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TMI Blog2022 (7) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... rules. Accordingly, I set aside the impugned order and allow the appeal with consequential relief to the appellants. The view expressed in the decisions also supports the stand of the appellant that they could have followed the procedure as prescribed by Rule 16 (1) on the basis of triplicate copy of their own invoices, the view as expressed by the Commissioner in the impugned order. Appeal allowed - decided in favor of appellant. - Excise Appeal No. 877 of 2012 - A/85620/2022 - Dated:- 12-7-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND MR. AJAY SHARMA, MEMBER (JUDICIAL) Shri Aditya Chitale, Advocate, for the Appellant Shri Sydney D Silva, Additional Commissioner, Authorised Representative for the Respondent ORDER This appeal is directed against order in original No 60- 65/COMMR/M-III/PKA/2011-12 dated 20.02.2012/15.03.2012. By the impugned order following has been held: ORDER A. I determine and demand Rs. 2,96,06,162.00 (Rupees Two crores ninety six lakhs six thousand one hundred sixty two only) being the CENVAT credit u/r 14 of CCR, 2004 r/w section 11A of the CEA, 1944 in respect of all the six demand notices. Since the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed and recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with Sec, 11(A) of the Central Excise Act, 1944 as the same had been wrongly availed by them by following wrong procedure in contravention of sub rule (1) and sub rule (3) of Rule 16 of the Central Excise Rules, 2002 read with Rule 3 and Rule 9 (1) of the Cenvat Credit Rules, 2004. It has been further alleged that the assessee have rendered themselves liable for penalty and appropriate interest. In all the SCNs under reference the assessee had subsequently reversed/paid the amount of Cenvat credit which is also proposed for appropriation. 2.3 Thus revenue was of the opinion that appellant have contravened the provisions of Rule 16(1) and 16(3) of Central Excise Rules, 2002 read with Rule 9(1) of Cenvat Credit Rules, 2004 in as much as that they have availed of wrong Cenvat credit on the strength of invalid documents under Rule 16(1) of Central Excise Rules, 2002 instead of following the correct procedure as laid down under Rule 16(3) ibid. Six show cause notices as detailed in table below were issued to the appellant. Sr. No SCN No. / Date Amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded. In the case of said 6 transformers there was no duty which was not paid or short levied or short paid and neither was this a case of wrong refund. The Appellant states and submits that under the circumstances in none of these cases the provisions of Section 11AB are attracted. At no point of time either during the course of hearing or in its replies filed to the show cause notices or its letters issued had the Appellants ever stated such a thing. The Appellant states and submits that the said so called admitted fact being sought to be thrust up on the Appellant is perverse and bad in law is liable to be quashed and set aside. The reliance of the judgment in the matter of SKF India Ltd. is out of place and the statement attributed in that respect is incorrect. The Appellant states and submits that the issue involved in the Judgment of SKF India Ltd., [2009 (239) ELT 385(SC)] was relating to issuance of supplementary invoices by the assessee in that case. The Assessee in that case had paid duty on goods cleared by them and they had later on paid further duty on the very same goods by raising supplementary invoices. The issue involved in that case was whether interest was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Cenvat Credits that were taken on the basis of documents do not co-relate to the goods that were received back for repairs etc. or that the Cenvat Credit taken is more than that shown on the invoices or that the quantum of reversals. With regard to the allegation that interest is required to be paid by the Appellants, the fact remains that the rule 16 does not lay down any period within which the goods received should be removed from the factory after conducting the process of refining, repair, re-making etc. But it is an admitted fact that once credit has been taken for the goods originally cleared on payment of duties, these become non- duty paid, and in such a situation, this is a clear case of retaining the benefit of duty already paid, and thus till clearance of the goods after repairs, the goods shall be treated as non duty paid and interest is warranted for the period of retention of benefit. The Hon'ble Supreme Court in the case of SKF India Ltd. [2009 (239)ELT385(SC)] has held that interest is payable for delay in payment of revenue on any count. In the case of Ind-Swift Laboratories Ltd [2011 (265) ELT 3 (SC)] Hon ble Apex Court held that in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduce the contents of rule 16 of the CER, 2002. 11.1 It reads Rule 16. Credit of duty on goods brought to the factory. - (1) Where any goods on which duty had been paid at the time of removal thereof are brought to any factory for being re-made, refined, re-conditioned or for any other reason, the Appellants shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. (2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub- section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. [Explanation : The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the identification mark on the goods and associated records maintained by the assessee vis a vis the duty payment particulars in the account current or Cenvat credit register. It needs emphasis that receiving the goods back into the factory does not require any permission. 12. In the present case, there is no allegation that the goods which were received in the factory were not those initially cleared by the assessee on payment of central excise duty or for that matter the Cenvat credit taken in terms of rule 16(1) of CER, 2002 is improper inasmuch as there is no co relating duty paying document to ascertain the authenticity of the Cenvat credit taken. The assessee is well within its right to avail the Cenvat Credit on the basis of their own invoices u/r 16(1) of the CER, 2002. Since these invoices were already in possession of the assessee, taking credit in these circumstances, on the Xerox copies of their own invoices cannot be faulted. Further, there is no allegation in the show-cause notice that the original triplicate copies were not in possession of the assessee. In any case, they have already produced the original triplicate copies of the invoices vide their letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the returned goods. As mentioned, the rule pre-supposes the qualification of these returned goods as inputs' under the Cenvat Credit Rules, 2002/2004 and allows an assessee to take Cenvat Credit of the duty initially paid. 14.1 Merely because the assessee initially filed an application seeking permission under rule 16(3) and then withdrew the same cannot mean to say that they ought to have taken permission from the Commissioner before embarking on taking Cenvat Credit and conducting the repairs of the returned goods. When the fact of the matter is that there was no need in the first place to make such an application in the present case, as discussed by me in the preceding paragraphs, one cannot allege contravention of rule 16(1)/16(3) of the CER, 2002 or for that matter rule 3 and rule 9(1) of the Cenvat Credit Rules, 2004. 14.2 Be that as it may, I would like to reiterate that there is no allegation in the SCNs under reference that the Cenvat Credits that were taken on the basis of documents do not co-relate to the goods that were received back for repairs etc. or that the Cenvat Credit taken is more than that shown on the invoices or that the quantum of reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.4 Appellants have initially filed the application in respect of the first three transformers as detailed in table below seeking permission under Rule 16 (3), subsequently withdrew the same and followed the procedure as per Rule 16 (1).In respect of remaining three cases appellant had directly followed the procedure as per 16 (1). The relevant details regarding the procedure followed are reflected in table below: SCN Date Permission/ intimation date Receipt date of goods Date of taking credit Invoice No. against which credit taken Date of removal of goods 18.01.2011 18.12.2009 21.12.2009 02.02.2010 233/21.06.2007 02.02.2010 19.01.2010 07.01.2010 13.01.2010 17.02.2010 614/09.10.2009 30.04.2010 20.01.2011 07.01.2010 18.02.2010 18.02.2010 131/08.05.2008 19.06.2010 14.02.2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the following decisions: i. Hitesh Plastic Pvt. Ltd. [2009 (243) ELT 419] 3. I find that there is no dispute, that provisions of Rule 16 allow the assessee to avail the credit of duty paid on the goods cleared by them, as if such goods are received as inputs under the Cenvat Credit Rules, 2002. This is in the nature of deemed provisions where the final products returned by the buyer is deemed to be input by the assessee. The provisions of Rule 7, which specify the documents for the purposes of availment of credit in respect of inputs, would not apply to the provisions of Rule 16. This is the special provisions enacted for receiving back the final product originally cleared and by giving them a deemed status of inputs, in which case, the invoices originally issued by the manufacturer are also required to be considered as fit for availment of credit. The law stands declared by the Tribunal in the case of BAPL Industries Ltd. [2006 (198) E.L.T. 587 (Tri.- Chennai)]. The Board Circular issued vide F.No. 354/66/2001- TRU; dated 21-6-2001 also clarifies that Rule 16 provides availment of cenvat credit by the manufacturer equivalent to the duty paid by him. 4. Admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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