9911796707
TMI Blog2015 (4) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... wing the Appeal of the Respondent/Assessee and setting aside the order-in-original dated 10th December, 2003 passed by the Commissioner of Central Excise, Mumbai IV. The Respondent has manufacturing units at Andheri, Mumbai and at Silvasa. There is another unit in Mumbai itself and the Assessee is engaged in manufacture of motor vehicles and parts and accessories of motor vehicles falling under Chapter No. 87 of the First Schedule to the Central Excise Tariff Act, 1985. The Revenue alleges that on the basis of specific intelligence that the Assessee was evading Central Excise Duty by way of clandestine removal of excisable goods, search operations were carried out at the above premises by the officers of the Director General of Central Excise Intelligence, West Zone, Mumbai. This investigation revealed that the Assessee was engaged in building body on the chassis of motor vehicles and that it was not paying duty on bus/tempo travelers manufactured by it availing exemption under Notification No. 3/2001C. E. Dated 1st March, 2001. However, the exemption was conditional upon the Assessee not taking credit of duty paid on chassis or other inputs used in the manufacture of such vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit of the Notification cannot be denied. Thus, on such a conclusion and finding that the reversal of Modvat Credit is only to the tune of Rs. 36,246/which also has lapsed that the order-in-original was set aside. The Appeal was allowed. The correctness of this conclusion is assailed before us by the Revenue. 6. Mr. Mishra appearing for the Revenue in support of this Appeal submits that the show cause notice contains a specific allegation. That allegation has been completely missed by the Tribunal. The investigation revealing that the Assessee claimed exemption which was not unconditional, then, the Tribunal was obliged to consider not only the impact of the condition but the allegation in the show cause notice in its entirety and the response of the Assessee thereto. Mr. Mishra has invited our attention to the reply, which has been furnished to the show cause notice. He submits that in the present case, the stand of the Assessee was that even though exemption was claimed, there was no intentional act. The written submissions, to which our attention has been invited by Mr. Mishra, according to him, contain an admission. The argument of Mr. Mishra is that the plea of the Assessee t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eby exempts excisable goods of the description specified in column (3) of the Table below or specified in column (3) of the said Table read with the concerned List appended hereto, as the case may be, and falling within the Chapter, heading No. or subheading No. of the First Schedule to the Central Excise Tariff Act, 1985 specified in the corresponding entry in column (2) of the said Table, from so much of the duty of excise specified thereon under the First Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table and from so much of the special duty of excise leviable thereon under the Second Schedule to the Central Excise Tariff Act, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (5) of the said Table and importantly subject to the relevant conditions specified in the Annexure to this Notification and referred to in the corresponding entry in column (6) of the said Table. 12. As far as the Assessee is concerned, it is undisputed before us that the Assessee manufactures motor vehicles, principally designed for the transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Modvat benefit in respect of glasses purchased, but that happened inadvertently since the duty payable Rs. 16,48,780/was more than the Modvat benefit of Rs. 36,246/and no prudent businessman would make such a mistake intentionally. Copies of invoices were annexed and relied upon. But committing of the mistake does not mean that it is irreversible. It can be corrected even afterwards. In the present case, even though the Modvat was taken in RG23A, it was never utilized. In the present case, the excise licence itself was surrendered on 1st April, 2002, the Modvat credit taken by the Appellant automatically lapsed on 1st April, 2002. Therefore, the benefit of Exemption Notification be granted. 15. To our mind, this was a clear distinguishing feature from the cases and decisions relied upon by the Tribunal. The order-in-original concluded and to our mind rightly that this was an admitted position of a clandestine removal. There was no payment of excise duty by the manufacturer on excisable goods. The payment was not made by claiming exemption and entitlement under Notification No. 3/2001C. E. which is a conditional exemption. This is a case of admitted Modvat Credit taken on gl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty and interest from the date of availment of credit. This order of the Commissioner was challenged before the Tribunal. The Tribunal concluded that the Assessee had not taken irregular credit with an intention to avoid payment of duty. The imposition of penalty was set aside. Insofar as the interest payment is concerned, the Tribunal concluded that the records indicate that the credit was not actually taken for utilisation. Therefore, question of payment of interest would not arise. Hence, even the direction to pay interest was set aside. That is how the Revenue was aggrieved and carried the matter in Appeal. 17. The High Court of Karnataka summarized the legal principles and concluded that in such cases and when the provision is attracted, where the Cenvat Credit has been taken or utilized wrongly or has been erroneously refunded, imposition of penalty or interest was not justifiable. We do not find that the conclusions reached in paras 19 and 20 and with the backdrop of only a book entry that this decision could have been relied upon by the Tribunal to set aside the order of the Commissioner. 18. In the case of Bombay Dyeing and Mfg. Co. Ltd. (supra) there was a mill, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Similarly, on payment of duty on the yarn, the Assessee got the credit which was never utilized. Before utilization, the entry had been reversed which amounted to not taking credit. Both conditions of the Notification were satisfied and the Tribunals conclusion was upheld. 19. In the case at hand, however, the undisputed position is otherwise. The Assessee admits taking of credit and contrary to the condition No. 41 of the Exemption Notification, which enables it to claim or remove the goods at nil duty. Knowing fully well, the Assessee could not have availed of the benefit of such exemption Notification. The activity or process in this case amounts to manufacture is undisputed. That the goods have been removed without payment of duty is the conclusion reached in the order-in-original. Such a conclusion, which was not perverse and neither vitiated in law should not have been interfered with by the Tribunal. The Tribunal's reasoning and relying upon these decisions, which we have noted above, is erroneous to say the least. We do not see as to how such Judgments and decisions rendered by the Hon'ble Supreme Court, other High Courts or the Tribunal could have been relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
