cess CVD Rs. Addl Duty - (Imports) Rs. 14525.80 Health CVD Rs . 0.00 SHE. Cess CVD Rs . 0.00 SH Cust Edu. Cess Rs. 625.50 671.88 22404.20 Duty Payable: KS. Seventy Eight Thousand Nine Hundred and Forty Seven only 78947 Po - 6153200032. 5105624815 GRN- (150) 37164 Document 3 Tel : (0260) 2669 985/87 Fax : (0260) 2668 151 GRAUER & VEIL (INDIA) LIMITED Survey No. 215/1, PLOT NO. 10, DADRA INDUSTRIAL ESTATE, DADRA (D & N. H. U.T) 396 193. E-mail : [email protected] DOC : F/F 35/02 ISSUE NO · 3.0 DATE : 01-05-2011 ROWEL ISO 14001, OHSAS 18001 Certified Company DELIVERY CHALLAN-CUM-PROFORMA INVOICE Invoice To:1000 Grauer & Weil (I) Ltd. Plot No. 407, G.I.D.C., Vapi-396195 ECC No: AAACG 3741 KXM 004 CST No:24750800037 DT:29.09.05 % 61516849 Bill No : 6157800399 Bill Date : 24.10.2015 D.Challan No : 6157700399 Date : ....
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....E. NSNO Exc Dty Rt CVD amt (Rs) 29143990 BENZILIDENACETONE 5000.00 4.050000 29143990 012/2012 165 7.50 182595.50 KGS 1371340.13 29143990 12.50 184273 80 Educational Cess on CVDS 0.00 K 0.00 Sec & Higher Edu. Cess on CVD 0.00 % 0.00 Customs Educational Cess 2.00 5742.50 Customs Sec & Higher Edu: Cess 1.00 Gulshan2TaneJa Addl Duty - (Imports) 019/2006 4.00 मà¥à¤²à¤¿à¤¶à¥à¤¤ सरेजा RS 1371340.13 Page Total RS Assistant Drugs Controller Rs. 1371340. 13 BE Gross Total Rs. सहायक अà¤à¤¿ निमंतà¥à¤°à¤• BCD Rs - 102850.50 NCD Duty J.M.P.T., Nhava Shoo Navi ANTID Rs . 0.00 SAFEGUARD Duty Rs जे. à¤à¤¨.पी.टी. नà¥à¤¯à¤¾à¤¯à¤¾ शोडा, CVD Rs . 184273.80 Sch 2 Spl Excise Duty Rs - 0.00 CESS RS . 0.00 GSIA Rs . 0.00 TTA RS . 0.00 Edu. Cess CVD Rs . 0.00 Customs Edu. Cess Rs . 5742.50 Health CVD RS - 0.00 Addl Duty - (Imports) Rs : 66683. 10 SHE. Cess CVD Rs . 0.00 SH....
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....HOUSAND EIGHT HUNDRED FIFTY FIVE ONLY : Rs. ZERO ONLY : Rs. EIGHTEEN LAKH SIXTEEN THOUSAND TWO HUNDRED SEVENTY ONLY Ekta Highway @ fw in ud. samba Mode of Transporter : Destination : Druma 170 Bags Bottles : Date : Date : LR/RR No. : Hundi No. : Cases Carboys : C/Boxes : Doc. Through: For GRAUER & WEIL (INDIA) LIMITED VAT TIN No. 26000003523 C.S.T. No. DNH/CST/3453 DL. 22-12-1999 P.A. No. AAACG3741K CIN NO. L74999MH1957PLCO10975 SUBJECT TO TERNS & CONDITIONS ON REVERSE Authorised Signatory Document 6 Duplicata '(Lagozta= copy) Tullsn Customs EDI Svatom . INporta V1. 32001 UNCH, CHAVA BHEVA, SALITRANT. DIST . 24ICAD . 400707 BILL OF ENTRY FOR HOME CONSUNDCTON (77) CHA : AACC93427DCHO01 (GRENIER CLEARING AGENCY DVE CZ) /U/H COC 15./DE/DIZ100g : 1019552077/17 . 06 . 2016/10030732 DIM/6153200126 (1):" AD Code : 3290001 UNA & HEIL (ENDEA) LIMITED. :213/1/10 DADZA IVOL. ESTATE, (DADZA 396191 Daymont Machod Transaction PASAR MAVELIY CADRA - :2129711/10/06/2016 14/06/2016 Port or Loading : 1311inn Enity Of Conagn. UNITED SINGDOK H/BL WO Daca 41072 .000 KGS entry Of czgn. : KABARISIAW MSCURMOB 4397 11/05/2016 Daca ....