9911796707
TMI Blog2018 (10) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... took the view that the goods cleared under those invoices had not suffered any Central Excise Duty. Accordingly, a Show Cause Notice dated 02.02.2005 was issued to the appellants inter alia proposing a demand of an amount of Rs. 12,30,993/- towards duty liability on such clearances for the period 01.04.2003 to 31.12.2003, with interest thereon as also imposition of penalty under various provisions of law. 2. Another Show Cause Notice dated 02.02.2005 was issued to the appellants with reference to ER-3 returns filed by them on 03.02.2004 for the quarter ended June 2003, September 2003 and December 2003 wherein it was seen that appellant had taken CENVAT Credit to the tune of Rs. 15,34,147/- (CENVAT) and Rs. 1,18,544/- (AED(T)) and shown as utilized part of the credit for the purpose of payment of duty on the final products cleared from the factory. It appeared to the Department that out of the above, appellants had taken CENVAT Credit to the tune of Rs. 6,98,444/- on the inputs received during the period from 01.04.2003 to 31.12.2003 based on allegedly ineligible documents. Accordingly, the said Show Cause Notice dated 02.02.2005 proposed disallowance and recovery of such CENVAT C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed below : 1 Total Credit taken Rs. 16,52,691/- 2 Less: Duty demand Rs. 12,30,993/- 3 Excess Credit available Rs. 4,21,698/- The only mistake on their part was delay in filing ER-3 returns, which was filed on 03.02.2004. As per Section 11 A (2B) of the Central Excise Act, 1944, once duty is paid, no notice to be issued. (ii) Both the lower authorities admit the fact that the appellant had raised sale invoice and cleared the goods. Hence, it is not a case of clandestine removal. Since no duty amount was collected by the appellant and the notice also admits this fact, the cum duty benefit may kindly be extended to them. (iii) The Show Cause Notice in para 2 admits the fact that the goods were sent to job worker i.e., for knitting into grey fabric and for dyeing and also for manufacture of garments under delivery challan. Therefore, in this case, the actual manufacturer is the job worker and not the appellant. Hence, the demand, if any, can only be on the job worker and not on the appellant. This is an alternate plea. (iv) Denial of CENVAT Credit to the extent of Rs. 6,98,444/- cannot be a reason for demanding duty again. In other words, once a demand for CENVAT Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s violation of the principles of natural justice. 5.1 On the other hand, on behalf of the Department, Ld. AR Shri. R. Subramaniyan supports the impugned Order. He pointed out that on the date of visit of the officers of the factory of appellants on 16.12.2003 and verification of records, it had been seen that the appellants had not maintained any records for evidencing discharge of Central Excise Duty in connection with the goods cleared by them. Even the invoices which had been recovered did not indicate any details of Central Excise Duty particulars nor any other details, as required in Rule 11 of the Central Excise Rules, 2002. No basic documents required for monitoring day-to-day transactions or payment of duty were available or produced at the time of visit. Only after 11 months from the date of registration of unit and well after detection of offence, the appellants had filed the ER-3 returns in the month of February, 2004. While filing the returns, it was shown as if they had taken the CENVAT Credit to the tune of Rs. 15 lakhs and utilized a part towards payment of duty. Only after taking all these aspects into account in the de novo adjudication also the adjudicating autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating officer is that on the date of the officers' visit on 16.12.2003, the assessee had not maintained any records for availment of input credit. It is however pertinent to note that the Show Cause Notice dated 02.02.2005 while referring to CENVAT Credit availment of Rs. 15,34,147/- and Rs. 1,18,544/- (AED(T)) by the appellants as shown in their ER-3 returns filed on 03.02.2004, has however found fault with some of the availments based on alleged ineligible documents like invoices issued by depot which is not registered, invoices not issued as per Rule 11 of the Rules and invoices issued prior to the date of registration, amounts to Rs. 6,98,444/- only. Thus, less than half of the amount claimed as CENVAT Credit by the appellant in their ER-3 returns amounting to Rs. 6,98,444/- was disputed by the Department. 9.2 We find that in response to a Departmental letter requesting to produce documentary evidence for passing on credit to appellant, a major supplier M/s. Kesharinandan Knit Fabrics (P) Ltd. vide their letter dated 14.05.2010 have submitted ledger copies, certificates issues regarding the credits, copy of their returns, etc. We find from the details submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
