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TMI Blog2018 (2) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation - penalty - Held that: - appellants while declaring availement of Cenvat credit in the ER-1 returns have misstated the facts because the invoices, on which they had availed Cenvat credit, were not issued by a manufacturer/importer/registered dealer thereby resulting in availment of irregular and fraudulent credit. As a result, they had mis-declared the availment of Cenvat credit - extended period and penalty rightly invoked. CENVAT credit - capital goods - Revenue is of the view that the same are the capital goods and hence the appellant no.1 should have taken Cenvat credit to the extent of 50% of the duty paid on such capital goods - scope of SCN - Held that: - since the credit held inadmissible to them in the first year, was available to them in the succeeding years. I observe that the issue is not covered by the show cause notice. However, the appellants no.1 are at liberty to avail admissible credit and needs no approval - the order of Commissioner (Appeals), in so far as it relates to the irregular credit of ₹ 53,005/-, is set aside and the matter is remanded back to Commissioner (Appeals) to pass a fresh order after giving fair opportunity to the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the manufacturer M/s Siel Chemical Complex clearly show that the disputed goods were directly sent to appellant no.1. Further, the invoices issued by M/s Chemical Sales to appellant no.1 also note the details of the invoices issued by M/s Siel Chemical Complex, which clearly shows that the disputed duty paid goods covered by invoices issued by M/s Chemical Sales and M/s Siel Chemical Complex were received directly by appellant no.1. It is argued that both the invoices read together clearly show that Cenvat credit was correctly taken as all the particulars required in an invoice listed in rule 9(a)(i) are available on record. It is also submitted that Cenvat credit cannot be denied if the document do not contain all the particulars but contain the details of duty payable, description of goods, assessable value, the Central Excise Registration Number of the person issuing the invoice. In this regard, appellants have pleaded for a cumulative reading of the invoices issued by Chemical Sales and Siel Chemical Complex available at pages 61-74 of the Appeal No.E/58730/2013-EX[SM]. On limitation and penalty, the submission is that the details of Cenvat credit taken and utilized were g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgue that the appellant no.1 had deliberately tried to mislead the authorities and acted in malafide manner. 5. Heard the Ld. A.R. and perused the record including the synopsis of the written submissions filed by the appellant no.1 and appellant no.2. 6. On the issue of availment of inadmissible credit of ₹ 1,53,023/- by M/s Hindustan Unilever Ltd on the basis of invoices issued by M/s Chemicals Sales, Rajpura, I find that there is no dispute that M/s Chemicals Sales was not registered with the Central Excise Department as first or second stage dealer during the impugned period. The law is clear under Rule 9 of Cenvat Credit Rules, 2004 that the invoice should be issued by a manufacturer, an importer or a first/second stage dealer. If the invoice was not issued by any of the above categories, the same cannot be considered as a valid document in eyes of law and the Cenvat credit taken on the basis of such a document is irregular and inadmissible. The contention of the appellant no.1 is that disputed goods were directly sent to appellant no.1 by M/s Siel Chemical Complex and these were duty paid goods and that both the invoices should be read together clearly show that Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of which the party no.1 had availed Cenvat credit amounting to ₹ 153023/-). Perusal of these invoices indicated that these invoices have been issued by party no.2 to party no.1 and bear uncanny resemblance to the invoices issued by registered first/second stage dealer. It is also seen that these invoices have been duly stamped by party no.1 to indicate that credit has been availed by them on the strength of these invoices (no such stamp is seen on the invoices issued by M/s Siel Chemical Complex, Rajpura). Further perusal of the supporting invoices issued by M/s Siel Chemical Complex, Rajpura indicates Consignee as well as Buyer as CHEMICALS SALES SERVICES, 145, SULTANPUR, MEHRAULI GURGAON ROAD, NEW DELHI and not CHEMICAL SALES, BO. DAMNEHRI, RAJPURA. These invoices also clearly mention that the ECC Code of M/s Chemicals Sales Service, 145, Sultanpur, Mehrauli Gurgaon Road, New Delhi as AAEFC0142KXD001, TIN No. as 07150273978 and Sales Tax No. as LC/101/07150273978/03-04 whereas M/s Chemicals Sales, Rajpura has TIN No. as 03302074233. Thus the party no.1 has tried to mislead the adjudication by stating that M/s Siel Chemical Complex had sold the goods to the party n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they had mis-declared the availment of Cenvat credit. None of the judgments relied on by appellants has similar facts wherein the basic document itself was not a valid document on account of non-issuance by a manufacturer/importer /registered dealer. Hence, the extended period has been rightly been invoked and penalty on appellant no.1 has been correctly imposed. 9. As for the penalty on appellant no.2, it is evident from the invoices issued by M/s Chemical Sales that without them being a registered dealer, they were collecting duty of excise and hence their contention that the mention of first and second dealer on top of the invoices was because of general software is not tenable. In this regard, I find that para 11 of the order-in-appeal correctly brings out the reasoning for imposition of penalty under Rule 26(2)(ii), which is reproduced below: 11. Coming to the question of imposing of penalty on the appellant no.2. They have claimed that they had issued the invoices in the capacity of the trader and the invoices issued were commercial VAT invoices. I have seen the invoices and find that but for the registration no. which is not mentioned, the invoices have the contents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible to them in the first year, was available to them in the succeeding years. I observe that the issue is not covered by the show cause notice. However, the appellants no.1 are at liberty to avail admissible credit and needs no approval. After giving this finding and without elaborating further, he has rejected the appeal. Clearly, the order of Commissioner (Appeals) on this issue shows partial application of mind and is seemingly a perverse order. Hence, the matter needs to be examined again by Commissioner (Appeals) so as to give clear findings on this issue and to adjudicate the matter afresh. In view of the foregoing, the order of Commissioner (Appeals), in so far as it relates to the irregular credit of ₹ 53,005/-, is set aside and the matter is remanded back to Commissioner (Appeals) to pass a fresh order after giving fair opportunity to the appellants to defend their case. 11. In the result, (i) the order of Commissioner (Appeals) pertaining to irregular Cenvat credit of ₹ 1,53,023/- on inputs is upheld and the demand of this amount along with interest is confirmed and penalty on both the appellants is upheld. (ii) the order of Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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