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TMI Blog2003 (9) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... They have a Common Sales Tax Registration No. 3820055 1.2 They have a common Registration Number with the TextilesCommittee, Government of India, Ministry of Textiles No. KAR/00113. 1.3 They have a Common Registration with the Cotton Textiles Export Promotion Council. (TEXPROCIL) No. MY/11055(92)-T. 1.4 However, they had two separate Registration Certificate Nos. for Central Excise Department, since the units were located in different jurisdictions. This is as per the requirements of the Central Excise Act. 4. The Appellant decided to close the B mill at Tiruttani and the closure notice was filed with the Tamil Nadu Government and other authorities on 24-4-2000. A copy of the closure notice was sent to the Assistant Commissioner of Central Excise, Ranipet and to the Superintendent of Central Excise, Arakonam Range vide letter dated 29-4-2000. 5. All the textile machineries including those for which Cenvat credit were taken and installed in B mill at Tirutani were shifted to the existing A mill at Thanjavur which comes under the Central Excise Jurisdiction of Thanjavur Range of Thanjavur Division during October to January 2001. The machineries sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so sought post facto approval. In addition it was also requested to the Commissioner to allow to take the unutilised credit of Rs. 57,877/- under RG 23C at Tiruttani. 12. Subsequently, Appellants were issued with Show Cause Notice No. 28/2002, dated 14-5-2002 in file C. No. V/15/52/168/01 Cx. Adj-III Commissionerate by the Additional Commissioner of Central Excise (Audit), Chennai III Commissionerate, Chennai. 13. The allegations made in the Show Cause Nolice are : (i) The Appellant had closed B mill, Tirutani and cleared the stock of finished goods and capital goods to A mill at Thanjavur with the intention to evade payment of duty and without following Central Excise procedure to A mill at Thanjavur and hence the department proposed to demand a duty of Rs. 9,57,168/- under Rule 9(2) of Central Excise Rules, 1944 read with Section 11A of Central Excise Act, 1944 and also invoke provisions of Section 11AC, 11AB of the Act and Rule 173Q and Rule 209A of Central Excise Rules, 1944. 14. Vide reply dated 14-8-2002, it was stated that both B mill at Tirutani and A mill at Thanjavur are governed by the same Board of Directors. The transfer of the unit - plant and machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person who has removed such goods under sub-rule (1)(c) of Rule 57AB of Central Excise Rules, 1944 applicable o the relevant period. 18. As per Rule 57AF(1) and 57AF(2), the Appellants are eligible to transfer the capital goods from their B mill to A mill and also avail balance unutilised credit at the time of closure of factory at Tirutani. 19. The Appellants are not governed by Rule 57AB(1)(c) or 57AB(1)(D). This rule deals with a situation where capital goods are cleared for home consumption and in circumstances mentioned other than in Rule 57AF. The facts of the present case is that the B mill at Tirutani was closed and the capital goods were transferred to A mill at Thanjavur. Rule 57AF does not demand duty already availed and utilised on such capital goods removed to A mill, butprovides transfer of un-utilised credit to the mill A . Merger means and includes closure of mill B and transfer of capital goods to A mill. 20. In the case of Orient Ceramics (P) Ltd. v. CCE, Meerut-II reported in 2001 (130) E.L.T. 528, wherein Hon ble Tribunal has held that words and phrases - Sale, Merger, Amalgamation or transfer contemplated under the Rules 57F(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 24. The Lower Authority has come to a firm conclusion that there has been an intention to evade payment of duty. Such a conclusion should necessarily emerge from seizure which is surprisingly not there in this case. 25. When there is an allegation that finished goods/capital goods have been removed with intention to evade duty, it would necessarily imply that the goods have been cleared without any documentary evidence and without intimation to any of the statutory authorities. However, in this case, the SCN itself accepts the fact that the goods have been removed under Form XXVII of the Sales Tax Act. 26. Apparently this Form XXVII is mandatory for inter unit transfers and the SCN has relied upon this document to sustain the allegation that goods have been removed with intention to evade duty. 27. Next, propose to examine the provisions of Rule 57AF relating to Transfer of Cenvat credit : If a manufacturer of the final products shifts his factory to another site or the factory is transferred on account of change in ownership or on account of sale, merger, amalgamation, lease or transfer of the factory to a joint venture with the specific, provision for transfer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - under RG 23C of the Cenvat Scheme at Tiruttani. As the shifting of the unit from Tiruttani to Thanjavur is a genuine one...... we would request you to kindly permit us to transfer the unutilised credit of Rs. 57,877/- under RG 23C to our Thanjavur unit. The Commissioner of Central Excise did not send any reply for this application for transfer of credit. 32. I have to now necessarily address a crucial question governing the very fundamentals of Revenue administration. It is on record that the Appellant had submitted Application dated 27-8-2001 to the jurisdictional Commissioner of Central Excise. It is also on record that this Application continued to remain with the Additional Commissioner of Central Excise for nine long months unanswered. What is of crucial significance to this Appellate proceedings is whether such supine indifference can be tolerated or not? I am compelled to take cognizance of a document of paramount importance - The CITIZEN S CHARTER. The Citizen s Charter has been issued by the Ministry of Finance after due approval from Revenue Secretary, Department of Administrative Reforms and Public Grievances and Cabinet Secretariat. This Citizen s Charter has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t our conceptions be enlarged to the circle of our duties. Let us convince the people that our system is best, let us extend our ideas over the whole of the vast field in which we are called to act. In keeping with the noble ideals enshrined in the Citizen s Charter the Appellant deserved to get a prompt reply for their petition dated 27-8-2001. However, the mystical secrets of office procedure denied them a timely reply. We have to push aside the fateful and inexorable realism of such complacency. The Appellants, seem to be asking the Department whether in this time of relentless challenge do we have those qualities of adjustment, those characteristics of a dynamic office which are requisite to meet the accelerating rate of change which is the overriding characteristic of our time? The highest ethical concepts is enshrined in our Citizen Charter but if we fail to perform our share of duties and responsibilities, the visions enshrined and displayed will mean no more than a name carved deeply into marble on an expensive cemetry mausoleum. There is no particular inspiration in reading headstones in a graveyard. 33. Had the Appellant s application dated 27-8-2001 been examined and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason whatsoever, a Show Cause Notice has been issued by the Addl. Commissioner on 14-5-2002 which is about 9 months after the application seeking transfer of credit under Rule 57AF. The show cause notice states that the permission of Commissioner has been obtained for the issue of SCN but there is no indication that Appellant s application seeking transfer of credit was rejected or not. The Appellant rightly contends that it was for the Commissioner to have issued the Show Cause Notice seeking to reject their application dated 27-8-2001 for transfer of credit under Rule 57AF. Such a Show Cause Notice has not been issued by the designated authority and a lower functionary cannot legally seek to overcome an application moved before the proper authority by completely avoiding reference to that. In the logical sequence of events, the Lower Authority should have awaited for the order of Commissioner. If the same was rejected then, he could have issued a Show Cause Notice. Alternatively, the Commissioner himself could have issued a Show Cause Notice to reject their Application dated 27-8-2001. Hence, I have to hold that there is a gross violation of the Citizen s Charter and Board s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000 about, the proposed closure of Tirutani unit w.e.f. 1-6-2000. Thus effectively 30 days advance notice has been given to the Assistant Commissioner of Central Excise, Ranipet. 41. On purely legal terms, the ratio of the decisions contained in the following judgements would reinforce the plea of the Appellants about their bona fides : 42. In the case of Jyothi Limited v. CCE reported in 2003 (151) E.L.T. 178, the Hon ble Tribunal, Mumbai has held that - Demand - Limitation - Extended period - Intention to evade - Goods cleared to sister concern - Short debit of credit alleged - Even if the assessee paid higher duty that would have been available at the factory of the destination hence, there was no motive for the assessee not to pay higher duty - Intent to evade duly not arise - Demand barred by limitation - Section 11A of Central Excise Act, 1944 read with Rule 57A of erstwhile Central Excise Rules, 1944. 43. In the case of Patson Transformers (P) Ltd. v. CCE, reported in 1997 (93) E.L.T. 402, the Hon ble Tribunal, New Delhi has held that, Demand - Limitation - Suppression of facts with intention to evade duty not established as parts falling under Tariff Item 68 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Thanjavur unit stands confirmed by the Superintendent of Central Excise, Thanjavur. Under these circumstances, I permit the transfer of the unutilised credit amounting to Rs. 57,877/- lying in RG 23C Part II of B unit, Tirutani. 49. Even in the case of non-transfer of capital goods, the transfer of unutilised credit was allowed under Rule 57AF of Central Excise Rules 44 as per the decision of Hon ble High Court of Judicature, Bombay in the case of Castrol India Pvt. Ltd. v. Union of India - 2003 (154) E.L.T. 19 (Bom.) 50. To conclude, the impugned orders result out of clear violation of the Citizen s Charter and Board s Circular No. 24/2000. What has been ratified at the highest echelons of the Government cannot be flouted by those at the lower rungs of the administration. Even on a legal plane the impugned orders do not derive any support from Tribunal rulings referred to supra. 51. Accordingly, I set aside the impugned order and allow the Appellant s Appeal. When there is no duty liability or demand, there is no re-quantification required as contended by the Department in A. No. 15/2003 (M-III) (D). Hence Department Appeal stands rejected. Ordered accordingly. Part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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