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TMI Blog2018 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... al officer to get them reversed and accordingly the same has been done by the appellant. Although, the appellant has contested that the reversal was done under the duress, threat and coercion. However, we find that the authorised signatory of the appellant has suo moto reversed the credit. Thereafter, the appellant has taken the credit of same with intimation to the department. This cannot be done without following the appropriate procedure under Cenvat Credit Rules, 2004. Having not produced the documents at the strength of which credit was taken by the appellant before the adjudicating authority, we do not find that any ground for allowing such credit to the appellant - as the appellant has not only wrongly taken the credit of Cenvat credit and but also utilised the same which was not available to them under the Cenvat Credit Rules, the department has rightly issued the show cause notice under the provisions of imposition of interest and confirmed the same after following the adjudication process. Appeal dismissed - decided against appellant. - Appeal No. E/51089/2018-DB & E/50538/2018-DB - Final Order No. 53225-53226/2018 - Dated:- 2-11-2018 - Mr. Bijay Kumar, Member ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to that effect. 3. During the stock taking of the finished goods and input in the factory, it was noticed and for which Panchnama was prepared and handed over to the appellant on 9.1.2009 but without any supporting documents. It is also alleged that the Panchnama of shortage of the inputs/finished goods was done in incorrect way by counting the ingots and billets and multiplying the same with a single billet and extrapolating the same for entire stock. Thus the estimate of shortage of the billets by the officers was alleged to be false and inaccurate and the act of debiting of Cenvat credit of the aforestated amount in RG 23A C Part-II by the departmental officer was found to be arbitrary and illegal. It is also alleged by the appellant, that no physical weighment was done on the date of visit by the Central Excise officers i.e. on 11.12.2008. Though the Panchnama has been prepared for alleged shortage but the same has been computed taking such quantity of MS bars of different sizes by counting bundles only instead of actual shortage. That the shortage was hypothetical in nature and not actual one as it was not possible for the departmental officer to conduct stock taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural justice. We do not record any observations on the merits of the case and keeping all the issues open after following the due process of law. The adjudicating authority has passed the impugned order after hearing the appellant and giving opportunity to the appellant to file the reply in the show cause notice dated 12.1.2010. 5. The appellant has filed the written submissions before the ld. Adjudicating authority : (i) That they had written a letter dated 5.1.2009 to the Commissioner of Central Excise, Jaipur that officers of Central Excise had taken their RG 23A Part-II register, wherein re-credit of ₹ 2,03,42,121/- was taken by them vide Entry No. 83 dated 30.12.2008 and that this register had been retained by the officers, without making any Panchnama or without giving any receipt for the same. It was also explained that the credit was taken for the amount as the officers had forced the factory staff on 11.12.2008 to show Nil balance in RG 23A Part-II against the actual balance of ₹ 2,03,42,121/-; (ii) That in order of response to Department s letter they had informed through letter dated 9.1.2009 to the Assistant Commissioner of Central Excise, Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant that for the aforesaid amount, no show cause notice has been issued to them. Further, a corrigendum notice was issued by the Deputy Commissioner of Central Excise, Bhiwadi with the direction that restrained unit further order from transferring or charging the property mentioned in the said order in any way. Another letter C. No. IV(16)Rathi/Tech/2009/1905 dated 21.2.2009 was received by them stating that a memorandum-cum-notice dated 10.2.2009 had been served requiring to pay an amount of ₹ 2,26,28,938/- being the amount payable under Section 11A of the Central Excise Act, 1944 and under clause (ii) of Clause (C) of Section 142(i) of Customs Act, read with Attachment of Property of Defaulters for Recovery of Government Dues Rules, 1995 as made applicable to like matters in the Central Excise matters by virtue of Notification No. 68/63-CE dated 4.5.1963. (vii) That they were informed by Chief Commissioner of Central Excise, Jaipur has approved the restraining order of their plant and machinery already attached and granted facility to pay arrears in 12 month instalments which they were forced to accept. (viii) That the Department gave a calculation chart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n detected on 11.12.2008. (xii) It is also alleged that the ld. Adjudicating authority failed to appreciate that the actual balance in the Cenvat credit account in RG 23A Part-II was ₹ 2,77,49,625/- instead of balance to the tune of ₹ 72,75,421/- stated to have been found by the department. (xiii) The ld. Commissioner also ignored the fact that the appellant had not availed the Cenvat credit of an amount of ₹ 2,04,74,204/- without any valid or prescribed document or without receipt of any input, but it was the amount of re-credit of ₹ 2,03,42,121/- which was available with the appellant. That the officer of the department got the aforesaid amount debited in their Cenvat credit register i.e. RG 23A Part-II due to alleged shortage of 1932 MT of MS bars found short on 11.12.2008 for which there was no basis. The appellant submitted ER-I on 17.2.2009 stating total turnover as well as duty liability of ₹ 2,26,28,938/- for the month of December, 2008 and that re-credit taken by them was lawful inasmuch as a separate show cause notice had been issued for the alleged shortage and demand confirmed by the Commissioner vide the Order-in-Original No. 26/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Vs. CCE 1987 (28) ELT 53 (SC) holding that the provisions of Section 11A(1) and (2) makes it clear that issue of show cause notice and the same has to be adjudicated by the proper after representation by the notice. Appellant also relied upon the decision of Hon ble Supreme Court in the case of Union of India and Ors. Vs. Madhumilan Synthetics Pvt. Ltd. - 1983 (35) ELT 349 (SC), holding that before any demand is made on any person chargeable in respect of non-levy or short-levy or non-payment of duty, a notice requiring him to show cause must be served on him. In the instant case, there is no show cause notice for alleged evasion of ₹ 2,03,42,121/- for which the amount was debited. Ld. Advocate also relied upon the decision of Hon ble Bombay High Court in the case of National Organic Chemicals Industry Ltd. Vs. Union of India 2009 (16) STR 107 (Bom.) holding that the demand and collection of Central Excise duty and recovery of amount under coercion, in absence of any adjudication order and without issue of show cause notice is not sustainable. 6. Per contra, the ld. DR has justified the impugned order stating that the order has been passed as per the reman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of relevant Cenvat Credit Rules, 2004 which is as under, for substantiating the requirements of duty paying documents for availing Cenvat credit: Rule 3(1) of Cenvat Credit Rules, 2004 provides that a manufacturer of final product shall be allowed to take Cenvat credit of : (i) The duties of excise specified in the First Schedule to the Central Excise Tariff Act, leviable under the Excise Act: (ii) to (v) .................... (vi) The education cess on excisable goods leviable under Section 91 read with Section 93 of the Finance Act, 2004; (via) The secondary and higher education cess on excisable goods leviable under Section 136 read with Section 138 of the Finance Act, 2007 Paid on- (i) Any input..................received in the factory of manufacturer of final product. (2) First proviso to sub-rule (4) of Rule 3 of the Cenvat Credit Rules, 2004 provides that while paying duty of excise or service tax, as the case may be, the Cenvat credit shall be utilised only to the extent such credit is available on the last day of the month or quarter, as the case may be. (3) Rule 9 of the Cenvat Credit Rules, 2004 pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the duress, threat and coercion. However, we find that the authorised signatory of the appellant has suo moto reversed the credit. Thereafter, the appellant has taken the credit of same with intimation to the department. This cannot be done without following the appropriate procedure under Cenvat Credit Rules, 2004. Having not produced the documents at the strength of which credit was taken by the appellant before the adjudicating authority, we do not find that any ground for allowing such credit to the appellant. Similarly, as the appellant has not wrongly taken the credit of Cenvat credit and but also utilised the same which was not available to them under the Cenvat Credit Rules, the department has rightly issued the show cause notice under the provisions of imposition of interest and confirmed the same after following the adjudication process. Accordingly, we also hold that the same is sustainable. 10. In view of above, we do not find any infirmity in the order passed by the Adjudicating authority and therefore, the appeal filed by the appellant is not sustainable. Accordingly, we dismiss the appeal filed by the appellant. (Pronounced in Court on 2.11.2018) - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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