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TMI Blog2009 (2) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... s received by the appellant and sent to the job worker and erected therein and were not returned back within 180 days' period and accordingly the appellant had availed inadmissible Cenvat credit of Rs. 4,96,862/- during the said period and the same was required to be recovered from the appellant under Rule 14 of Cenvat Credit Rules, 2004 (hereinafter referred to as the Rules) along with interest under Section 11AB of the Central Excise Act, 1944 (hereinafter referred to as the Act); that in the above connection, statement of Shri Narayan Bhimappa Shingade, Accountant and Authorised Signatory of the appellant (co-appellant), was recorded on 5-4-2007 under Section 14 of the Act; that basing on the above facts the appellant and Shri Shingade were issued with SCN dated 13-9-2007 directing them to show cause as to why the Cenvat credit taken against the capital goods should not be disallowed and recovered under Section 14 of the Rules read with proviso to Section 11A of the Act along with interest under Rule 14 of the Rules read with Section 11AB of the Act, penalty should not be imposed on the appellant under Rule 15 of the Rules read with Section 11AC of the Act and personal penalty s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire proceedings right from the very beginning has been carried out on biased mind and suspicion, the appellant relies on the case law of M/s. Epcos Ferrites Ltd. v. Commissioner [2008 (228) E.L.T. 109 (Tri.-Kol)]; (vii) that with regard to all the challans being hand written, even serial Nos. are also hand written, it is to submit that Rule is not prohibiting to issue challans manually or prescribing any particular method in allotting the sr. Nos. in a definite fashion or order and it simply says that inputs/capital goods to be removed on serially numbered challans and nothing else; (viii) that as regards non-producing of the challans to visiting audit party or to Range Office the appellant submit that Rule is not insisting or prescribing any mechanism or directing the appellant to produce these challans unless and until called for by the department; (ix) that from Rule 4(5)(a), there is no need to produce ail the challans either before audit or Range Office; (x) that in the instant case, the challans were actually produced before audit party and the auditors were satisfied ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chining operations at the job workers' end and processed goods have been used in the manufacture of final product after being brought back to the appellant's factory and appellant relies on the decision of the Tribunal in the case of Indian Aluminium Co. Ltd. v. CCE [2007 (211) E.L.T. 284 = 2008 (11) S.T.R. 442], (xix) that the appellant relies on the affidavit filed by the Managing Director of the company wherein he has confirmed on oath that their company was following the procedural formalities laid down in Rule 4(5)(a) of the Rules including issuance of requisite challans; (xx) that there would be no gain to the exchequer but the impact would be of revenue neutrality and the appellant relies on the decision of the Apex Court in the case of Commissioner v. Coca Cola India Pvt. Ltd. [(2007 (213) E.L.T. 490 (S.C.)] and Commissioner v. Super Forgings and Steel Ltd. [(2007 (212) E.L.T. A151 (S.C.)] and M/s. Punjab Tractors Ltd. v. Commissioner [(2005 (181) E.L.T. 380 (S.C.)]; (xxi) that the audit party visited the factory of the appellant somewhere in 2006 and demand has been raised by the department in the year 2007 which is almost after a period of one y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the merits of the case also no penalty is imposable on him. During the hearing, they have also submitted written submissions reiterating the submissions made in the appeal memorandum. 3.1 As promised, the Director submitted 4 challans, which are under dispute, vide his letter dated 9-2-2009. 4. I have gone through the case records including record of P.H. After waiving pre-deposit, I take the main appeal itself for decision. The whole issue revolves around that the appellant removed capital goods to the job worker without following the procedure laid down under Rule 4(5)(a) of the Rules; that the goods removed from the appellant were erected at the job worker's premises; that since the goods received in the name of the appellant were not erected in the appellant's factory, the appellant is not eligible to avail Cenvat credit on the said capital goods; that the challans which were submitted by the appellant subsequently for investigation were prepared afterwards only showing the paper transaction and in reality the challans were not prepared at the time of removing the goods to the job worker's premises in view of the fact that the challans were not immediately produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be prepared in a definite form/style. The appellant further claims that the word A/H are affixed to identify the capital goods. To the above contention, there is no independent evidence forthcoming from the department. Whereas, the appellant claims that the particulars of the capital goods were entered in the Form V Register which shows that the goods were removed under challans and even produced before the investigating officer. As contended by the appellant, the Rule does not prescribe that challans should be in a particular shape or design and that according to the said Rule, it has to be established from records, challans or memos or any other documents produced by the manufacturer taking cenvat credit that the goods are received back in the factory within 180 days of their being sent to the job worker. In the instant case, the appellant has demonstrated that the goods were sent under challans and on receipt of the same, the particulars of the capital goods were entered in the Form V Register maintained by the job worker and also according to the challans vide part II of each challan the goods were received back within 180 days in most of the cases. It is not the department's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for some job works and not received within the period of 180 days, the Cenvat credit is not available. In short, the manufacturer has to debit the credit involved on the goods, which were not returned back within 180 days. But the same rule contains provision that when the goods are received back even after the expiry of 180 days the manufacturer can take the credit back. In short, when the goods are not in the possession, the credit is also not available. If any person violates the said rule, the correct action should be to find out whether such credit, relating the goods not received within 180 days, was utilized towards the payment of final products. If so, in view of the accommodation of that credit towards payment, which is not available due to not receipt of the same within 180 days, the manufacturer has to be asked to pay the credit with interest. In other words, asking the manufacturer to pay back the said credit with interest will suffice, since other important aspects such as, duty paid nature of the goods, availability of the goods at the job worker premises and the usage in the manufacture of either intermediate products or final products, are not under dispute. That i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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