TaxTMI 
TaxTMI 
2024 (10) TMI 894
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....se Appeal No. 2953 of 2010 has been filed by Vinay Agarwal to assail that part of the order dated 17.05.2010 passed by the Commissioner that imposes a penalty of Rs. 20,00,000/- on him as partner of Amarnath Industries under rule 26 of the Central Excise Rules 2002 [the Central Excise Rules]. 3. Excise Appeal No. 2954 of 2010 has been filed by Manish Jain to assail that part of the order dated 17.05.2010 passed by the Commissioner that imposes a penalty of Rs. 20,00,000/- upon him as partner of Amarnath Industries under rule 26 of the Central Excise Rules. 4. The appellant is a manufacturer of Mentha Products namely Menthol Crystal, Menthal Powder, Menthal Solution, Pepper Mint Oil, Menthone, Terpene Distilled Fractionated Piperita Oil, Distilled Fractionated Mentha Oil, Distilled Fractioned Spearmint Oil. The main raw materials used in the manufacture of these products are curde Mentha Oil, Crude Mentha Oil Shivalik, Crude Tymol Oil, Crude Spearmint Oil, Crude Piperita Oil, Crude Lemon Grass Oil and Crude Peppermint Oil. They shall collectively be referred to as Crude Mentha Oils. The appellant procured the raw materials from the manufacturers/ producers in the State of Uttar ....
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..... The Commissioner, however, confirmed the demand proposed in the show cause notice. 8. To support the contention that the appellant undertook manufacturing process of freezing, the appellant has stated the following facts in the appeal. 9. The factory premises of the appellant were searched by the department on 23.06.2006. During the search, the officers found the following plant and machinery installed in the factory premises: (a) 6 Flakes machine (b) Compressors Chllers/Freezer (c) 1 Melting Tank (d) 8 Centrifugal Machines (e) 3 fractional distillation columns with 3 tanks and 1 boiler. 10. The following machines were also found to be installed in the appellant's factory premises: Serial No. Details of Plant and Machinery Quantity 1. Flack Machine with 2 open type compressor glycol tanks. 1 2. Flack Machine with 3 open type compressor glycol tanks. 1 3. Flack Machine Compressor 2 4. Centrifugal 8 5. Cutter Machine Manual 1 6. Fractional and Distillation Column 1 7. Vacuum Pump with Motor 1 8. Sealing Tower 1 9. Melting tank with pump heater and diesel burner 1 10. Centrifugal base and pipe line fo....
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....40) E.L.T. 67 (P & H)]; (d) Additional Director General (Adjudication) vs. Its My Name Pvt. Ltd. [2021 (375) E.L.T. 545 (Del.)]; (e) Swiber Offshore Construction Pvt. Ltd. vs. Commr. of Cus., Kandla [2014 (301) E.L.T. 119 (Tri. - Ahmd.)]; and (f) Gaurav Mungad vs. Commissioner of CGST, Ex. & CUS., Bhopal [2021 (376) E.L.T. 69 (Tri. - Del.)]. (vii) The extended period of limitation could not have been invoked in the facts and circumstances of the case; (viii) Interest and penalty under section 11AC of the Central Excise Act could not have been levied; and (ix) The imposition of penalty under rule 26 of the Central Excise Rules 2002 [the 2002 Rules] on the Directors of the appellant bad in law. 13. Shri Mihir Ranjan Kumar, learned special counsel appearing for the department, however, supported the impugned order and made the following submissions: (i) The request for cross examination was denied for good and valid reason. The departmental officers merely verified the facts that had been declared by the appellant in the statutory records submitted from time to time. As there was no reason to doubt the genuineness of test reports/analysis reports, the reque....
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....33/99-C.E., dated 8-7-99, (ii) Even otherwise, the Revenue could not take recourse to Section 11A of the Act when it had a statutory remedy available to it to challenge the order dated 29-4-2002 passed by the Assistant Commissioner of Central Excise, Silchar by resorting to the revisional power available under Section 35-E of the Act." 18. Learned counsel for the appellant also submitted that once duty paid by the appellant was accepted by the department, the CENVAT credit of the same could not have been denied to the appellant who is the recipient. 19. The payment of duty at the time of clearance of goods to the appellant is not in dispute. The credit of the duty paid, therefore, could not have been denied to the appellant. This issue was examined by the Bombay High Court in Nestle India. The issue that arose was that if excise duty is levied on an assessee at place "A" and Modvat credit is sought to be availed at place "B", is it open to the Authorities at place "B" to deny credit on the ground that no duty was payable at place "A". This issue was answered by the Bombay High Court in the following manner: "5. Mr. Ferreira, learned Assistant Solicitor General for the a....
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.... the department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue." (emphasis supplied) 21. In view of the aforesaid decisions, it has to be held that CENVAT credit of the duty paid could not have been denied to the appellant. 22. Learned counsel for the appellant also submitted that the statement of various persons like Employees/Directors of the appellant were relied upon though they were inadmissible since they failed to comply with the provisions of section 9D of the Central Excise Act and denial of cross examination of the said persons has also vitiated the order. 23. This submission advanced by learned counsel for the appellant also deserves to be accepted. 24. The Allahabad High Court in Parmarth Iron examined this issue in detail and on a perusal of section 9D of the Central Excise Act observed: "16. We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of....
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....as proving the truth of the contents thereof is concerned, is, therefore, completely lost, unless and until the case falls within the parameters of Section 9D(1). 12. The consequence would be that, in the absence of the circumstances specified in Section 9D(1), if the adjudicating authority relies on the statement, recorded during investigation in Central Excise, as evidence of the truth of the facts contained in the said statement, it has to be held that the adjudicating authority has relied on irrelevant material. Such reliance would, therefore, be vitiated in law and on facts. xxxxxxxxxxx 19. Clearly, therefore, the stage of relevance, in adjudication proceedings, of the statement, recorded before a Gazetted Central Excise Officer during inquiry or investigation, would arise only after the statement is admitted in evidence in accordance with the procedure prescribed in clause (b) of Section 9D(1). The rigour of this procedure is exempted only in a case in which one or more of the handicaps referred to in clause (a) of Section 9D(1) of the Act would apply. In view of this express stipulation in the Act, it is not open to any adjudicating authority to straightaway re....