TaxTMI 
TaxTMI 
2025 (12) TMI 1313
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....re registered with Central Excise and were availing CENVAT credit; on many occasions, the appellants have sold CR/HR sheets as it is without subjecting to any process of manufacture; while clearing the CR/HR sheets, the appellants were paying duty on the transaction value. Revenue, however, was of the opinion that as the raw material was not subjected to any process and was cleared as such, the appellants were required to reverse CENVAT credit availed on such inputs. Revenue further entertained an opinion that when the appellants cleared inputs as such a higher price, paying duty in cash or through CENVAT credit, they were passing on excess paid duty, i.e. difference between CENVAT credit reversible under Rule 3(5) of CCR, 2004 and the duty....
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...., 2004. He further submits that the quantification arrived at by the Department was also incorrect as the same is calculated on the basis of average prices of purchases and sales whereas in terms of Rule 3(5), exact amount of CENVAT credit availed has to be reversed on each of such clearances; Revenue has not even followed the First-in-First-Out Principle. The show cause notice itself accepts that there was excess payment than the CENVAT credit reversible in some cases; therefore, it is clear that the appellants have paid more duty of Rs.49,64,082/-. 3. Learned Counsel further submits that the appellants were under a bona fide belief that the processes undertaken by them in cutting/ shearing the sheets amounted to manufacture; as stated ....
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....nd that other than the bland averment as above, Revenue did not produce any evidence to substantiate the allegation of intent to evade payment of duty. In the facts and circumstances of the case where the appellant has been alleged to have paid excess duty in some cases and pocketed the same by passing on the same to the customers and paid less duty in some cases, intent to evade payment of duty is not established. In fact, the appellants claim that they have effectively paid more duty to the tune of Rs.49,64,082/- stands as an impregnable defense to the claim of absence of mens rea. Moreover, it is not the case of the Department that the appellants have not been filing ER-1 Returns. When the appellants were filing the ER-1 Returns, it is n....
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....r sub-rule (1) of rule 6 of the Central Excise Rules, 2002 (the Rules) that the assessee is expected to self-assess the duty and sub-rule (3) of rule 12 of the Rules provides that the proper officer may, on the basis of information contained in the return filed by the assessee under sub-rule (1), and after such further enquiry as he may consider necessary, scrutinize the correctness of the duty assessed by the assessee. Sub-rule (4) of rule 12 also provides that every assessee shall make available to the proper officer all the documents and records for verification as and when required by such officer. Hence, it was the duty of the proper officer to have scrutinized the correctness of the duty assessed by the assessee and if necessary call ....
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....mmendation of units for detailed scrutiny and to carry out detailed scrutiny as per guidelines/instructions contained in Return Scrutiny Manual. 2.2 Cases of default in duty payment discovered through ER-1/ ER-2/ER-3 Returns To enter the details of default in the register and submit report to the Range Officer. To verify the default cases, as reported by the Sector Officer, and initiate recovery proceedings. He will also furnish the report of defaulters to AC/DC. Further, in case of default for more than 30 days, the RO has to enforce the provisions contained in sub-rule 3(A) to Rule 8 of CER, 2002. 2.3 Completion of scrutiny of returns. Each Return, selected for detailed scrutiny, to be endorsed that the same has been ....
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....thus evident that not only do the Rules mandate officers to scrutinize the Returns to verify the correctness of self-assessment and empower the officers to call for documents and records for the purpose, Instructions issued by the department also specifically require officers at various levels to do so. 26. If the scrutiny by officers reveals short payment or non-payment of duty, a demand can be raised under section 11A. As per section 11A of the Excise Act, the relevant date prescribed for reckoning the time limit is „the date of filing of the return? and if no return is filed, „the last date on which the return should have been filed?. This is the date on which the officer acquires knowledge of the activities of the a....