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TMI Blog2018 (9) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... , on that ground it cannot be held that the appellant M/s AO was cleared Chrome Plate spanners under the guise of forgings to M/s AI - M/s AI is having facility of electroplating and installed the machinery in their factory. The same has been found installed by the authorities below. In that circumstances also, the benefit of doubt goes in favour of the appellants, therefore, the goods cleared from the premises of M/s AI are entitled under exemption of Notification No. 50/2003-CE dated 10.06.2003 - the demand cannot be raised on account of denial of benefit of exemption Notification No. 50/2003-CE dated10.06.2003, therefore, the demand of ₹ 57,81,475/- is set aside. CENVAT Credit - it is alleged that appellant M/s AO has not received the inputs and availed cenvat credit without receipt of the goods - Held that:- The allegations against the appellant M/s AO is that they have not received the goods are based on the various statements, no cross objection of the persons whose statements have been relied and granted and no other corroborative evidence has been produced on record by the Revenue in support of the allegation - it cannot be held that the appellants had not receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice was issued to the appellants on the following grounds: (A) M/s AO has cleared finished goods to M/s AI in the guise of forgings and mis-used the exemption Notification No. 50/2003-CE. (B) M/s AO has fraudulently availed cenvat credit of ₹ 55,48,523/-without actually receiving goods in its factory (C) As M/s AO and M/s AI are related person and the M/S AO has undervalued its goods sold to M/s AI. 3. The matters were adjudicated and benefit of exemption Notification was denied. Consequently, the duty was demanded and cenvat credit sought to be denied on inputs received by M/s AO and it was also held that the clearance made by M/s AO to M/s AI has been undervalued, therefore, deferential duty has been demanded. Against the said order, the appellants are before us. 4. The ld. Counsel for the appellant submits that as M/s M/S AO is located in the state of Himachal Pradesh and cannot avail the benefit of area based exemption, therefore, the question of mis-use of exemption Notification by M/s AO does not arise. The case of the Revenue is that the M/s AO has cleared fully finished chrome plated spanners under the guise of forgings. It is his submission that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it has been alleged that forgings of spanners was also received at M/S AO and the same were also shown to have been cleared by M/s AI as fully finished spanners. It is submits that the ld. Adjudicating authority did not appreciate the fact that the M/S AO had transported the said forgings along with forgings manufactured by it to M/s AI and this procedure was adopted just to save transportation cost as transportation of small quantity of spanners was not economically viable. It is further submits that M/s AI was having electroplating plant as well as other machines required for manufacturing of spanners, were found installed during the course of search by the DGCEI officer. No reason why M/s AI would keep not to utilize its machines and, instead, get fully finished chrome plated spanners from M/s AO, especially when the product would be cheaper at M/s AI due to various subsidies and incentives offered by State and Centre Government. Further, it is submits that M/s AI had regularly filed its monthly returns with the jurisdictional Range. The said monthly returns have never been questioned and, were accepted by department. Therefore, without questioning the returns filed by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and private records unless corroborated by any other evidence. 8. He is further submits that for the invoice issued by M/s Atul Kumar Rohit Kumar, invoice issued by M/s K.J. Steel Rolling Mills, the goods were directly sent to the job worker or cleared as such upon payment of duty, therefore, cenvat credit cannot be denied. 9. In some of the case, cenvat credit sought to be denied on the ground that there was no entry in the private records but their entry is in the statutory records and the said goods has been used for manufacture of their final product. In that circumstances, it cannot be said that the goods has not been received. The statement recorded during the course of investigation never allowed for cross objection and merely on the basis of the statement, without any corroborative evidence, the statement cannot be relied upon. 10. On the issue of undervalued of its goods sold to M/s AI. It is his submissions that the appellants are clearing the said goods to independent buyers as well as to M/s AI. These facts has not been disputed, therefore, the Rule 9 read with Rule 8 of the Central Excise Valuation Rules, 2000 will not applied to the facts of this case. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reason that the quantity shown in the Electroplating Production Reports or Work Order Progress Chart are more than the quantity recorded in RG 1 register. It is above said explanation has been ignored by the ld. Commissioner. Further, the appellant has explained CP stands for Cold Pressed whereas it has been presumed by the adjudicating authority as Chrome Plate and explanation given by the appellant by way of affidavits has not been considered. In that circumstance, it cannot be presumed that CP is used for Chorme Plates , therefore, on that ground it cannot be held that the appellant M/s AO was cleared Chrome Plate spanners under the guise of forgings to M/s AI. We also take a note of the fact that M/s AI is having facility of electroplating and installed the machinery in their factory. The same has been found installed by the authorities below. In that circumstances also, the benefit of doubt goes in favour of the appellants, therefore, the goods cleared from the premises of M/s AI are entitled under exemption of Notification No. 50/2003-CE dated 10.06.2003. In view of the above, the demand cannot be raised on account of denial of benefit of exemption Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Excise Valuation Rules, 2000 are applicable to this case or not? For better appreciation of the provisions of Rule 10, Rule 9 and Rule 8 are extracted here below: Rule 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture or other articles, the value shall be 110% of the cost of production or manufacture of such goods. Rule 9. When the assessee so arranges that the excisable goods are not sold by him except to or through a person who is related in the manner specified in either of sub-clause (ii) or (iii)or (iv) of clause (b) of sub section (3) of Section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal, to buyers (not being related person); or where such goods are not sold to such buyers, to buyers (being related person), who sells such goods in retail: Provided that in a case where the related person does not sell the goods but uses or consumes such goods in the production or manufacture of articles, the value shall be determined in the manner specified in Rule 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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