TaxTMI 
TaxTMI 
2005 (6) TMI 182
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....ture soap. They have factories at Mysore and Bangalore. In the Mysore factory Sandal Wood Oil, an excisable commodity is manufactured. The entire quantity of Sandal Wood Oil manufactured at Mysore factory is cleared to the Bangalore factory for use in the manufacture of toilet soap. Duty is paid at the Mysore factory on the sandalwood oil on the basis of cost construction method, as there is no sale made from Mysore factory to Bangalore factory. The duty paid at Mysore factory is taken as credit at Bangalore factory. The toilet soaps manufactured at Bangalore factory are cleared on payment of appropriate duty under Section 4A of the Central Excise Act, 1944 on the basis of Maximum Retail Price (MRP) less permissible deductions. 3. Revenu....
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....enged the impugned orders. 4. Shri G. Shivadass, the learned Advocate appeared for the appellants and Shri R.N. Vishwanath, the learned SDR appeared for the Revenue. 5. The learned Advocate adduced the following arguments: (I) Both the Commissioners, in the impugned orders, have held that in the entire act of the appellants in not paying the appropriate duty at Mysore, there has been no loss of Revenue to the department. (II) The appellants unit is a State Government Undertaking, whose accounts are subjected to scrutiny by various agencies including AG's Audit. Hence, there cannot be any intention to evade payment of duty. (III) Since the final product is assessed to duty under Section 4A on the basis of....
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....turer and when there is no sale, the above rule will not be applicable. Hence, Cenvat credit will be admissible. (VII) The above position is clear from the fact that the Mysore factory has been paying duty under the provisions of Rule 8 of the Central Excise Valuation Rules, 2000, which applies only to transactions not involving sale. Once the department has accepted that there is no sale between the Mysore and Bangalore factories there cannot be any bar for availment of Cenvat under Rule 7(1)(b). Even in the context of Rule 57CC the Tribunal held that in the context of Modvat rules the expression 'sale' has to be interpreted as between two entities and not between two divisions of same entity. • Kalyani Brakes....
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....eputy General Manager of M/s. KSDL, Mysore, wherein he has categorically stated that after submitting a cost sheet to the department on 18-8-2000, they had neither revised the value nor disclosed the increasing value to the department. In view of the above, the adjudicating authority has given a finding of intention to evade duty. The irregularity continued for a period of four years. The learned adjudicating authority has also relied on the observation of the Apex Court in para 14 in the case of M/s. Madras Petrochem Ltd v. CCE, Madras reported in 1999 (108) E.L.T. 611 (S.C.). 9. The appellant who is under SRP has an obligation to pay duty on the correct value. The fact that the price of sandalwood oil has escalated is not in dispute. D....
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....t can be availed on the supplementary invoices. However, the learned advocate for the appellants strongly contended that the bar for availing Cenvat credit on supplementary invoices will be applicable only when goods are sold and not for goods stock transferred. He relied on the following case laws which interpreted the expression 'sale' in the context of Rule 57CC of the Central Excise Rules. • Wheel & Axle Plant v. CCE, Bangalore-III - 2003 (161) E.L.T. 843 (T). • Cenvat/Modvat - Goods when shifted to another unit of assessee i.e., Zonal Railways, for captive consumption, no sale of goods involved - Modvat credit not required to be reversed under Rule 57CC of erstwhile Central Excise Rules, 1944. ....
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....reason of fraud, collusion or any wilful misstatement 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." (emphasis supplied) 12. 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 misstatement 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 purch....