TaxTMI 
TaxTMI 
2025 (1) TMI 304
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....nt of duty is not eligible for Cenvat Credit in terms of Rule 9(1)(b). He submits that admittedly the duty was paid in respect of goods supplied by their own unit by way of stock transfer therefore no sale of goods is involved. Rule 9(1)(b) is applicable only in respect of the transaction of goods for sale therefore on the ground of Rule 9(1)(b) Cenvat Credit was wrongly denied. He placed reliance on the following judgments:- • Commr. of C. Ex & Cus., Vadodara-II Vs. Indeos ABS Ltd - 2010 (254) ELT 628 (Guj.) • Commissioner of C. Ex. & Cus., Surat-II - 2013 (290) ELT 538 (Guj.)  Chiripal Polyfilms Ltd Vs. Commr. of C. Ex. & S.T., Vadodara-I - 2022(1) Centax 125 (Tri.-Ahmd) • Kansai Nerolac Paints Ltd Vs. Commr. of C. Ex. Ex., Ahmedabad-I - 2016 (339) ELT 467 (Tri.-Ahmd) • Commr. of C. Ex., Ahmedabad-II Vs. Reclamation Welding Ltd - 2014 (308) ELT 542 (Tri.-Ahmd) • Anglo French Textiles Vs. Commissioner of C. Ex., Puducherry - 2018 (360) ELT 1016 (Tri.-Chennai) • Accurate Chemicals Industries Vs. Commr. of C. Ex.,-Noida - 2014 (300) ELT 451 (Tri.-Del) • Commissioner of C.Ex., Noida Vs.....
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....y or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made thereunder with intent to evade payment of duty. Explanation. - For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under Section 3 of the Customs Tariff Act; or" From the plain reading of the above Rule 9(1)(b) it is clear that the restriction for Cenvat Credit provided in the Rule 9(1)(b) is applicable only in such cases where the transaction of input is of sale. In the present case admittedly the good were received by the appellant from their own unit therefore the transaction is not for sale but only stock transfer. It is also observed from the invoice copy that invoices for stock transfer and no VAT tax has been paid therefore in the present case transaction being of stock transfer and not of sale, Rule 9(1)(b) is not applicable and on that basis denial of Cenvat Credit is without authority of law. This issue has been cons....
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....he Tribunal on considering both the appeals accepted the argument of the assessee in so far as the demand made by the Commissioner of Central Excise, Bangalore and set aside the Order-in-Original No. dated 25-2-2005 passed by Commissioner of Central Excise, Bangalore. However, Tribunal confirmed the Order-in-Original of the Commissioner of Central Excise, Mysore dated 10-12-2004. CEA. 11/2006 is by the assessee assailing the order passed by the CESTAT in Appeal No. E/248/2005 (Final order 855/2005) dated 1-6-2005 and CEA 23/2005 is by the Revenue assailing the order of CESTAT passed in Appeal No. E/277/2005 (Final Order No. 856/2005 dated 1-6-2005). 10. It is seen from the order sheet of CEA 23/2005, dated 24-3-2006 that it was ordered to be posted along with CEA 11/2006. On 8-8-2006 both the appeals i.e., CEA 23/2005 and CEA 11/2006 were posted and it was submitted by the appellant-assessee (In CEA 11/2006) that appeal had been filed against the finding in para 9 of the order of CESTAT. As per the order sheet in CEA 11/2006 it is seen that both the appeals have been admitted on 7-11-2006. 11. The question of law raised in both the appeals are as follo....
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.... Raghavendra, learned counsel appearing on behalf of Sri. N.R. Bhaskar (standing counsel) for the revenue. RE: CEA 11/2006 13. As rightly pointed out by the learned counsel for the Revenue and as observed by us in preceding paragraph No. 10, this appeal is filed only against finding in para 9 of CESTAT order which raises only question for our consideration in this appeal viz., regarding invoking of extended period of Limitation i.e., question No. 3 formulated in CEA No. 11/2006 and accordingly substantial question of law No. 3 formulated herein above is considered and answered by us. It is contended by Sri. Shivadas, learned counsel for Assessee that assessee is a State Government Undertaking, whose accounts are audited by Government Agencies including a statutory audit by the Accountant General. It is contended that there was no intention to evade payment of duty and it was contended that assessee was adopting cost construction method of valuation for valuing the sandalwood oil and the method of accounting by raising the journal vouchers was adopted only for accounting purpose and book adjustment each year and since the accounts was kept open for perusal by the O....
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....s Ltd. v. Commissioner of C.Ex., Meerut, 2004 (165) E.L.T. 485 (S.C.) (11) Continental Foundation Jt. Venture v. Commr. of C. Ex., Chandigarh-I, 2007 (216) E.L.T. 177 (S.C.) (12) Tamil Nadu Housing Board v. Collector of Central Excise, Madras, 1994 (74) E.L.T. 9 (S.C.). 14. Per contra, Sri. Raghavendra, learned Advocate appearing on behalf of Sri. N.R. Bhasker, would contend u/sec. 4(1)(a) prescribes the assessable value would be "transaction value" in respect of each transaction provided the buyer and the seller being not connected. He contends that Sec. 4(1)(b) mandates that assessable value shall be determined as per Valuation Rules in respect of other transaction including the goods, which are not sold. He contends that Valuation Rules, 2000 have been introduced along with new Sec. 4(1)(b) i.e., transaction value and the appropriate Rule being Rule 8, which is applicable which mandates that excisable goods on stock transfer basis for home consumption, the value shall be 115% of the cost of production or manufacture of such goods and this having not been followed by suppression has resulted in invoking extended period of limitation which is....
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....23/2005 16. In support of his grounds urged in Appeal No. 23/2005 it is contended by learned counsel for appellant revenue, that Tribunal was not justified in allowing the appeal of the assessee by its order dated 1-6-2005 passed in Appeal No. 277/2005 (Final Order No. 856/2005) since Rule 7(1)(b) of Cenvat Credit Rules, 2002 does not allow the assessee to claim Cenvat credit since there is prohibition to avail the Cenvat credit particularly when the Tribunal by its order has confirmed the suppression of facts by the assessee and also confirmed the action of the department of invoking of longer period of limitation, as such the prohibition under Rule 7(1)(b) is itself inapplicable to the facts of the case and contends that the duty paid by the Mysore unit cannot be taken by the Bangalore unit under any other provision of Cenvat Credit Rules, 2002. It is further contended that assessee had collected the unpaid excise amount by way of increased MRP Maximum Retail Price on the rate of soaps from the consumers and having added the price in the sandalwood oil in the MRP and having collected the same from the consumers the evasion of the duty by Mysore unit has definitely result....
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....r payment of appropriate duty u/Sec. 4A of the Central Excise Act, 1944 on the basis of Maximum Retail Price (MRP) less permissible deductions. Provisions of Law (Section and Rules) 19. In order to appreciate the rival contentions raised by the learned counsel for the parties and for determining the substantial questions of law framed in these two appeals, it would be necessary to extract the relevant provisions of the Central Excise Act, Central Excise Valuation (Determination of Price of Excisable Goods) Valuation Rules, 2000, Cenvat Credit Rules, 2002 i.e., Section 4(1)(a), 4(1)(b), Rule 8 of Valuation Rules, 2000 and Rule 7(1)(b) of Cenvat Credit Rules 2002 respectively and they read as under : "Sec. 4(1)(b) of the Central Excise Act, 1944 - 4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer o....
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.... be accepted by him, and the interest payable thereon under Section 11AB and penalty equal to twenty-five percent. Of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice.] (2) (Central Excise Officer) shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined : [Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the provisions of Sections 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein : Provided further that, if such person has paid duty in part, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the p....
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....s short levied or was short-paid or was erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. Explanation 2. - For the removal of doubts, it is hereby declared that the interest under Section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may be determined by the Central Excise Officer, but for this sub-section. (2C) The provisions of sub-section (2B) shall not apply to any case where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. (3) For the purposes of this section - (i) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) "relevant date" means,- (a) in t....
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.... (b) A supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provision of Central Excise Rules, 2002 from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by or on behalf of the said manufacturer or importer, in case additional amount of excise duties or additional duty of customs leviable under Section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty become recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any provisions of the Act or of the Customs Act, 1962 or the rules made thereunder with intent to evade payment of duty. Findings CEA. 11/2006 20. The issue viz., the substantial questions of law raised in CEA. 11/2006 is taken up first since the issue regarding invoking the longer period of limitation has been raised in the said appeal. The said question r....
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....nt of certain officers of the assessee Company u/Sec. 14 of the Central Excise Act, it was noticed by revenue that Deputy General Manager of the assessee factory at Mysore had admitted that assessable value of oil was arrived on the basis of production + 15% of profit and had submitted the cost construction sheet to the department on 18-8-2000 and not there after wards though there was escalation in the price of sandalwood oil. On the basis of the said cost construction sheet duty had been paid on the inter unit assessable value of Rs. 6,859/- per kg. of sandalwood oil upto November 2003, though there was an increase in the cost of product from the year 2001 itself. In fact it was admitted by the said Officers, the increase in the cost price was not disclosed to the Department though a minor percentage of oil was sold to other customers at Mysore for a higher price. 24. Rule 6 of Central Excise Rules requires an assessee to assess the duty payable on any excisable goods before its removal from factory of manufacture. The assessment of excisable goods is dependant on provisions of Section 4(1)(a) or Section 4(1)(b) of the Central Excise Act, 1944, as the case may be. In cas....
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....00, w.e.f. 1-7-2000, it was clarified by the Board vide Circular No. 354/81/2000-TRU dated 30-6-2000 (para 21) that for valuing goods which are captively consumed, the general principles of costing would be adopted for applying Rule 8. The Board has interacted with the Institute of Cost & Works Accountant of India (ICWAI) for developing costing standards for costing of captively consumed goods. (2) The Institute of Cost & Works Accountants of India {ICWAI} has since developed the Cost Accounting Standards, CAS 2, 3 and 4, on capacity determination, overheads & cost of production for captive consumption, respectively, which were released by the Chairman, CBED on 23-1-2003. (3) It is, therefore, clarified that cost of production of captively consumed goods will henceforth be done strictly in accordance with CAS-4. Copies of CAS-4 may be obtained from the local Chapter of ICWAI. (Emphasis supplied by us) (4) Board's Circular No. 258/92/96-CX dated 30-10-96, may be deemed to be modified accordingly so far as it relates to determination of cost of production for captively consumed goods. (5) This Circular may be brought to the notice of the f....
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....t for calculation of value of the goods captively consumed under Rule 6(b)(ii) the following steps are to be followed :- (i) The cost of production of the goods has to be determined so as to include inter alia, the cost of material, labour cost and overheads including administrative cost, advertising expenses, depreciation, interest, etc. (ii) Profit before tax has to be taken from audited balance sheet of the previous year and the profit margin has to be calculated as a percentage of cost of production in the previous year as per the formula prescribed by the Cost Accounts Branch of Department of Expenditure (copy enclosed). (iii) The profit margin of the previous year as arrived at step (ii) as a percentage of cost of production has to be loaded to the cost of production of the impugned goods derived at (i) above for the current year to arrive at the assessable value of captively consumed goods. C.A. certificate and the loss and profit statement should be scrutinised carefully, in the light of these guidelines and should not be accepted blindly or automatically. 4.....
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....hod of valuation of oil was worked out for Indian variety and Australian variety only for the purpose of balance sheet: he would also vehemently submit that journal Vouchers were prepared at Mysore Unit showing the difference in values between the value adopted for payment of duty on sandalwood oil and the actual value sent to Bangalore unit and this procedure was adopted only for accounting purposes and book adjustment each year and all these records having been kept open for perusal of the officers of department and audit parties and hence, this cannot be held to be suppression of facts relating to actual cost of production of final products and they have not evaded duty intentionally. 27. Section 4(1)(a) of the Central Excise Act prescribes that assessable value shall be the transaction value pertaining to each transaction provided goods are sold at the time of place of removal and buyer and assessee are not related and price is the sole consideration for such sale. This situation does not arise in the instant case. In respect of other transaction, where the goods are not sold the assessable value shall be determined as per Valuation Rules, 2000. as contemplated u/Sec. ....
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....year and even otherwise any commercial transaction tends to get costlier by specified margin from year to year. 29. It is to be noticed by us from the statements made by the Officers of the respondent, it is admitted that the assessable value adopted for purpose of payment of duty by the assessee was not in accordance with the provisions of Sec. 4(1)(b) r/w. Valuation Rules, 2000. 30. It has to be further noticed that manufacturers of Central Excisable Goods are under self removal and self-assessment regulation including the assessee. The assessee is liable at the time of manufacture and clearance of goods to pay the duty on such self declaration. Though assessee was fully conscious of the fact of adopting the cost construction method of valuation of the goods for the period March 2001 to August 2003 has accepted its lapses and without any whisper have paid the differential duty along with interest. 31. The concept of transaction value has admittedly came into effect from 1-7-2002 when correspondingly Section 4(1)(b) came into effect, which was brought into force to facilitate the manufacturers to correctly adopt the value, which was in the form of Valuat....
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....iberate, then it is not in the realm of inaction of the assessee but with the objective of a gain, which in other words would be conscious withholding of the information...." (emphasis supplied) 33. The learned counsel appearing for the assessee would contend that the decision rendered by their Lordship's in Amco Batteries, Mahindra's and Mahindra and Narmada Chematur Pharmaceuticals Ltd. referred to supra is fairly applicable to the facts of the present case. As also the decision of Continental Foundation, Bharat Electronics and Tamil Nadu Housing Board. The propositions laid down in the said judgments cannot be disputed. However, it has to be seen whether the same would be applicable to the facts of the present case. In the decisions referred to above it has been held as follows - (a) Amco Batteries - In the said case regular books of accounts and proper documentation was maintained. (b) Mahindra & Mahindra's case - It has been held in para 4 to the following effect- there can be number of eventualities where extended period of limitation in terms of proviso Sec. 11A may be available to the depart....
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....in the instant case the assessee being aware about the determination of price ought to have filed the price classification list and as such it was accepted in the statement recorded u/sec. 14 of the Central Excise Act, which has not been retracted. Hence, the said judgment is not applicable to the facts of the present case. (e) Tamil Nadu Housing Board's case :- In the said judgment the issue which was under consideration with regard to invocation of proviso u/sec. 11A in a case where there was scope for doubt whether the case of duty was made out or not and accordingly it was held that the extended period of limitation cannot be invoked. 36. In the said case there were two units of assessee viz., concrete unit and wood products unit and on the basis of the advice given by the Excise Department the license for wood products unit was not taken and license had been taken only for concrete unit and as such it was held that revenue was not justified in invoking the extended period of limitation. However, in the instant case we find that the question of any advice by the department did not arise and it has been found by the Assessing Officer tha....
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.... payment of duty. In order to apply the embargo provided under above rule and deprive the assessee of availing Cenvat credit there should be sale. The documents referred to in Rule 7(1)(b) are illustrative in nature which would demonstrate that duty has been paid or evidencing paying of duty. Admittedly in the instant case TR-6 challan are produced by Mysore Unit to evidence payment of duty the Tribunal on careful examination & scrutiny of Rule 3 and Rule 7(1)(b) has held as follows : "A very careful reading of the above rules shows that the bar for availment of credit on supplementary invoices would operate only when the additional amount of duty becomes recoverable from the manufacturer on account of non levy or short levy by reason of fraud, collusion or any wilful mis-statement or suppression of facts etc. Further, the prohibition to avail credit on supplementary invoices will operate only in the case of sale. In other words the receiver of the input should have purchased the goods from the manufacturer who had to pay the additional amount of duty after detection of suppression of facts fraud, etc., on his part. Therefore, when there is simply a stock transfer....
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....side the impugned judgment of the Tribunal which has held that Rule 57CC of the 1944 Rules is not applicable to this case as there was no "sale". In cases where the manufacturer does not comply with Rule 57CC(9), he shall debit the presumptive sum equal to eight per cent of the value of the exempted goods at the time of clearance from the factory gate. This rule would apply to stock transfers also. In the said judgment it has been held in paragraphs 15 and 16 by their Lordships to the following effect : "15. Under Section 4(1)(a) normal price was the basis of the assessable value. It was the price at which goods were ordinarily sold by the assessee to the buyer in the course of wholesale trade. Under Section 4(1)(b) it was provided that if the price was not ascertainable for the reason that such goods were not sold or for any other reason, the nearest equivalent thereof had to be determined in terms of the Valuation Rules, 1975. Therefore, Rule 57CC has to be read in the context of Section 4(1) of the 1944 Act, as it stood at the relevant time. Section 4(1)(a) equated "value" to the "normal price" which in turn referred to goods being ordinarily sold in the course....
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....e and said additional duty paid cannot be taken for purposes of extending CENVAT credit. It is to be seen that CENVAT credit in the instant case is granted under Rule 3 of CENVAT Credit Rules & it reads as under : Rule 3. CENVAT credit :- (1) A manufacturer or producer of final products shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of - (i) The duty of excise specified in the First Schedule to the Tariff Act, leviable under the Act; (ii) The duty of excise specified in the Second Schedule to the Tariff Act, leviable under the Act; (iii) The additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978); (iv) The additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (v) The National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001), as ....
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.... to the CENVAT credit taken on capital goods if such capital goods are removed as such; or (d) an amount under sub-rule (2) of rule 16 of Central Excise Rules, 2002.] Provided that while paying duty, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month for payment of duty relating to the month. Provided further that the CENVAT credit of the duty paid on the inputs used in the manufacture of final products cleared after availing of the exemption under the notification numbers 32/99-Central Excise, dated the 8th July, 1999 [G.S.R. 508(E), dated the 8th July, 1999] and 33/99-Central Excise, dated the 8th July, 1999 [G.S.R. 509(E), dated 8th July, 1999] shall be utilized only for payment of duty on final products cleared after availing of the exemption under the said notification numbers 32/99-Central Excise, dated 8th July, 1999 and 33/99-Central Excise, dated the 8th July, 1999. [Provided also that the CENVAT credit of the duty paid on the inputs used in the manufacture of final products cleared after availing of the exemption under the notifications No. 39/2001-Central....
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....t or capital goods, the provisions of such other rule or notification shall prevail over the provisions of these rules. 40. We are of the considered opinion that Rule 7 is illustrative in nature and it cannot place any fetters on Rule 3. The additional duty has been paid under re-assessment or on being detected by the department and such duty paid is available as credit under Rule 3 of CENVAT Credit Rules to the assessee & it cannot be allowed to be whittled down by Rule 7(1)(b). Thus, principles enunciated in Ballarpur Industries would be inapplicable to the facts of the case. The Commissioner while passing the Order-in-Original has accepted that there has been no loss of revenue to the Government. In paragraph 15 of the Order-in-Original dated 25-2-2005 it is held as follows : "However, I find some force in the defence plea that there was no loss of revenue to the department since whatever duty paid by their Mysore unit is admissible as cenvat credit, but for the reason discussed in the earlier paragraph. It is also relevant to note that there is no allegation of any suppression of any facts, made against the assessee and the credit taken on the supplementary in....
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....udgment has been upheld by the Hon'ble Karnataka High Court reported at Karnataka Soaps and Detergents Limited Vs. Commissioner of Central Excise Mysore - 2010 (258) ELT 62. In the above judgments though the issue relates to Rule 7(1)(b) but the Rule 7(1)(b) and Rule 9(1)(b) is very same to each other. Therefore the judgment is directly applicable in the present case also. Similar issue has considered by this tribunal in the case of Essar Oil Limited Vs. Commissioner of Central Excise Rajkot-II reported as 2014 (303) ELT 255 wherein following judgment was passed: "This appeal has been filed by the appellant M/s. Essar Oil Ltd. against O-I-O No. 19/Commissioner/2010, dated 12-5-2010, under which a Cenvat credit of Rs. 3,15,85,715/- has been denied to the appellant, along with recovery of interest, under Rule 14 of Cenvat Credit Rules, 2004. A penalty of Rs. 3,15,85,715/- has also been imposed upon the appellant and a redemption fine of Rs. 50 lakhs has been imposed with respect to capital goods with respect to which differential Cenvat credit was taken. 2. Brief facts of the case are that DRI in the year 1999 investigated a case against the appellant regarding impo....
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....eived by the DRI, Ahmedabad indicated that the noticee has availed the Cenvat credit in respect of the differential duty paid by them pertaining to the case booked by the DRI and that the said availment of Cenvat credit was in contravention of Rule 9 of Cenvat Credit Rules, 2004. 2.3 Accordingly, investigation was initiated by DRI, Ahmedabad and a show cause notice was issued to the appellant. After following the principles of natural justice the case was decided against the appellant under Order-in-Original dated 12-5-2010 against which the present appeal has been filed. 3. Shri V.K. Jain (Adv.) appearing on behalf of the appellant during the course of hearings, as well as in the written submissions dated 24-12-2013, broadly made the following arguments :- (i) That the present case is one of re-assessment and differential duty paid later which has to be considered as payment of duty with respect to Bill of Entry under reassessment as held by CESTAT Delhi in the case of Birla Jute Manufacturing Co. Ltd. v. CC, Calcutta [1984 (15) E.L.T. 179 (Tribunal)] and credit admissible for the CVD paid on such challan as per case law of CCE, Raipur v. Amb....
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....ding time bar, it was argued that as per their letter dated 27-12-1999 and 17-2-1997 appellant filed the required declarations under Rule 57(5)(7) of Cenvat Credit Rules, 2004 as per C.B.E. & C. Circular No. 88/88/94-CX, dated 26-12-1994. That the amount of credits taken with respect to capital goods were also duly reflected in the periodical returns filed with the field formation. It was thus argued that as per Apex Court's Order in the case of CCE v. Champhar Drugs & Liniments [1989 (40) E.L.T. 276 (S.C.)], extended period is not applicable. Appellant's Advocate made the Bench go through the relevant Paragraph 8 of the said judgment. (vii) That as the credit of differential CVD paid was correctly availed, the confiscation and redemption fine was wrongly adjudicated by the adjudicating authority. 4. Shri S.K. Mall, (AR) appearing on behalf of the Revenue during the course of hearing and vide written submissions, inter alia, made the following submissions : (i) That it was held by Hon'ble Supreme Court in the case of the appellant [2004 (172) E.L.T. 433 (S.C.)], that Rs. 36.25 crores duty paid by appellant, with respect to import of capital goods, w....
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....Appellant filed 84 ex-bond Bills of Entry in February, 1999 for assessment. The assessment was completed and TR-6 challans were prepared between 18-2-1999 to 23-2-1999. The rate of CVD applicable at the time of assessment was 10% ad valorem. As per the Union Budget presented on 27-2-1999, the duty structure on impugned capital goods under project imports was increased from only 10% CVD to 5% Basic Customs Duty + 10% of Customs Duty as surcharge + 10% CVD. The cheques provided by the appellant could be encashed only on 17-3-1999, due to insufficient balance in appellant's bank account, when higher rate of duty was applicable after the Union Budget presented on 27-2-1999. CVD initially paid @ 10% was Rs. 60,03,13,422/-. Though there was no change in the rate of duty of CVD under Budget presented on 27-2-1999 but due to imposition of 5% Basic Customs Duty + 10% Surcharge on Basic Customs Duty, CVD element got enhanced to Rs. 3,15,85,715/- as a result of case earlier made by DRI against the appellant which culminated in the final order passed by the Apex Court. This differential duty was also paid in 1999. In November, 2007, after the refinery of the appellant commenced production, Cen....
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....acturer or importer, in case additional amount of excise duties or additional duty leviable under Section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made thereunder with intent to evade payment of duty. Explanation. - For removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under Section 3 of the Customs Tariff Act; or (c) a bill of entry; or (d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post Office; or (e) a challan evidencing payment of Service Tax by the person liable to pay Service Tax under sub-clauses (iii), (iv), (v) and (vii) of clause (d) of sub-rule (1) of Rule (2) of the Service Tax Rule....
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....ing imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of such imported goods, indicate on the invoice issued by him that no credit of the additional duty levied under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 shall be admissible. Explanation. - For the purposes of this rule, "first stage dealer" and "second stage dealer" shall have the meanings assigned to them in Cenvat Credit Rules, 2002." A combined reading of Rule 11(3), Rule 11(7) of Central Excise Rules, 2002 and Rule 9(a)(ii) of the Cenvat Credit Rules, 2004 will convey that in case of sale of imported goods by a first stage dealer or second stage dealer also the credit is admissible on the basis of such a sale invoice. A similar situation will exist for supplementary invoice issued by a first stage dealer/second stage dealer under Rule 9(1)(b) of Cenvat Credit Rules, 2004. The word 'Challan' and 'any other similar document' evidencing payment of additional CVD, mentioned in E....