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TaxTMI 
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2026 (4) TMI 999
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....re was a difference between the physical stock of the inputs as per Balance Sheet and the actual balance as reflected in RG-23A part I, for the years 1996-97, 1997-98 and 1998-1999. A Show Cause Notice dated 04.04.2002 was issued to the appellants seeking to disallow CENVAT Credit amounting to Rs. 1,01,60,258/-, under Rule 12 of CENVAT Credit Rules, 2001 read with Section 11A (1) of the Central Excise Act, 1944, along with interest and penalty while also seeking to impose penalty on the Director. The proposals in the Show Cause Notice were confirmed by the Commissioner vide Order-in-Original dated 21.04.2004. On an appeal filed by the appellants this Bench vide order dated 31.03.2009, remanded the matter to the authority for a fresh consideration, observing that the Revenue had failed to put forth any evidence to prove the suppression of purchase or clandestine removal of inputs or final products and with the direction that the department may reconcile the discrepancy on the basis of the submissions made by the appellants. The impugned order dated 19.04.2011 was passed in the remand proceedings. 3.Shri B.L. Narasimhan, learned counsel for the appellants submits that the learned ....
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....e financial years discussed in the impugned case; the difference in stock between the balance sheet and RG 23A arose only because there was a time lag in the communication of the information sent by the stores department to the excise department of the appellant; for an example for the financial year ending March, 1997 the information was sent on 16.04.1997; accordingly, entries were passed in RG 23A in the month of April, 1997 by issuing a debit entry in respect of the stock consumed up to March, 1997; as the source for the figures in both balance sheet as well as RG 23A was the stores department the difference is explained. As regards isocynate, learned counsel submits that the closing balance as on 31.03.1997 was 41,750 kg in the balance sheet and 46,000 kg in RG 23A part I; thus there was a difference of 4,250 kg; it can be seen that the stores department informed the excise department that the stock as on 31.03.1997 was 41,000kgs, accordingly, a debit entry of 4,000kgs was made in the RG 23A and further entry of 250 kg in April, 1997; learned Commissioner ignored the clearance of 13,000 kg under Rule 57F on payment of duty. Learned Counsel submits as regards the release agents....
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....020 dated 20.01.2020 CESTAT Chandigarh * Anupam Industries Limited, Dharampaul Associates, Keshav Steel And Mehul Patel Versus Commissioner of C.E. & Customs-Anand Final Order No. 11370- 11377/2024 dated 18.06.2024, CESTAT Ahmd. * CCE vs. Shri Nirmal Kumar Aggarwal - vide order dated 24.02.2009 - Punjab and Haryana High Court * CCE vs. DCM Engineering Works - vide order dated 16.04.2009 - Punjab and Haryana High * Kesarwani Zarda Bhandar Versus Commissioner Of C. Ex., Allahabad 2016 (333) E.L.T. 465 (Tri. - All.) * Commissioner Of C. Ex., Nagpur Versus Vidarbha Winding Wires Ltd. 2008 (229) E.L.T. 218 (Tri. - Mumbai) * Raam Tyres Ltd. Versus Commissioner Of Central Excise, Visakhapatnam 2005 (188) E.L.Τ. 408 (Tri. - Bang.) * M/S P.I. Square Cables Pvt. Ltd., R.K. Sachdeva, Director Versus C.C.E., Delhi-1 Final Order No.- A/52121-52122/2017-EX[DB] dated 06.03.2017, CESTAT New Delhi * Commissioner Of C. Ex., Patna Versus Universal Polythelene Industries 2011 (270) E.L.T. 168 (Pat.) [ department appeal dismissed by Supreme Court in 2016 (342) E.L.T. A226 (SC)] 7. Learned Counsel further submits that extende....
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.... * Meenakshi Food Products (P) Ltd. vs. C.C.E. & S.T., Ahmedabad-III, 2019 (370) E.L.T. 1330 (Tri. - Ahmd.) * M/S. Gryphon Appliance Ltd. And Shri Rajesh Mohan, Director Versus Commissioner Of Central Tax, Delhi Final Order Nos. 50323-50324/2025 dated 18.07.2025, CESTAT New Delhi * M/S Chaudhry Hammer Works Ltd., Mr. Mukul Chaudhary, Managing Director Of, Mr. Gayatri Nath Srivastava, Vice-President (F&A) Of, Mr. Manoj Singhal, Commercial Manager Of Versus Commissioner Of Central Excise, Ghaziabad Final Order Nos. 70127-70130/2025 dated 13.03.2025, CESTAT Allahabad * M/s Khaitan Electricals Ltd., Shri J.P. Gupta, Shri R.A. Lohariwala v. C.C.E, Delhi- IV, 2018-TIOL-529-CESTATCHD * M/s Quality Flavours Exports, Smt. Veena Gupta and Sh. Rajiv Kumar Gupta v. Commissioner of Central Excise, Chandigarh-ll, Final Order No. 60550- 60552/2024 dated 27.09.2024 (Tri.-Chan.) 8. Shri Anurag Kumar and Shri S.K. Meena, learned Authorized Representatives for the Revenue, reiterates the findings of the impugned order and submit that there was ample proof that there were shortage in the raw material as evident from the statements of Shri Harishankar Bhardw....
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....ion of the order. We are satisfied that when the issue was framed on the basis of the balance sheet figures 'that needs to be tested since those figures were considered to be basis of charge while the statutory record under Central Excise Act 1944 are the full proof figures. To our mind, the Balance sheet does not appear to be recognized document under the law to bring an allegation and should be held to be legal basis for charging a litigant. The Balance sheet is totally a foreign material which may support the case of Revenue. If Balance sheet provides credence to Revenue and that remains uncontracted in the process of rebuttal by the appellant, that may provide scope for a proceeding under Excise law. What that we feel is that the department has to come out with cogent evidence to prove that the inputs while undergoing the consumption has given rise to questionable conduct of appellant. We appreciate that the Cenvat credit is not a facility goods qua goods, but Cenvat credit is a credit earned by the assessee which is utilised for ultimate discharge of duty liability. Therefore, to deny the right, burden of proof lies on Revenue with cogent evidence led to show that the Inpu....
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....arlier findings in the order of adjudication. The authority should dispose of the matter as early as possible since demand raised by impugned order was running into crores of rupees. The appellant shall appear before the Id. adjudicating authority within 60 days of receipt of this order, so that the authority shall fix the date of hearing. The authority should not hesitate to make a proper exercise when the pleading of the appellant even today is that the figures are reconcilable. Fair opportunity of hearing should be given by the id. adjudicating authority to all the appellants and he shall pass a reasoned and speaking order within the purview of show cause notice. 10. On going through the remand order, we find that the bench has made the following observations: (i) Balance sheet is foreign material for Central Excise Act, 1944 and is not a foolproof evidence for central excise purposes. In case, the Revenue wishes to rely on the same further cogent evidence has to be brought to prove the allegation that the inputs were only gathered merely on paper for availing credit and have not undergone consumption. (ii) No evidence of suppression of purchase and clandest....
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....ommissioner finds that although no physical verification of the MODVAT inputs had been conducted by the departmental officers on relevant dates, yet the fact remains that the preventive party of the central excise division visited the notice's premises and on verification found that there was a shortage of 2736 kg of polyol and 250 kg of releasing agent. Learned Commissioner attempts to justify the allegation of discrepancy in the figures in balance sheet and RG-23A during the years 1997, 1998 & 1999, on the basis of shortage found by the officers on 04.04.2001. This is not permissible. If the Revenue found shortages on 04.04.2001, they are free to initiate proceedings against the appellants for the same and this can, in no way, form evidence for an allegation for the previous years based on discrepancy in the figures. Revenue should have made certain attempts to take physical stock during the relevant period. Therefore, we find that the learned Commissioner has not appreciated and dealt accordingly with the remand order made by this Bench. Further, we find that there is no discussion and evidence in the impugned order to come to a conclusion that the appellants have manipulated do....
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....edit and during the relevant period Show Cause notice if any was to be issued in terms of the rules prevailing under Central Excise Rules, 1944. We find that the appellants have availed MODVAT credit during the relevant period. If the Department sought to deny the credit for whatever reasons, recourse should have been taken under the relevant provisions as prevalent during the relevant time. It is not open for the Revenue to penalize the appellants for an offence committed during the period when the provisions invoked were not available. Learned Authorized Representative attempts to defend the impugned order for the reason that the provisions of Rule 209 of Central Excise Rules, 1944 and Rule 26 of CENVAT Credit Rules, 2001 are similarly worded and that the show cause notice and the impugned order were correct in seeking to recover the MODVAT credit under Rule 12 and in imposing penalty under Rule 26 of CENVATA Credit Rules, 2001 and that non-mention of provisions or mentioning wrong provisions does not vitiate the proceedings. We are not inclined to accept this proposition in view of the judicial pronouncements cited by the appellant as above. We find that the co-ordinate Bench of....