2009 (4) TMI 708 - AT - Central Excise

Summary

Issues involved:
The issues involved in this case are the availing of Cenvat Credit based on a supplementary invoice, the applicability of Rule 7(1)(b) of the Cenvat Credit Rules, 2002, the dispute regarding the payment of additional duty on capital goods, and the imposition of penalty under Section 11AC of the Central Excise Act, 1944.

Availing of Cenvat Credit based on supplementary invoice:
The appellant, engaged in manufacturing auto parts, received capital goods free of cost from Maruti Udyog Ltd. under the EPCG Scheme. The Maruti Udyog Ltd. later paid duty on the goods and issued a supplementary invoice to the appellant. The appellant availed Cenvat Credit based on this supplementary invoice. The jurisdictional officers did not dispute the issuance of the supplementary invoice by Maruti Udyog Ltd. The appellant contended that they were eligible to avail credit under Rule 4(b) of the Cenvat Credit Rules. However, the Tribunal found that the supplementary invoice was not issued for the payment of additional duty, as required by Rule 7(1)(b), and hence, the credit availed by the appellant was not sustainable.

Applicability of Rule 7(1)(b) of the Cenvat Credit Rules, 2002:
Rule 7(1)(b) provides for the issuance of a supplementary invoice when an additional amount of duty becomes recoverable from the suppliers of capital goods. The Revenue argued that since no invoice was issued under Rule 7(1)(a) by the supplier of capital goods, the supplementary invoice from Maruti Udyog Ltd. could not be accepted. The Tribunal concurred, stating that the supplementary invoice must be linked to an invoice issued under Rule 7(1)(a) for the payment of additional duty, which was not the case here.

Dispute regarding payment of additional duty on capital goods:
The Tribunal noted that Maruti Udyog Ltd. did not issue any invoice at the time of delivering the moulds in 1994, and hence, there was no question of payment of additional duty. The appellant's misdeclaration of the receipt of goods in their Cenvat Accounts further weakened their case. The Tribunal found that the appellant willfully misdeclared with intent to evade payment of duty, leading to the invocation of the extended period of limitation and the imposition of penalty under Section 11AC of the Act.

Imposition of penalty under Section 11AC of the Central Excise Act, 1944:
The Tribunal upheld the penalty imposed by the Original Authority, citing the appellant's misdeclaration and intent to evade payment of duty as reasons for invoking the extended period of limitation. The Tribunal concluded that the demand of duty was justified, and the penalty under Section 11AC was warranted. Consequently, the appeal filed by the appellant was rejected.