9911796707
TMI Blog2011 (9) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... tax will be a value added tax. Decided in favour of Revenue. However appellant maintained proper records thus levy of penalty is not justified. - E/1430 & 1431/2009 - A/346-347/2011-WZB/C-IV(SMB) - Dated:- 15-9-2011 - Shri P.R. Chandrasekharan, J. Appearance: Shri P.V. Sadavarte, Advocate for the appellant Shri A.K. Prabhakar, Authorised Representative for the respondent Per: P.R. Chandrasekharan: These two appeals involve a common issue and, therefore, they are being taken up together for consideration. 2. The appellant M/s. Kapilansh Dhatu Udyog Pvt. Ltd. ('assessee' for short) are manufacturers of cast iron pipes. Before the clearance of the goods, the goods were subjected to third party inspection by M/s. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with interest thereon and also imposed equivalent penalty of Rs. 2,85,708/- under Rule 15 CENVAT Credit Rules, 2004. 2.2. The appellant preferred an appeal before the Commissioner (Appeals) who passed two orders-in-appeal one dated 18/09/2009 upholding the order-in-original dated 06/03/2009 and another dated 22/09/2009 upholding the order-in-original dated 16/02/2009 of the lower authority. The appellant is in appeal against these orders. 3. The learned counsel for the appellant submits that in the instant case they have undertaken the testing and inspection of their products at the behest of their buyers and the inspection charges have been paid by them. The inspection agency has raised the bill for the services rendered on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the assessable value of the goods cleared by the appellant nor was any excise duty liability discharged on the value inclusive of inspection charges. On the one hand the appellant argues that inspection is an integral part of manufacture while on the other hand he has not included the value of such inspection in the cost of final products. It is also on record that the appellant has recovered the inspection charges separately from the buyer of the goods. When the cost of the service is not included in the value of the goods, it is illogical to conclude that such services are input services. For a service to be an input service, it has to be used in the manufacture of the finished product and the cost of the service has to form part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od and it was on examination of these records, the audit team which inspected the records came to know of the transactions. Further, the appellant has maintained proper records of calling for the inspection, the inspection certificates issued by the party and the bills for the inspection charges and payments relating thereto in their books of accounts and they have also raised bills on their buyers for these inspection charges. When all the relevant records are maintained by the appellant, there cannot be any suppression on the part of the appellant with a view to evade any tax or duty and, therefore, I find that imposition of mandatory penalty by the lower adjudicating and appellate authorities under Rule 15(2) of the CENVAT Credit Rules i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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