TaxTMI 
TaxTMI 
2024 (9) TMI 309
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.... (Two Lakhs Seventy Eight Thousand Eight Hundred Seventy only) upon the party under Section 11AC 1(a) of Central Excise Act, 1944. Further, benefit of reduced penalty is applicable under Section 11AC 1(b) of Central Excise Act, 1944." 2.1 Appellant is engaged in manufacture of plastic moulds and dies falling under Tariff item No.84798700, 84807100 and 39239090 of the First schedule to Central Excise Tariff Act, 1985. They are also availing the benefit of Cenvat credit of duty paid on inputs used in the manufacture of their finished goods. 2.2 During the course of audit it was observed that some of the manufactured moulds with PP granules were transferred to other factory namely M/s Amrita Mouldings Pvt. Ltd. without payment of duty for manufacture of plastic items on job work basis and after completion of job work moulds were returned to them. These moulds were not charged to duty and consumed over a period of time. The fact about clearance of moulds in this manner was not reflected in the daily stock register and ER-1 returns. Thus, appellant was suppressing the fact about the manufacture and clearance of the moulds without payment of duty. 2.3 Show cause notice dated 30.09.20....
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....010 (255) ELT 83 (Tri.-Bang.). * In any case the demand is revenue neutral, Appellate Authority have in para 5.11 observed as follows:- * The Appellants have pleaded that it is a case of revenue neutrality. I have carefully considered the defence plea that the case is fully covered by revenue neutrality. I agree with the defence contention that the entire exercise is revenue neutral since entire amount of Tax paid by them would be available to them as Cenvat credit on such capital goods. * Thus, in view of the decision in case of M/s Anglo French Textiles 2018 (360) ELT 1016 (Tri.-Chennai) and in the case of M/s Hindustan Zinc Ltd. 2008 (232) ELT 687, the demand should have been dropped. 3.3 Learned Authorized Representative reiterates the findings recorded in the orders of the lower authorities. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 On the merits of the issue impugned order records as follows:- "5.3 It is an undisputed fact that the Appellants had manufactured moulds and cleared them without payment of duty to other factory under the cover of Challans and without issuing any invoice. S....
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....he guise of the exemption notification. Hon'ble Supreme court also rejected the plea of "substantial law" and "procedural law" in this case. The Apex court explained in Para 24:- 24. The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements. Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance" depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substa....
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....procedural. The learned Counsel, however, submitted that even now the authorities can verify the necessary records which are audited and submitted to the authorities and find out whether the material was used in its own undertaking or not. We do not think we can accede to this contention. Having failed to file the necessary declaration he cannot now turn around and ask the authorities to make a verification of some records. The verification at the time when the raw material was still there is entirely different from a verification at a belated stage after it has ceased to be there. May be that the raw material was used in the industrial undertaking as claimed by the petitioner Company or it may not be. In any event the failure to file the necessary declaration has necessarily prevented the authorities to have a proper verification." 5.5 I also observe that the Appellants have contravened the provisions of Rule 4, 6, 8, 10, 11 & 12 of Central Excise Rules, 2002. Appellant's contention that department's allegations in this context are factually incorrect as the said goods were manufactured by them and issued for captive consumption. There was no contravention of any of the....
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....rther find that moulds, in question, have been manufactured in the factory. They are not such moulds which were purchased from outside and on which credit of duty was availed. It is provided under rule 4 of the Central Excise Rules, 2002 that no excisable goods would be removed from the factory without payment of duty. It is further provided under rule 11, of the Central Excise Rules, 2002 that all excisable goods would be removed from the factory under cover of an invoice, in view of these two provisions it is clear that manufactured goods are required to be removed on payment of duty under cover of an invoice. In the absence of provisions that the capital goods which are used in job-workers' factory will also be exempted in notification no.67/95-CE dated 16.03.95, the benefits of said notification cannot be extended when capital goods are used in a factory other than the factory of production where such moulds are being used. It is found that in the case of CCE Jaipur Vs Mevvar Bartan Nirman Udyog, in CA No. 3269/2003, the Hon'ble Supreme Court in their judgment dated 30.09.2008 held that "We may also point out at this stage that it is well settled position in law that ex....
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....urposes mentioned in the section. Therefore, presumably to achieve the two-fold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption given is made subject to a condition that the person claiming the exemption shall furnish a declaration form in the manner prescribed under the section. The liberal construction suggested will facilitate the commission of fraud and introduce administrative inconveniences, both of which the provisions of the said clauses seek to avoid." It can thus be seen that the submission namely that the dealer, even without filing a declaration, can later prove his case by producing other evidence, is also rejected. This ratio applies on all fours to the case before us. As already mentioned the concession can be granted only if the raw material is used in the industrial undertaking seeking such concession. For that a verification was necessary and that is why in the rule itself it is mentioned that a declaration has to be filed in Form 14 facilitating verification. Failure to file the same would automatically disentitle the Company from claiming any such concession. (Quoted with approval in the case of Indian Aluminiu....
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....s now settled by Constitutional Bench of Hon'ble Supreme Court in the case of M/s Dilip Kumar & Company [2018-TIOL-302-SC-CUS-CB] that in case of ambiguity the benefit of such ambiguity should be given to the revenue. The relevant paras of the said decision of constitutional bench of Hon'ble Supreme Court is reproduced as follows: "52. To sum up, we answer the reference holding as under- (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled." 4.4 In view of the above decision, we do not find any merits in the submissions made on this account. 4.5 On the issue of revenue neutrality, we observed that the impugned order categorically held as fo....
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....ee. Since the assessee is in appeal and if the exercise is Revenue neutral, then there was no need even to file the appeal. Be that as it may, if that is so, it is always open to the assessee to claim such a credit. 36. We, thus, do not find any merit in this appeal and dismiss the same with cost. 5.12 In this regard I am also placing reliance on the case of Shree Rainie Gums and Chemicals Pvt. Limited Vs. CCE Jaipur-II (2017(4) GSTL 340(Tri.-Del) Para 7 of the order passed by the Tribunal reads as follows:- 7. Before applying the principles of revenue neutrality, it is to be noted that the eligibility of credit to the appellant should be clearly established with supporting evidence. Further, the appellants' claim for refund of the said credit is subject to various conditions stipulated under Rule 5 of Cenvat Credit Rules, 2004 or Rule 18 of Central Excise Rules, (2002). We cannot record a categorical finding regarding the eligibility of the appellants for such benefits as these matters are not before for decision. As rightly contended by the Revenue that revenue neutrality as a concept will help the appellants to defend their case of bona fide belief against Service Ta....
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.... manufactured in a factory and used within the factory of production in or in relation to manufacture of final products. The said exemption has no application as the main appellant is not using the capital goods in the factory of manufacture. It appears that the manufacture is in the factory premises of NTPC. ....". In case of JBM Auto [2017 (357) E.L.T. 1107 (Tri. - Chan)] Chandigarh Bench has observed as follows: "7. We find that in this case the appellants have recovered the cost of tools and dies from M/s. Ashok Leyland Ltd. and M/s. Volvo India Pvt. Ltd. by raising debit notes. They also recovered sales tax by calculating Central Excise duty and treating the same as cum-duty price. However, they did not discharge Central Excise duty liability. Recovery of consideration in the form of debit notes and recovery of sales tax shows that effective sale has taken place. However, the goods have been retained by the appellants after their manufacture even though the ownership of the same was transferred to M/s. Ashok Leyland Ltd. and M/s. Volvo India Pvt. Ltd. The appellants raised invoices in their own favour (without discharging duty liability thereon) so as to give an impression....
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.... ownership of goods, free of cost supply and return of recovered scrap, etc., to arrive at the finding that there is no physical clearance or sale of goods and hence no duty liability. Clearance to FSNL through pipeline is an admitted fact. FSNL is a separate corporate entity having assigned factory premises of their own is also admitted. Sale for a consideration or ownership of goods are not relevant to decide Excise duty liability. The contractual arrangements to meet business needs do not take away the duty liability which may otherwise exist. FSNL have established a factory at a site provided by the appellant inside their factory premises as per contract agreement. The oxygen is cleared to FSNL and consumed by FSNL. The exemption contemplated under Notification No. 67/95 is available if inputs (here 'oxygen') manufactured in a factory is used within the factory of production. Oxygen produced by appellant is not used by appellants in their factory of production. The same is cleared to factory of FSNL and used by FSNL, though on behalf of appellant. We find the exemption as above cannot be extended in such situations. 4.8 Accordingly, we do not find any reason to hold contrary ....
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....said defence cannot therefore be accepted for want of factual substantiation. As regards the contention of the appellants that the SCN issued under Section 11A(1) would apply only to a situation where a duty payment is subsisting at the time of issue of notice and where no such outstanding duty liability exists at the time of issuing the SCN, we are of the view that a careful reading of Section 11A(1) does not allow such a construction to be put on the said provision. Inasmuch as Section 11A(1) gives power to the Central Excise Officer to serve a notice within a period of six months from the 'relevant date' from the date when non-levy/non-payment or short levy/short payment has occurred, we are of the view that so long as it is not in doubt that there has been an occurrance of non-levy/short levy/ or non-payment/short payment on the relevant date the pre-conditions for issuance of SCN under Section 11A(1) are fully met and notice validly issued. In the instant case there is no dispute that clearance of excisable goods on short payment of duty had taken place. The fact that the differential duty was subsequently debited (albeit voluntarily) by the assessee before the issue of SC....