TaxTMI 
TaxTMI 
2025 (3) TMI 779
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....untervailing duty' (hereinafter "CVD") paid on the imported capital goods. I. Factual Background 3. The Petitioner is a company engaged in manufacturing and sale of craft paper. It was established in the year 2000 and started manufacturing activities in the year 2002. Until 2014-15, the Petitioner was engaged in manufacturing of writing and printing paper as also news print. However, thereafter it started manufacturing craft paper. In respect of the said manufacturing, certain capital goods i.e., plant and machinery were imported by the Petitioner during the years 2004-07 at a concessional rate of duty of only 5% in terms of the Customs Notification No. 97/2004-Cus dated 17th September, 2004. 4. In order to import the said capital goods, the Petitioner procured nine licenses/authorizations under the Export Promotion Capital Goods Scheme (hereinafter "EPCG authorizations"). The permission to import the said goods was on the condition that the Petitioner would utilize the imported plant and machinery and complete export obligations within a period of eight years, extendable by a further two years. The details of the said EPCG authorizations are as under: Export Obli....
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.... the amount of Rs. 82,01,100/- (31,71,143/- as duty + 50,29,957/- as interest) paid by the Applicant may be accepted as the full and final payment of duty and interest thereon. 2. Applicant may be allowed to avail CENVAT Credit of Rs. 23,18,633/- paid towards CVD against the import of capital goods. 3. That the proposal for confiscation of imported goods under sections 111 (o) of Customs Act may be dropped. 4. That the penal proceedings initiated under sections 112 (a) and 112 (b) of the Customs Act may be dropped. 5. That immunity from prosecution for offences, if any, committed under the Customs Act or under any other law for the time being in force may be provided. 6. That Hon'ble Commission may provide any other relief, deemed fit, in the facts and circumstances of the case." 7. The Settlement Commission vide the impugned Final Order, considered the settlement application of the Petitioner, and accepted the payment of differential duty as also the interest in respect of import of the capital goods. The Settlement Commission did not direct confiscation of the said capital goods, however, penalty of Rs. 4,00,000/- was imposed. F....
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.... v. Philips India Ltd., 2006 SCC OnLine Guj 460. 11. Reliance is also placed upon a Circular No. 199/33/96-CX dated 23rd April, 1996 issued by the Central Board of Excise & Customs (hereinafter "CBIC") as per which, it is clarified that the time limit of six months for claiming credit under the second proviso of Rule 57-G of the Central Excise Rules, 1944 would not apply to the availing of credit on capital goods under Rule 57T of the Central Excise Rules, 1944. 12. On the other hand, Mr. Akshay Amritanshu, ld. Senior Standing Council appearing for the CBIC submits that the Petitioner is not eligible to avail the CENVAT Credit for CVD as the differential customs duty was ultimately deposited along with interest in much later in 2018. 13. It is submitted that on the date when the differential duty was paid, Rule 4 of the CENVAT Rules stood amended vide notification dated 11th July, 2014 and credit could be claimed only within a period of one year from the date of issue of any documents mentioned in Rule 9 (1) of the said Rules. The Settlement Commission is, therefore, right in rejecting the claim for CENVAT Credit as being time barred. 14. Reliance is also placed by the ....
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....vice or outside the factory of the manufacturer of final products for generation of electricity for captive use within the factory or in the premises of the job worker, in case capital goods are sent directly to the job worker on the direction of the manufacturer or the provider of output service, as the case may be, at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent. of the duty paid on such capital goods in the same financial year: PROVIDED that the CENVAT credit in respect of capital goods shall be allowed for the whole amount of the duty paid on such capital goods in the same financial year if such capital goods are cleared as such in such financial year; PROVIDED FURTHER that the CENVAT credit of the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, in respect of capital goods shall be allowed immediately on receipt of the capital goods in the factory of a manufacturer: PROVIDED ALSO that where an assessee is eligible to avail of the exemption under a notification based on the value of clearances in a financial year, the CENVAT credit in respect of capital....
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....ein below: "6. At the outset, we must note that none of the appellants has challenged d the validity of the said proviso, therefore, we will have to proceed on the basis that the proviso in question is a valid one. In that background, the sole question that we will have to consider will be: whether the proviso to the Rule in question is applicable to the cases of manufacturers who had received their inputs prior to the introduction of the said proviso and are seeking to take credit in regard to the said inputs beyond the period of six months. 7. Having heard the arguments of the parties and after considering the Rule in question, we think that by introducing the limitation in the said proviso to the Rule, the statute has not taken away any of the vested rights which had accrued to the manufacturers under the Scheme of MODVAT. That vested right continues to be in existence and what is restricted is the time within which the manufacturer has to enforce that right. The appellants, however, contended that imposition of a limitation is as good as taking away the vested right. In support of their argument, they have placed reliance on a judgment of this Court in Eicher ....
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.... which in effect questions the validity of the Rule, cannot be permitted to be raised. The argument of the appellants that there was no time whatsoever given to some of the manufacturers to avail the credit after the introduction of the Rule also is based on arbitrariness of the Rule, and the same also will have to be rejected on the ground that there is no challenge to the validity of the Rule. 9. Without such a challenge, the appellants want us to interpret the Rule to mean that the Rule in question is not applicable in regard to credits acquired by a manufacturer prior to the coming into force of the Rule. This we find difficult because in our opinion the language of the proviso concerned is unambiguous. It specifically states that a manufacturer cannot take credit after six months from the date of issue of any of the documents specified in the first proviso to the said sub-rule. A plain reading of this sub-rule clearly shows that it applies to those cases where a manufacturer is seeking to take the credit after the introduction of the Rule and to cases where the manufacturer is seeking to do so after a period of six months from the date when the manufacturer received t....
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....s held that no restriction in time limit, fixed for taking credit in respect of capital goods could be found by them. The reliance of the Commissioner upon the decision of the Hon'ble Tribunal in the case of MRF Ltd. v. CCE, Madras reported in 1996 (88) E.L.T. 222 and associated Flexible & Wires Pvt. Ltd. v. Commissioner of Central Excise and Customs, Pune reported in 1995 (78) E.L.T. 292 is misplaced since these decisions appear to relate to credit on inputs and not on capital goods, as is the case herein. The decision in the case of Surya Prabha Mills Ltd. v. CCE, Coimbatore (supra) was therefore required to be followed by the Commissioner. The Commissioner's findings in this regard are therefore to be set aside. [...] (k) The appellants have pleaded that the impugned order traverse beyond the Show Cause Notice inasmuch as the Commissioner has held that the appellants have not mentioned anywhere in the reply during the personal hearing that the imported plant installed are in use and that the appellants have not claimed the benefit of the depreciation. A perusal of the Show Cause Notice does not reveal any such allegation as regards depreciation. The Cha....
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....nsidering a case where certain ceramic tiles had been imported and due to the products being sold higher than the MRP, a show cause notice was issued demanding differential duty and penalty. At the time of the import, the company had paid the basic customs duty, the CVD and Education Cess. The company preferred an application before the Settlement Commission and at that stage, the company admitted duty liability along with interest. The company also sought adjustment of CVD paid at the time of import and CENVAT Credit paid as service tax. The Settlement Commission remanded the issue relating to CENVAT Credit to the Jurisdictional Commissioner. This was challenged by the company before this Court. The Court followed the earlier decision in the case of same company wherein the Settlement Commission had taken a contrary view and held that a substantive right could not be denied due to procedural irregularities. Accordingly, the Settlement Commission had permitted CENVAT Credit adjustment of the CVD amount paid. The Court held that the right to CENVAT Credit accrues on the same day when the inputs are received and the tax is paid on the same. It also held that Rule 4 (1) of the CENVAT ....
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....ion. The Commission imposed the duty liability and granted immunity from prosecution and penalty. After paying the duty, the Petitioner claimed the amount as CENVAT Credit. The Department took the position that no credit is available when there was wilful misstatement of facts under Rule 9 (1) (b) of the Rules. The CENVAT Credit was finally disallowed by the adjudicating authority and interest was also imposed. The appeals before Commissioner and the CESTAT were dismissed and the order of the Adjudicating Authority was upheld. The Appellant therein appealed before the Madras High Court which in these facts observed as under: "16. The provision of Chapter XIVA of the Customs Act, 1962, providing for settlement of disputes by the Settlement Commission is an independent Code and while it is provided to enact a remedial forum for putting an end to disputes in a quicker and more peaceful manner, it gives several advantages to the Assessees and the disputing parties mainly in the form of immunity from penalty and prosecution, which rigor of law would have been otherwise applicable to the Assessee besides the determination of disputed amount of duty under the provisions of the Ac....
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....of the Cenvat Credit Rules, 2004, prohibits the credit of excise duty or customs duty in case the same has been paid and recovered from the Assessee on account of earlier non-levy or short-levy, by reason of fraud, collusion, wilful misstatement or suppression of facts, also has considerable force. 20. The contents of the Show Cause Notice in the present case, would clearly reveal that the case of the Revenue against the Assessee in the said Show Cause Notice was that of misstatement of facts and suppression of facts as well as misrepresentation of the assessable value of the goods to the extent of Rs. 49,02,861/-, which was declared only at Rs. 13,93,827/-. Merely because the said Show Cause Notice did not result in any Final Order at the instance of the Assessee itself, it does not mean that there was no case of fraud or misrepresentation or wrong declaration on the part of the Assessee. Therefore, even on the applicability of Rule 9 (1) (b) of the Cenvat Credit Rules, 2004, we find that the denial of Cenvat Credit to the Assessee in the present case independently was also justified. 21. Viewed from any angle, we do not find any merit in the contention raised by....
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....ter the investigation was started, the Petitioner tendered the said amount in order to avoid prosecution and approach the Settlement Commission. The confiscation of goods also could not also take place as the goods were no longer available for confiscation which is clearly captured in the order of the Settlement Commission. The relevant paragraph of the order is set out below: "Fine: As the goods in respect of past imports to which confiscation has been proposed in the SCN, are not available for confiscation, the Bench refrains from ordering confiscation of the same or imposing any fine in lieu of confiscation in accordance with law." 32. Further, it is noted that the Settlement Commission has clearly observed that had the investigation not been initiated the fraud on part of the Petitioner would never have been detected. Accordingly, the Settlement Commission has found the Petitioner liable for penal action under the provisions of the Act invoked in the SCN. The relevant portion of the impugned order is as under: "(ii) The Bench finds Customs Notification 97/2004-Cus dated 17.09.2004 as amended is a conditional Notification and condition no (4) of the said Not....