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TMI Blog2014 (7) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... h they have taken and availed CENVAT credit on the above said quantities of inputs. As per the provisions of Sub Rule 1(C) of Rule 57 AB of erstwhile Central Excise Rules, 1944 and provisions of sub Rule (4) of Rule 3 of CENVAT Credit Rules, 2001/2002, when inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determined for such goods under the relevant sections of the said Central Excise Act and such removal shall be made under the cover of an invoice referred to in Rule 52A of the erstwhile Central Excise Rules, 1944/Rule 7 of the CENVAT Credit Rules, 2001/2002. 2. The appellants had removed the inputs in question without raising any invoice and cleared them under thereown private documents. When it was pointed out, the appellants raised three consolidated Central Excise invoices in respect of transfer/removal of glass bottles and crates during the period 2001-2002 and subsequently paid the duty of Rs. 14,28,160/-. Proceedings were i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. Learned SDRs claim that it was for the assessee to justify their claim of 9992 crates being non duty paid will not carry the case of the Revenue any further, as the assessee have been taking the very same plea before the lower authorities and has produced the evidences regarding the duty paid character of crates which were brought into their factory from 1.4.2000 to 14.12.2003. In find that the appellants have made out a case that the crates which were cleared to their Nellore unit were non duty paid and they have not availed any CENVAT credit on the said crates. 3.1. On this submission, the learned AR submitted that the facts leading to the adjudication proceedings and culminating in the order are not same and therefore the decision cannot be applied. She submits that in that case the appellant had been taking the stand throughout that the crates which were transferred were out of the stock procured by them prior to 1.4.2000 during which time no credit was admissible. It was also observed by the Tribunal that appellant had been able to produce invoices and evidences regarding availment of credit of duty paid on 5,86,708 crates which were procured by them subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had been taken and to show that these are used in relation to manufacture and in the event of non-use reverse the credit taken, failure to do so would attract the duty as well as the interest and penalty. This was countered vehemently by the learned counsel who relied upon a letter dated 28.11.2002 written by the appellant to the Superintendent in charge of the Range. In that letter, the appellants had stated that prior to 1.4.2000, glass bottles and crates were not eligible for modvat credit and these submissions were made in the letter: As you would be aware, prior to 01.04.2000, glass bottles and crates were not eligible for modvat credit by virtue of the exclusion clause contained in erstwhile Rule 57B(2)(iv). Accordingly, we had not taken modvat credit on crates obtained prior to 01.04.2000. Such glass and crates, on which modvat credit was not taken by us, constitute a significant number. It is our submission that it was these glass and crates, on which modvat credit was not availed, which was transferred by us to our sister units. Therefore, Rule 3(4) would not be applicable to these transfers as the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, did not raise any central excise invoice and did not intimate the department and did not include the details in the returns filed with the department also. If the situation was totally revenue-neutral, the question arises as to why the appellants did not pay duty and clear under a proper invoice. Further she also raised the question as to why they did not raise a proper invoice as required under the Rule without debiting the excise duty at all. The very fact that goods were cleared under private documents and but for the detection by the department, duty could not have been demanded would show that there was suppression of fact and appellants failed to follow the relevant rules. No doubt revenue-neutrality could be a relevant factor but first what is required to be examined is whether the appellants followed the rules. In this case it is quite clear that appellants did not even bother to check whether the inputs that were being transferred were the ones on which credit had been taken or not leave alone ensuring that duty liability was discharged and requirement of law such as preparation of invoice, reduction of stock from the CENVAT credit account were followed. Even at the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount cannot be recovered. The learned AR first of all submitted that this was not a point which was raised before the original authority or the Commissioner (Appeals) or even in the appeal memorandum filed before the Tribunal. No application for inclusion of additional grounds has been filed. Today when both the submissions regarding merit and limitation were not being responded favourably by the Bench, the learned counsel came up with totally new plea which had never been taken earlier. Nevertheless she submits that explanation is clarificatory in nature and the absence of such explanation did not mean that there was no recovery mechanism earlier. 4. Before amendment Rule 3(4) of CENVAT Credit Rules read as under: When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 7. The explanation to Rule 3(5) erstwhile Rule (4) was added w.e.f. 1.03.2003 v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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