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TMI Blog2016 (10) TMI 1156X X X X Extracts X X X X X X X X Extracts X X X X ..... and allied activities to run the business and in no way, does it disentitle the manufacturer of excisable goods i.e. ICI India Limited (presently Akzo Nobel Ltd.) to Cenvat Credit of the duty paid on inputs and capital goods. The law is well settled that the revenue cannot pass orders arbitrarily and cannot deny the credit or raise demand merely based on assumptions and presumptions. When facts on records are verified and found to be contrary to the allegations made in the notice, the demand as per notice cannot be confirmed again. Appeal allowed - decided in favor of appellant. - E/39/2007-(DB) - A/71686/2017-EX[DB] - Dated:- 13-10-2016 - Shri Anil Choudhary, Member (Judicial) And Shri Anil G. Shakkarwar, Member (Technical) Present for the Appellant: Shri R. Santhanam (Advocate) Present for the Respondent: Shri D.K. Deb (Assistant Commissioner) AR ORDER Per: Anil Choudhary Heard both sides. The present appeal by the appellant is against the Order-in-Original No.32/Commr./MP/2006 dated 31.10.2006 passed by the respondent Commissioner by which he has disallowed Cenvat Credit of ₹ 77,21,004/- and imposed penalty of equal amount under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Mr. Rajeev J Malviya on 6/7.1.2005. The imported as well as indigenous procurement of inputs and capital goods and credit taken was sought to be verified and explained to the satisfaction of the Preventive officers. The documents for purchase of inputs were also correlated with the invoices and the transport documents for inward receipt of the same. The Preventive officers felt that the appellant (ICI India Ltd.) should have all duty paying documents in its own name and not in the name of Johnson Matthey Chemicals Pvt. Ltd. which took over the control and management of the appellant s business by virtue of the agreement entered into for such commercial operations between the two, even though the office and commercial premises of Johnson Matthey Chemicals Pvt. Ltd. was also located in the same factory premises of the appellant. The address being the same, receipt of inputs at the same address of the factory, in the name of Johnson Matthey Chemicals would entitle the appellant to claim credit for the duty paid thereon as inputs and/or as capital goods. The appellant s explanation that all financial and commercial activities and control of the appellant were taken over and exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was admissible and the duty paid input received by it, had been utilized for manufacture of finished goods and duty was paid thereon by it. The Commissioner was requested to depute an Assistant Commissioner and Superintendent to sit and correlate as well as verify all duty paying documents and the receipt and utilization of the inputs in the factory. The Commissioner accordingly deputed his Assistant Commissioner and Superintendent to verify and correlate all the duty paying documents as well as records relating to inputs received and utilized by the appellant and duty paid on finished goods cleared thereafter and after all such verification duly completed, the verification report has been disregarded flimsily and the entire demand as per show cause notice has again been confirmed by the respondent without any basis or justification valid in law. One of the reasons given for rejecting the assessee s pleas is that Gate Register had not been produced by the assessee for inward receipt of inputs and clearance and removal of finished goods. There was no such issue raised in the show-cause notice and the rejection of the assessee s submissions based on such a new plea taken by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both on facts and in law. Nothing is brought on record by the revenue to prove that the assessee did not receive duty paid inputs and/or it did not utilise the same for manufacture of finished excisable goods cleared on payment of duty. The existence of commercial arrangement between the appellant and JMCIPL is only to carry out the commercial activities for the purpose of business of the company in the light of the need for financing control, sales, marketing and allied activities to run the business and in no way, does it disentitle the manufacturer of excisable goods i.e. ICI India Limited (presently Akzo Nobel Ltd.) to Cenvat Credit of the duty paid on inputs and capital goods. Further, the duty paying documents bear the name and address of both JMCIPL and ICI India Ltd. with the same address and duty paid goods had been duly received and utilized and hence, there is proper accountal thereof. Denial of credit on technical or flimsy grounds is not justified and the respondent is clearly wrong in denying credit lawfully due to the appellant on hyper-technical and flimsy grounds, indicated in the show cause notice even after thorough verification of the facts and records and corr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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