2023 (12) TMI 1001 - AT - Central Excise

Application seeking restoration of appeal - non-prosecution of the case - seeking change in the cause title - non-inclusion of value of the said moulds, dies charged to respective buyers of the forgings separately in the assessable value - Availment of CENVAT Credit. Application seeking restoration of appeal - non-prosecution of the case - seeking change in the cause title - HELD THAT - For the mistake of the counsel in not intimating the Tribunal about the change of name and address on merger with M/s. Kems Forgings Limited, the appellant cannot be penalised - Considering the submissions of the appellant supported by affidavit filed by the Managing Director of the company, in the interest of justice, the miscellaneous application seeking restoration of the appeal dismissed earlier for non-prosecution vide order dt. 20.08.2019 is allowed and the said order is recalled and appeal is restored to its original number. Also, the miscellaneous application seeking change of cause title from M/s. Sree Lakshmi Forge Engineers Ltd., to M/s. Kems Forgings Ltd. on the basis of the certificate issued by the Registrar of Companies dated 14.07.2011 is allowed and the appellant s cause title is changed from M/s. Sree Lakshmi Forge Engineers Ltd., to M/s. Kems Forgings Ltd. Registry is directed to make necessary changes regarding cause title and address in the records as well as database. Short payment of duty - non-inclusion of value of the said moulds, dies charged to respective buyers of the forgings separately in the assessable value - Section 4 of the Central Excise Act, 1944 - HELD THAT - Initially, in the demand notice, the entire cost of the dies / jig fixtures proposed to be included assuming that the same have been used in the manufacture of forgings and its cost has been recovered from the customers. However, no evidence has been placed in this regard in spite of two rounds of litigation before the adjudicating authority. The learned Commissioner (Appeals) has now erred in remanding the matter to examine the issue of inclusion of the amortised cost of dies in the value of the forgings without analysing the evidence on the allegation of receipt of additional cost of the dies / blocks or inserts by showing separately in the invoice without payment of duty - the cost/value of the inserts, which are fixed with the blocks of the appellant and exhausted during the course of manufacture of forgings cannot be included as no evidence has been placed on record indicating that the same are recovered separately along with the value of the forgings. Thus, the finding of the learned Commissioner (Appeals) remanding the matter to add the amortised cost of the dies / blocks to the transaction value of forgings is erroneous; hence cannot be sustained. Availment of CENVAT Credit - HELD THAT - The invoices were raised on their account and the materials were shipped to the appellant and have been received as indicated in their material receipt register (pages 52 to 59 of the appeal paper book), the relevant transport receipts from the supplier M/s. Mahindra Intertrade Ltd. A/c of Sree Lakshmi Industrial Forge Engineers Limited have been placed. The said goods are duly accounted for in their stock register. They have cleared the said goods later and necessary invoices are raised for clearance the goods as such in favour of M/s. Southern Steel Forgings Ltd. The receipt and corresponding clearance invoices in respect of M/s. Southern Steel Forgings Ltd. are enclosed with the appeal (pages 32 to 51); hence it is sufficient to accept that the materials were received and utilized in the premises of the appellant - there are no reason to deny the cenvat credit on the basis of the aforesaid documents and to remand the matter to the original authority to examine the evidences enclosed, when the same had not been examined in the two rounds of adjudication before the original authority. Consequently, another remand to verify the cenvat credit documents would not yield any fruitful result - the impugned order is set aside - appeal allowed.

Issues Involved:
1. Restoration of the appeal dismissed for non-prosecution.
2. Change of cause title.
3. Recovery of duty short paid on account of non-inclusion of the value of dies/jigs in the transaction value of forgings.
4. Admissibility of cenvat credit.

Summary:

Restoration of the Appeal Dismissed for Non-Prosecution:
The Tribunal initially dismissed the appeal on 20/08/2019 due to non-appearance and non-prosecution by the appellant. The appellant argued that they did not receive the hearing intimation due to a change of address following their merger with M/s. Kems Forgings Limited in 2011. The Tribunal accepted the appellant's explanation, supported by an affidavit, that the non-receipt of intimation was due to their counsel's failure to notify the Tribunal of the change. The Tribunal found that penalizing the appellant for their counsel's mistake was unjust and allowed the restoration of the appeal.

Change of Cause Title:
The appellant sought to change the cause title to reflect their merger with M/s. Kems Forgings Limited. The Tribunal accepted the certificate issued by the Registrar of Companies, Karnataka, and directed the registry to update the records and database accordingly.

Recovery of Duty Short Paid:
The issue concerned the non-inclusion of the value of dies/jigs in the assessable value of forgings, resulting in a short payment of duty amounting to Rs. 4,24,081/-. The appellant contended that they did not receive any additional consideration for the dies/blocks, which were their capital assets, and the cost of the inserts used in manufacturing was borne by them. The Tribunal found that no evidence was provided to substantiate the claim that the cost of dies/blocks was recovered from customers. Consequently, the Tribunal held that the Commissioner (Appeals) erred in remanding the matter for redetermination of the assessable value by including the amortized cost of dies/blocks and set aside this part of the order.

Admissibility of Cenvat Credit:
The appellant had availed cenvat credit of Rs. 5,56,999/- on invoices consigned to M/s. Southern Steel and Forgings, Peenya. The Tribunal found that the materials were duly received and recorded in the appellant's stock register and subsequently cleared to M/s. Southern Steel and Forgings Ltd. The Tribunal concluded that there was no reason to deny the cenvat credit based on the documents provided and found further remand unnecessary. The impugned order was set aside, and the appeal was allowed with consequential relief as per law.

Conclusion:
The Tribunal restored the appeal, allowed the change of cause title, set aside the order concerning the inclusion of the amortized cost of dies/blocks in the assessable value, and upheld the admissibility of the cenvat credit. The appeal was allowed with consequential relief.

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