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TMI Blog2017 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... e it has to be held that quantum of inputs as per duty paying documents are received. There is nothing on record to show that the said Power Corporations will reject the transformers in which, if the weight transformer exceeds the wieght in technical specification. It is also surprising that in this case Revenue authorities have conspicuously refrained from recording any statement of the responsible Officers of APEPDCL and APCPDCL, which may have brought on record that excess input usage was not in their knowledge for drawing an inference against the appellant. In our view, there being absence of evidence toindicate that consumption of material was with intent to remove the same or divert the same, we have to hold that Order-in-Original fails and falls miserably. Penalties on the individuals - Held that: - since we have held that the entire demand falls on merits itself, the Revenue appeals also stands rejected. Penalty on VEL & VTSL - Held that: - the appellant has not been able to prove with concrete evidence to come to a conclusion as to the said capital goods were in fact installed in their own unit or otherwise. In the absence of any such evidence, we hold that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs. The manufacturing activity of transformers is based upon the contract entered by appellant with APEPDCL and APCPDCL raised on the specification of the transformers which are to be purchased and also indicate that for particular transformer, the components which are used should have specific weight as also the transformer oil which is used. On detailed investigation said VEL VTSL and recording various statements of the persons involved, the revenue authorities were of the view that there was a excess consumption of raw materials like CRGO sheets, copper etc. and the same was intentionally done so, as to avail unintended cenvat credit on the inputs. Coming to such a conclusion and after the investigation, show cause notices were issued for the demand of excess cenvat credit availed by VEL VTSL. Show cause notice annexed various statements recorded and also purchase orders received from APEPDCL and APCPDCL. The show cause notice was contested by the appellants before the adjudicating authority on merits and specifically urging that the demands raised against them were calculated on presumptive grounds and they had utilised inputs as required, in their factory premises and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of service tax is on account of the bona fide reasons and no fraudulent intent is noticed, I do not propose penal action under section78 of the Finance Act by virtue of the provisions contained in section 80 of the Finance Act. However, I order that penalty shall be paid under section 76 of the Finance Act, 1994 for non payment of the service tax. f. I impose a penalty of ₹ 5,00,000/- (Rs. Five lakh only) under rule 15 (1) of the CENVAT credit Rules, 2004 on VTSL. 5. Ld. Counsel submits that the entire issue of allegation of clandestine removal of the inputs or finished goods manufactured out of them, is without any basis or corroborative evidence. It is his submission that the goods which are sold by them i.e. transformers, are sold to Government of Andhra Pradesh undertakings and the purchase orders, technical requirement are on the basis of the requirement of load in a particular area. It is his submission that the department has not confirmed the demands raised as duty on the transformers allegedly removed, but on the inputs like CRGO steel holding that appellant had shown excess consumption of the said CRGO steel, Copper, Transformers and removed the inputs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, did not maintain any record of receipt of inputs and issue of inputs as required under Rule 9(5) of Cenvat Credit Rules, 2004 and Rule 10 of Central Excise Rules, 2002. It is his submission that appellants misused the inputs received in the factory on which cenvat credit was availed, is evident from the fact that appellant has been undertaking repairs of transformers received from State Electricity Boards and these repairs could not have been undertaken without utilisation of such inputs on which cenvat credit has been availed. He would submit that there being no issue of inputs for manufacture of different transformers, the adjudicating authority has correctly confirmed the demands received on both VEL and VTSL. It is his further submission that in respect of GTA services, the appellant VEL failed to take registration and pay the tax, consequently service tax of ₹ 1,92,143/- was demanded and confirmed by adjudicating authority, which is not contested by the appellant on merits but only an limitation, is hit by limitation. Having not paid the tax in time and not informed to the department also, the said tax liability needs to be confirmed. Apart from all other arguments, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filing the returns regularly and hence the demand is purely hit by limitation. 9. On careful consideration of the submissions made by both the sides and perusal of records, we find that the issue that requires the attention of the Bench is whether the said VEL and VTSL are required to reverse the cenvat credit, allegedly having consumed inputs in excess and unrecorded and held to have been removed clandestinely or otherwise. We find from the records that it is undisputed that the appellants M/s VEL and VTSL are manufacturing transformers only for APEPDCL and APCPDCL based on the purchase orders placed by them. It is the case of the Revenue that these government companies have placed the purchase orders with technical specifications which indicate specific weight of the goods to be used in the manufacturing activity of the said transformers and calculating in reverse the quantum of the materials used for manufacturing of transformers cleared by both the appellants and tallying it with the receipts of the inputs on which cenvat credit has been availed, Revenue has come to the conclusion consumption of inputs is erroneous that there is ineligible availment of cenvat credit and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and the weight of the transformers as shown therein could be standards. There is nothing on record to show that the said Power Corporations will reject the transformers in which, if the weight transformer exceeds the wieght in technical specification. It is also surprising that in this case Revenue authorities have conspicuously refrained from recording any statement of the responsible Officers of APEPDCL and APCPDCL, which may have brought on record that excess input usage was not in their knowledge for drawing an inference against the appellant. In our view, there being absence of evidence toindicate that consumption of material was with intent to remove the same or divert the same, we have to hold that Order-in-Original fails and falls miserably. We find that our these views are fortified by the Judgment and the order of the Tribunal in the case of Atlas Conductors Vs. CCE, Mumbai [2008(221)ELT 231 (Tri.-Mumbai)] wherein similar view has been taken as also in the case of SSD Spinning Mills Ltd [2008(222)ELT 392 (Tri.-Chennai)]. In the absence of any quantitative arrival of demands with acceptable proof/evidence, which is absent in the case in hand, we hold that demands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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