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TMI Blog2019 (12) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Registrations by bifurcating their existing facility into two units? - HELD THAT:- Coming to the phrase independent texturizer used in the Notification No 6/2000-CE, we are of the view that independent texturizer, is a person (legal or natural) who procures the partially oriented yarn from the open market and then clears the texturized yarn after texturizing the same. We are holding this view because the phrase independent texturizer used in the notification is followed by the phrase who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters , which implies that he has no facility to produce the partially oriented yarn. Thus procurement of the partially oriented yarn which is the raw material to start with for him can be only by way of purchase. Undisputedly KSF(PUY) and KSF (POY) are having common sales tax registration and PAN and are proprietorship concerns of M/s CEL, before and after bifurcation. The phrase interpreted was his factory i.e. the factory of manufacturer. In our view said decision is distinguishable, in view of the use of word independent to qualify the texturizer , in the notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated the facts with the intention to evade payment of duty and hence in our view extended period of limitation has been correctly invoked against the appellants in the present order. Whether interest on the demand made can be sustained? - HELD THAT:- This is a civil liability of the assessee, who has retained the amount of public exchequer with himself and which ought to have gone in the pockets of the Central Government much earlier - Upon reading Section 11AB together with Sections 11A and 11AA, the interest on the duty evaded is payable and the same is compulsory and even though the evasion of duty is not mala fide or intentional. Whether penalties are imposable on appellant? - HELD THAT:- The order of Commissioner to the extent of imposing penalties under Rule 173Q of the Central Excise Rules, 1944 or Rule 25 of the Central Excise Rule 2002 as the case may be read with Section 11AC of the Central Excise Act, 1944 upheld - However the quantum of penalty needs to be redetermined after determination of actual duty evaded by the appellants. Whether penalties are imposable on four functionaries in the unit? - HELD THAT:- In view of the specific finding recorded by the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2002 read with section 11AC of Central Excise Act, 1944. 5) I order recovery of interest at appropriate rate on the duty confirmed at Sr No (3) above, from them under the provision of Section 11AB of the Central Excise Act, 1944. (B) In respect of Show Cause notices mentioned at (Sr No 1 to 32) of Table at Para No 12, covering the period from April 2001 to June 2001:- 1) I hereby reject the declaration No 1/2000-01 dated 8.5.2000 filed under Rule 173B of the Central Excise Rules, 1944 by M/s KSF (PYU) 2) I hereby disallow the exemption benefit under notification 6/2000-CE dated 1.3.2000 as claimed in declaration No 1/2000-01 dated 8.5.2000 under Rule 173B of the Central Excise Rules, 1944 by M/s KSF (PYU) 3) I hereby confirm the demand of Central Excise duty totally amounting to ₹ 23,74,27,559/- (Rupees Twenty Three Crore Seventy Four Lakhs Twenty Seven Thousand Five Hundred and Fifty Nine only) for the period April 2001 to June 2001 and order the recovery from them under Section 11A of Central Excise Act, 1944. 4) I impose penalty of ₹ 23,74,27,559/- (Rupees Twenty Three Crore Seventy Four Lakhs Twenty Seven Thousand Five Hundred and Fifty Nine only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ODVAT/ CENVAT Credit and paid the Central Excise duty advalorem. 2.2 The requested for bifurcation of their existing unit into two units for implementing, product management concept policy and requested separate Registration on the basis of information provided by them and as requested the existing manufactory of appellant at C-51, MIDC, Mahad registered under Central Excise, was altered by constructing a suitable compound wall and in/ out gate. The existing Central Excise Registration was amended was amended in name of KSF (PYU) and a new Central Excise Registration was given to KSF (POY) with effect from 26.04.2000. 2.3 M/s KSF (PYU) filed a classification declaration as per Rule 173B of the Central Excise Rules, 1994 claiming the benefit of exemption under Notification No 6/2000-CE dated 1.03.2000 (Sr No 114) as per which `the duty on "texturized yarn" classifiable under Heading No 5402.42 was specific rate, subject to condition that the manufacturer of the goods is an independent processor and does not have facilities of manufacture of POY in their factory (including plants and machinery). They also claimed specific rate of duty as per the entry at Sr No 134 of same notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king as one composite unit, is evident from the following: * Prior to 26.04.2000.for Sales Tax Department, KSF (Prop CEL) Mahad was functioning as single unit engaged in manufacturing of POY and Processed Yarn. Accordingly, it was registered with the Sales Tax Department in the same name and for the place of business "C-61 MIDC Mahad". Even after bifurcation into two units, no change was incorporated in the sales tax registration. Since these two units were working under "Packaged Scheme of Incentive", separate registration was needed for each unit but was never taken. Thus the manufacturing site at C-61 MIDC Mahad, continued to function as KSF even after bifurcation. They also filing monthly sales tax returns in name of KSF only through CEL, Pune. * For SICOM Ltd (State Investment Corporation of Maharashtra) which had issued them eligibility certificate for tax exemption of ₹ 86.23 crores vide F No Fine (1) 1993/Exemption/EC-3701 dated 18.07.1998, they continued to function as single unit prior and after 26.04.2000. * Income Tax PAN for the two bifurcated units continued to be the same as was used earlier by KSF (Prop CEL). Also for TDS, the account number allotted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/MVII 27.12.01 7349010 14.04.01 to 16.04.01 5 V/Adj (SCN) 15537/2001/MVII 27.12.01 9353561 17.04.01 to 18.04.01 6 V/Adj (SCN) 15538/2001/MVII 27.12.01 7289656 19.04.01 to 20.04.01 7 V/Adj (SCN) 15539/2001/MVII 27.12.01 5256257 21.04.01 to 22.04.01 8 V/Adj (SCN) 15540/2001/MVII 27.12.01 8811753 23.04.01 to 24.04.01 9 V/Adj (SCN) 15541/2001/MVII 27.12.01 8539632 25.04.01 to 27.04.01 10 V/Adj (SCN) 15542/2001/MVII 27.12.01 9281837 28.04.01 to 30.04.01 11 V/Adj (SCN) 1584/2002-03 28.05.02 8643306 01.05.01 to 04.05.01 12 V/Adj (SCN) 1585/2002-03 28.05.02 7135205 05.05.01 to 08.05.01 13 V/Adj (SCN) 1586/2002-03 28.05.02 7797322 09.05.01 to 11.05.01 14 V/Adj (SCN) 1587/2002-03 28.05.02 7871105 12.05.01 to 15.05.01 15 V/Adj (SCN) 1588/2002-03 28.05.02 6345687 16.05.01 to 16.05.01 16 V/Adj (SCN) 1589/2002-03 28.05.02 5506674 17.05.01 to 18.05.01 17 V/Adj (SCN) 1590/2002-03 28.05.02 7821409 19.05.01 to 23.05.01 18 V/Adj (SCN) 1591/2002-03 28.05.02 7130691 23.05.01 to 24.05.01 19 V/Adj (SCN) 1592/2002-03 28.05.02 5398095 25.05.01 to 31.05.01 20 V/Adj (SCN) 1595/2002-03 29.05.02 2932484 01.06.01 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as an independent processor. The definition of an independent texturizer is a person who does not have the facility in his factory including plant and machinery for producing POY. They in relation to their factory at KSF (PYU) are an independent texturizer and from the phrase used in the exemption notification 6/2000-CE, the benefit of that notification could not have been denied to them. iii. In the impugned order commissioner has erroneously taken the sales value as assessable value for determination of the duty short paid. Commissioner should have allowed the deductions claimed and set out in the Chartered Accountant Certificate submitted by them. They had submitted voluminous and adequate documents for claiming the deductions Commissioner should have considered the same and determined the assessable value after taking into account the deductions claimed. iv. In the impugned order it has been observed that they were taking CENVAT credit on the inputs used in the manufacture of final products even after 26.04.2000 and therefore were not entitled to the benefit of the notification No 6/2000-CE dated 1.03.2000. The input credit was taken in respect of the inputs used in manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . * The decision of Hon'ble Apex Court in case of Grauer & Weil (India) Ltd 1994 (74) ELT 481 (SC) is distinguishable. * In case of Bhilosa Industries Private Ltd [2015 (317) ELT 283 (T-Ahmd)], Ahmedabad bench has while considering the expression "in his factory" in the same notification state that, will mean the factory of manufacturer and the same factory. * In case of Amaravathi S V Paper Mill Ltd [2010 (256) ELT 679 (SC)], same notification was considered by the Supreme Court and the appeal filed by the revenue in similar sets of fact was dismissed.; * Tribunal has in case of Bansi Paper Mills Pvt Ltd. [2014 (306) ELT 650 (T)] held that contention of the Revenue that merely because there was no separate registration there was no separate factory is devoid of merit. Similar view has been taken in case of Sintex Industries Ltd [2013 (287) ELT 261 (Guj.)], Rajalakshmi Paper Mills Ltd [2005 (179) ELT 161 (Tri.-Chennai)] and Vardhman Spinning an General Mills Ltd [2000 (115) ELT 94 (Tribunal)] * Decision of the Hon'ble Bombay High Court in case of Swadeshi Dyeing & Bleaching Mills (P) Ltd [1989 (41) ELT 224 (Bom)] is clearly distinguishable. * Section 13 of General Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject to the conditions specified this notification prescribedo * At Sr No 114, duty @ ₹ 2.50 per kgs on texturized yarn manufactured by an independent texturizer who does not have facility in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyester; * At Sr No 134, duty @ ₹ 9 per kg on dyed, printed, bleached or mercerised yarn, whether single, multiple(folded) or cabled. Manufactured in a factory which does not have the facilities (including plant and equipment) for production of single yarn. * M/s KSF (Prop CEL) was engaged in manufacture of partially oriented yarn (POY) and different types of processed yarn including Polyester Texturized yarn in a single composite plant having two * one for manufacture of partially oriented yarn (POY) * Other for manufacture of texturized yarn. * Almost all POY manufactured in POY section was sent to texturizing section for texturization. All the texturized yarn was then cleared on payment of Central Excise duty @ 36.8% advalorem (16% Adv + 16 % Adv + 15% Addl duty). * Notification No 6/2000-CE dated 01.03.2000, referred earlier granted exemption subject to certain conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly on 01.03.2000, M/s KSF were not an independent texturizer as they had the facility to manufacture POY in their factory at Mahad and hence not entitled to the benefit of the Notification No 6/2000-CE dated 01.03.2000. * In order to claim the benefit of exemption under the said Notification, appellants bifurcated the unit into two KSF (PYU) and KSF(POY) and obtained separate registration with effect from 26.04.2000. As per the appellants they are two separate registered entities from that date and hence separate factory, for the purpose of said notification. Thus KSF (PYU) qualifies to be "independent texturizer" from that date and entitled to the benefit of exemption under the said notification. * It is settled position in law that what cannot be done directly cannot be done indirectly. * Tribunal has in case of Dhampur Sugar [2001 (129) ELT 73 (T-Del)] specifically held that having multiple registrations under Central Excise, will not make a single factory, multiple factory. Appeal filed by the revenue was dismissed by the Apex Court as reported at [2007 (216) ELT A 23 (SC)] * The term factory has been defined by Section 2(e) of the Central Excise Act, 1944. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17) ELT 283 (TAhmd)] is erroneous because the said decision besides being distinguishable on facts is an order in sub silentio. Also appeal against this order has been admitted by the Apex Court * The decision of tribunal in case of appellant, holding that "two premises in question clearly constitute two separate factory", was not the issue before the tribunal. There is no discussion in the order on this issue and event the definition of factory as per Section 2(e) of Central Excise Act, 1944 has been considered . Hon'ble Supreme Court has in case D J Malpani [2019 (366) ELT 385 (SC)] has held that "Salmond on Jurisprudence Twelfth Edition p.15h states that a decision held is not binding since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", therefore, would not be followed. The author also states that precedents sub silentio and without arguments are of no moment.". Thus that decision has no binding precedentiary value. * He re-iterates the findings in the order of adjudicating authority on issues of limitation, valuation, interest and penalty. 5.1 We have considered the impugned order along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification shall apply on or after the first day of April, 2000. Explanation.- For the purposes of this notification, the rates specified in columns (4) and (5) of the said Table are ad valorem rates, unless otherwise specified. Table S. No. Chapter or heading no. or subheading No. Description or goods Rate under The First Schedul E Rate under The Second Schedu Le Conditi on No. 114 54.02 Texturised yarn (including draw twisted and draw wound yarn) of polyesters manufactured by an independent texturiser who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters falling under sub-heading No. 5402.42 ₹ 2.50 per kg. Nil 17A 134 5402.31, 5402.32, 5402.39, 5402.41, 5402.42, 5402.43, 5402.49, 5402.51, 5402.52, 5402.59, 5402.61, 5402.62, 5402.69, 5403.20, 5403.31, 5403.32, 5403.33, 5403.39 5403.41, 5403.42 or 5403.49 Dyed, printed, bleached or mercerised yarn, whether single, multiple (folded) or cabled, manufactured in a factory which does not have the facilities (including plant and equipment) for producing single yarn ₹ 9 per kg. Nil 22 Condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " The explanation referred by the appellant states the same as has been stated in the notification and do not add any value to the argument of the appellants. 5.3.3 The entire case of the appellant hinges around the interpretation of the phrase "independent texturizer who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters". Appellants have heavily relied on the decision of the Apex Court in the case of Rollatainers Ltd, to argue that after bifurcation and grant of two separate registrations, both KSF (PYU) and KSF (POY) are two separate factories, and hence they should be considered independent of each other. Thus the KSF (PYU) being independent texturizer, having no facility to manufacture partially oriented yarn in its factory, is eligible for the exemption available under the notification. They also rely on the decision of tribunal in their own case wherein, tribunal has upheld the order of Commissioner (Appeal) setting aside the order of Deputy Commissioner revoking the twin registrations granted to them. They state that in view of the said decision, the issue is no longer res-integra and shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separately registered premises, which function as two different factories. The contention of the Revenue that the respondents put up a fence for creating the new factory for the sole purpose of wrongly availing the benefit of Notification No. 6/2000 and therefore, the respondents' request for separate registration should not have been considered, is not tenable as we have already noted that the respondents have decided to undertake the exercise of separation of factory in Feb. 2000 itself in order to achieve certain efficiencies by creating separate product groups, although the application was filed after the issue of Notification No. 6/2000, and all aspects have been considered by the authorities before granting separate registration for KSF (POY) and amending the existing registration already granted in favour of KSF (PYU) in April, 2000. The point raised that in respect of the Pune factory the respondents' application for separate registration had been rejected, is a new ground which neither raised in the show cause notice nor in the order of the Dy. Commissioner and the factual position is that in Pune, there was only one building and, therefore, the factory could not be segre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (T-Del)], following was held: 4. We have considered the submissions of both the sides. As per Section 2(e) of the Central Excise Act "factory" means any premises, including the precincts thereto, wherein or in any part of which excisable goods other than the salt are manufactured, or wherein or in part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on. It has not been disputed by the Revenue that all the three plants manufacturing different excisable goods are situated in the same premises. The Revenue is treating them as different factory only on account of appellants taking three registrations under Rule 174 of the Central Excise Rules. The number of registrations, in our view, will not decide the number of factories unless and until they are situated in different premises. It is very clear from the definition of the term "factories" that all the three units will be regarded as one factory as all the excisable goods are manufactured in the same premises. Similar views were expressed by the Appellate Tribunal in the case of J.K. Synthetics Ltd. (supra) wherein it was held that as two units fall within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is also not the case of revenue that end product of one factory is raw material for the other factory. From the above facts it is apparent that there is no commonality between the two factories, both are separate establishments run by separate Managers though at the apex level it is maintained by the appellant company. There are separate staff, separate finished goods. Simply because both the factories may have common boundaries that will not make it one factory. Accordingly, we are of the opinion that the view taken by the Tribunal does not appear to be well-founded and likewise, the view taken by the Commissioner, Central Excise. Accordingly, we allow both these appeals, set aside the order of the Tribunal passed on June 7, 2002 as well as the order passed by the Commissioner, Central Excise, New Delhi-III on September 28, 2001 in both the appeals. No order as to costs. As is evident from the above para the case of Rollatainers is distinguishable on more than one count from the case of Dhampur Sugar and the facts in present case. The undisputed facts in the present case are: i. The managerial control, administrative control and overall control of M/s CEL remains unchanged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were totally independent of the activities in the rest of the premises." 11. From a bare perusal of the definition of factory under Section 2(m) of the Factories Act, it is patent that if on any premises including the precincts thereof ten or more workers are working or were working on any day of the preceding twelve months, and in any part thereof a manufacturing process is being carried on with the aid of power it would be a factory. Ordinary, meaning of the word `premises' is a piece of land including its buildings or a building together with its grounds or appurtenances and precincts mean the areas surrounding a place. The words "any premises including the precincts thereof" under Section 2(m) are therefore wide enough to include all buildings with its surroundings which form part of one unit. If therefore in such an area ten or more workers are working and in any part thereof manufacturing process is being carried on with the aid of power it would be a factory within the meaning of Section 2(m). 12. Since both the Collector and the Tribunal have recorded their respective findings as quoted above, taking into consideration all relevant facts and relevant factors in the ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les tax registration and PAN and are proprietorship concerns of M/s CEL, before and after bifurcation. The interpretation put by the tribunal in case of Bhilosa Industries Pvt Ltd [2015 (317) ELT 283 (T-Ahd)] was in respect of the phrase which was not identical to the phrase which we are interpreting. The phrase being interpreted by the tribunal in that decision was "Yarns procured from outside and subjected to any process other than texturising, by a manufacturer who does not have the facilities in his factory (including plant and equipment) for manufacture of yarns or textured yarn (including draw twisted and draw wound yarn) of Heading 54.02 or 54.03." The phrase interpreted was "his factory" i.e. the factory of manufacturer. In our view said decision is distinguishable, in view of the use of word "independent" to qualify the "texturizer", in the notification under consideration. In our view if the phrase is considered as a whole then we find that word "independent" qualifies the "texturizer" and not the factory. So if the texturizer is procuring the "partially oriented yarn" from any of his factory then he will not qualify to be an "independent texturizer". Thus the benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 4 of the Central Excise Act, 1944. In the absence of such evidence, their claim to deduct the same from the assessable value cannot be accepted and is hence rejected. 45. As regards, their plea that the excise duty @36.80% adv, is required to be deducted from the assessable value, it is seen that the goods produced by KSF (PYU) &KSF(POY) were sold through depot of CEL situated allover India. The goods of the erstwhile unit were also sold through same mode, and M/ s CEL who were selling the goods manufactured at different manufacturing sites/divisions through depot, were regularly issuing a confidential document namely sales policy which indicated the rate per kg for all the qualities of yarn produced and sold by CEL. It also indicated the scheme of various discounts to be given to customers. On closer examination of these sales policies issued regularly from time to time by CEL, it was mentioned conspicuously that the prices (Rs. per kg.) are inclusive of Central Excise duty @ 36.8%. Thus, the same are found to be conclusive evidence to consider that CEL were recovering the Central Excise duty@ 36.8% from the customers on sale of goods produced at KSF(PYU) at Mahad, and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue from the sale value at depot. Commissioner should have considered and allowed the admissible deductions from the sale value for determination of assessable value. While doing so Commissioner should have taken into account the order of the Hon'ble Apex Court in case of Bombay Tyre International [1983 (14) ELT 1896 (SC)] and Madras Rubber Factory [1995 (77) ELT 433 (SC)] and other decisions of Apex Courts on the subject, and affirmed in case of Purolator India Ltd {2015 (323) ELT 227 (SC)] in following words: "25. This judgment does not in any manner deviate from the settled legal position so far as cash discounts are concerned as has been laid down in Union of India v. Bombay Tyre International (supra) and Government of India v. MRF (supra). In fact, as has been pointed out earlier, this judgment did not concern itself with the "price" of excisable goods that must be ascertained only at the time of removal from the factory gate. Since this Court was only concerned with whether or not certain amounts by way of sales tax were or were not to be deducted from "price", the said judgment has little application to the facts of the present case." 5.4.3 Hence for the determination of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Last but not the least is the ethics (to be precise, the lack of it) of transferring the burden of tax liability to the shoulders of the guideless good citizens from those of the 'artful dodgers'. It may, indeed, be difficult for lesser mortals to attain the state of mind of Mr. Justice Holmes, who said, "Taxes are what we pay for civilized society. I like to pay taxes. With them I buy civilization." But, surely, it is high time for the judiciary in India too to part its ways from the principle of Westminister and the alluring logic of tax avoidance. We now live In a welfare state whose financial needs, if backed by the law, have to be respected and met. We must recognize that there is behind taxation laws as much moral sanction as behind any other welfare legislation and it is a pretence to say that avoidance of taxation is not unethical and that It stands on no less moral plane than honest payment of taxation. In our view, the proper way to construe a taking statute, while considering a device to avoid tax, is not to ask whether the provisions should be construed literally, or liberally, nor whether the transaction is not unreal and not prohibited by the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time. However, we now find that this is an inefficient way of managing our business. The market for POY and the market for value added products is different and different strategies are required to address the market. Production and planning have to be altered in the light of what the market requires. It has therefore been decided to revamp the traditionally followed management structure and replace the same with concept of Product Group management which is widely practiced by many good companies. Under the Concept, it is the product which is the main theme and not the location/site. Accordingly certain types of products manufactured at all the three sites were brought under one management group which was responsible for all the functions i.e. Production, Marketing, Finance, Administration, Purchase, etc., relating to those products. The different product groups formed out of various products manufactured at above said three sites are as below: Product Name Group Products manufactured at different sites POY Chips, POY Textile (Processed Yarn) Yarn PFY. NFY (Processed yarn) Industrial Yarns Industrial Yarn and fabric Implementing the Product Group concept at Mahad sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that presently our products attract ad valorem excise duty @ 36.8% and we avail MODVAT/CENVAT' credit on inputs as well as capital goods used by us. After segregation, the product of new unit - POY will attract excise duty @ 36.8% ad valorem and will continue to avail CENVAT credit as at present. There will be no backward movement of material from the Processed Yarn Unit to POY Unit. All the clearances from the POY Unit including the requirements if any, of Processed Yarn Unit will be made, only after payment of applicable excise duties. The products of the other unit - Texturised and Draw Twisted/Draw Warper Yarn will be chargeable to a specific duty @ ₹ 2.87/kg. Dyed Yarn will be chargeable to a specific duty of ₹ 10.35/kg and Twisted yarn manufactured out of duty paid Textured or Draw Twisted (Processed) Yarn will be continued to be exempted. Further in view of the applicability of specific duties, the Processed Yarn unit will not be availing CENVAT credit either on inputs or on capital goods. You are therefore requested to grant us the registration at an early date .We will be pleased to provide you any further information in this regard." 5.5.4 The contents of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of suppression with intention to evade payment of duty exist in the present case and it has been substantially expend in para 31.2 to 32 above, hence, I am inclined to hold that the extended period to demand duty has correctly been invoked in the impugned notice and the impugned SCN is not barred by the limitation." 5.6. Whether interest on the demand made can be sustained. 5.6.1 Since we have held in the favour of demand of duty the demand of interest will follow as have been held by the Hon'ble Bombay High court in case of P V Vikhe Patil SSK [2007 (215) ELT 23 (Bom)]. Hon'ble Bombay High Court has stated as follows: "10. So far as interest u/s. 11AB is concerned, on reference to text of Section 11AB, it is evident that there is no discretion regarding the rate of interest. Language of Section 11AB(1) is clear. The interest has to be at the rate not below 10% and not exceeding 36% p.a. The actual rate of interest applicable from time to time by fluctuations between 10% to 36% is as determined by the Central Government by notification in the Official Gazette from time to time. There would be discretion, if at all the same is incorporated in such notification in the gazette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise duty, all the said notices have indulged in above acts of commission and omission and as such proviso to Section 11A(1) is clearly invokable in this case. The said differential duty short paid is therefore recoverable along with interest from them in terms of Sec 11A and 11M/ 11AB of Central Excise Act, 1944 read with Rule 9(2) read with Rule 173 B of CER, 1944 during relevant period as mentioned in the respective SCNs. 49.1 As regards the noticees at Sr. No. 1 to 4, I find that they have contravened the provisions of Rule 9, 49, 173B, 174, 173 F and 173G of C.Ex., Rules,1944andRule 6,8 and 11 of Central Excise Rules, as applicable during the respective period as proposed in the respective SCN, with an intent to evade payment of Central Excise duty and as such rendered themselves liable for penal action under section 11AC of CEA, 1944 read with Rule 173Q of CER,1944 and Rule 25 of CER,2002forthe respective period as applicable." 5.7.2 Hon'ble Supreme Court has in case of Rajasthan Spinning and Weaving Mills {2009 (238) ELT 3 (SC)] laid down the law as follows: "18. One cannot fail to notice that both the proviso to subsection 1 of Section 11A and Section 11AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 and 50.2 of his order recorded as follows: "50. In his statement dated 27.02.2001, recorded under section 14 of the Central Excise Act, 1944, Shri D.B. Roongtha, admitted that, as per the direction of Shri G.M. Jain, Vice President(Fin), he filed the application dated 16.03.2000 for separate registration of units. He was aware that there was no physical shifting of machines and also there was no change in the overall managerial, administrative, financial and other control of M/ s. CEL, over erstwhile KSF visa- vis the bifurcated units of KSF during the segregation of the units and such separate registrations were sought to implement concept of product group management. Similarly, in his statement dated 05.03.2001 recorded under Section 14 of Central Excise Act, 1944, Shri G.M. Jain, Vice President (Fin) of M/s. CEL, admitted that obtaining such separate registration was a collective decision of body of Senior Executives including product group heads viz Shri G.M. Singhvi, Sr. President, Shri S.B. kamath, Sr. Vice President (P.G. Textile), Shri M.N. S. Rao, Sr. Vice President (POY Section) and he himself. Similarly, Shri S.B. Kamath, Sr. Vice President, vide his statement dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is not admissible to them then they should be allowed the benefit of CENVAT credit of duty paid on the inputs. 5.9.2 We do not have any hesitation in holding that the benefit of CENVAT/ MODVAT credit in respect of the duty paid on the inputs used by them in manufacture of finished goods was admissible to them if they had not cleared the goods by availing the benefit of exemption under Notification No 6/2000-CE and its successor notifications. However the benefit of CENVAT/ MODVAT credit can be allowed only on establishing the claim to such credit by way of production of requisite documents before the adjudicating authority. 5.9.3 Since the matter is being remanded for re-determination of the value and quantum of duty short paid by the appellants, appellants may make the claim towards admissible CENVAT/ MODVAT credit before the adjudicating authority in remand proceedings, who will consider the claim and allow the admissible CENVAT/ MODVAT Credit. 6.1 Appeal No E/86129, 86130, 86131, 86132, 86153, 86154, 86155, 86156 & 86157/2014 are partially allowed and the matter remanded back to the adjudicating authority for redetermination of assessable value, admissibility of MODVAT/C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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