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2018 (11) TMI 1207 - AT - Central ExciseCENVAT Credit - duty paying documents - debit notes suggesting the price variation/ short receipt of raw material and credit sought to be denied - Held that - The compensation is not part of value of goods whereas the same is on the form of penalty for non-lifting of the goods, hence the same cannot be liable to excise duty - demand set aside. CENVAT Credit - duty was demanded on some invoices which were not included in the list of invoice - Held that - The said invoice which was alleged to have been issued for removal of goods clandestinely, the same were Proforma invoice. The department has not adduced any other evidence that other than this Proforma invoice that the goods were cleared clandestinely. Therefore, on the basis of Proforma invoice, the demand cannot be confirmed - demand set aside. CENVAT credit - non reversal of cenvat credit in respect of certain inputs and finished goods cleared - Held that - The appellant has not disputed the demand but they only submitted that the lapse is of non reversal of credit/payment of duty on the part of employee - demand upheld. Exemption under N/N. 67/95-CE dated 16.03.1995 - appellant have manufactured and used sofa within their factory for captive consumption on which demand was raised - Held that - Since the sofa was used in factory s office, and the same being on capital goods is entitled for exemption under Notification 67/95-CE dated 16.03.1995., accordingly, the sofa manufactured and used within the factory is exempted under the said Notification - demand set aside. CENVAT credit - demand confirmed on the goods cleared by the appellant on non returnable gate passes without reversal of cenvat credit - Held that - The appellant has not disputed the demand, however they only pleaded that the non reversal of credit is not due to intention but only due to clerical error - demand upheld. Penalty (on all issues mentioned above) - appellant strongly submits that wherever there is non payment of duty/ non reversal of credit, as explained in their submission it is not due to malafide intention but only due to clerical error, therefore penalty should not be imposed - Held that - As per the explanation given by the appellant and the facts of the case for each and every goods there are one or other document available on record, therefore it cannot be said that the appellant had malafide intention, accordingly, they made out a good case for waiver of penalty - Penalty upheld. CENVAT credit - cenvat credit of inputs said to have not been received on the ground of statement given by Sh. Rajesh Kumar Upadhyay, Security Guard and non mention of invoice in the gate register - Held that - The statement of Sh. Rajesh kumar Upadhyay is not conclusive as he stated in general that he enters each and every consignment in the gate register. However he did not explicitly pointed out that invoice which is not entered in the gate register, the goods of said invoices were not received, except this there is no other evidence. There is no dispute that all such invoices are recorded in the statutory record, books account, therefore, mere none mention in the gate register alone, the credit cannot be denied - credit allowed. CENVAT Credit - demand confirmed on the allegation that the appellant have not received the goods mentioned in the invoices on the ground that the size of MDF board mentioned in the supplier s invoice did not match with the size mentioned in the appellant s record - Held that - There is no dispute that the appellant have indeed received the inputs i.e. MDF boards and it is also not undisputed that the MDF board is not used in manufacture as such form but it is used by stapling 2 boards or more. This also not the case of the department that they have purchased some different material unaccounted. Therefore, on the basis of the facts that input i.e. MDF boards was received by the appellant and the same was used in the manufacture of final product, other than the different of thickness of the MDF board - The department neither investigated or nor brought anything on record that the goods mentioned in the invoice were not received by them - demand cannot sustain. CENVAT Credit - credit denied on one of the input namely, PU Foam only on the ground that in the invoice, the vehicle No. was mentioned as GJ3AF 8382 which is not existing as per RTO report, whereas the correct No. is GJ3AX 8382 - Held that - Except this minor different in the vehicle Number, the department could not adduce any evidence, moreover it is fact that vehicle number GJ3AX 8382 is correct as per RTO record. Therefore, it is obvious and while mentioning the vehicle number, the clerical error has occurred - credit cannot be denied - demand set aside. CENVAT Credit - credit denied by the lower authority on PVC/coated fabric on the basis of invoice raised by M/s Responsive Industries Ltd. - Held that - There is no dispute that the inputs were recorded in the statutory record and books of account, therefore, merely because in the consignee column appellant s name is not appearing, credit cannot be denied - demand set aside. Penalty on director of the appellant company Sh. Pulin J shah u/r 26 - Held that - Firstly, the majority of demand has been set aside and remaining the demand is only due to clerical error which has been paid along with interest, consequently, the appellant has not directly dealt with the goods which is liable for confiscation - It is also undisputed that the SCN has not proposed confiscation of any goods on which excise duty was escaped, for this reason also the penalty on Sh. Pulin J. shah, Director of the appellant company cannot be sustained - penalty set aside. Appeal allowed in part.
Issues Involved:
1. Duplicate Invoice numbers and duty not paid on certain invoices for clearance of finished goods (FG). 2. Documents/Debit Notes suggesting price variation/short receipt of raw material (RM) and credit sought to be denied. 3. Random Invoices not included in the list of invoices for duty payment on alleged clearance of FG. 4. Certain inputs and FG cleared without reversal of credit under challans. 5. Sofa used in factory office without duty payment (Captive Consumption). 6. Goods cleared on Non-Returnable Gate Passes without reversal of credit. 7. Improper availment of Cenvat Credit. Detailed Analysis: Issue No.1 (Duplicate Invoice Numbers and Related Matters): 1. Duplicate Invoice Numbers: - Finding: The invoice numbers were mistakenly duplicated due to a clerical error, leading to one set escaping duty payment amounting to ?70,027. - Judgment: The demand of ?70,027 is upheld as the appellant has paid the duty along with interest. 2. Price Variation/Short Receipt of RM: - Finding: Debit notes were issued for non-lifting of materials by customers, which is considered compensation and not part of the value of goods. - Judgment: The demand of ?59,964 is set aside as compensation is not liable for excise duty. 3. Random Invoices for FG Clearance: - Finding: The invoices in question were Proforma invoices issued as part of a new accounting system, not actual invoices for removal of goods. - Judgment: The demand of ?1,27,492 is set aside since no evidence of clandestine removal was provided. 4. Clearance Without Reversal of Credit: - Finding: Inputs were cleared under gate passes without issuing Central Excise invoices due to a clerical error. - Judgment: The demand of ?4,82,369 is upheld as the appellant did not dispute the demand. 5. Sofa Used in Factory Office: - Finding: Sofas used within the factory for administrative purposes are exempt under Notification No. 67/95-CE. - Judgment: The demand of ?15,106 is set aside. 6. Non-Returnable Gate Passes: - Finding: Goods were cleared on non-returnable gate passes without reversal of credit due to clerical error. - Judgment: The demand of ?1,00,839 is upheld. 7. Penalty: - Finding: The appellant's lapses were due to clerical errors, not malafide intentions. - Judgment: Penalty corresponding to the upheld duty is set aside. Issue No. 2 (Improper Availment of Cenvat Credit): 1. Invoices Not in Gate Register: - Finding: The statement of the security guard was not conclusive, and all invoices were recorded in statutory records. - Judgment: The demand of ?1,88,556 is set aside. 2. Mismatched MDF Board Sizes: - Finding: Differences in recorded thickness were due to industry practices of stapling boards together. - Judgment: The demand of ?24,65,827 is set aside as the inputs were received and used in manufacturing. 3. Fake Vehicle Number: - Finding: The incorrect vehicle number was a clerical error, with the correct number being GJ3AX 8382. - Judgment: The demand of ?12,229 is set aside. 4. PVC/Coated Fabric Consignee Issue: - Finding: The delivery address was the appellant’s factory, despite the consignee being different. - Judgment: The demand of ?6,14,446 is set aside. 5. Penalty on Director: - Finding: The majority of the demand was set aside, and the remaining was due to clerical errors. - Judgment: The penalty on the director is set aside. Conclusion: The appeal of the company is partly allowed, with several demands set aside due to clerical errors and lack of evidence of malafide intentions. The appeal of the director is fully allowed, with penalties being set aside.
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