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TMI Blog2023 (10) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... ession of facts or contravention of any provision of the Excise Act or of the Customs Act or the Rules made thereunder with intend to evade payment of duty only when such clearance is in the nature of sale of goods - In the present case the appellant is a job worker and they have received the goods on which CENVAT Credit was taken as a job worker, for the purpose of job work on behalf of M/s Hindustan Unilever Ltd. In this fact, the goods were received on returnable basis which does not involve the sale of goods as defined under Section 2(h) of Central Excise Act. The ownership of goods remained with supplier M/s. Hindustan Unilever Ltd. As against the supply of goods there is no consideration paid by the appellant to M/s. Hindustan Unilever Ltd. Therefore, the transaction is clearly not covered under sale of goods by M/s. Hindustan Unilever Ltd to the appellant. Therefore the combined reading of Rule 9 (1)(b) and Section 2(h), it is clear that only in a case of sale of goods, the restriction of CENVAT Credit on supplementary invoice is applicable. In the present case, the transaction being not a sale transaction the restriction shall not apply. From the consistent view tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment of such additional duty by Hindustan Unilever Ltd allegedly on account of suppression, etc. under Rule 9(1)(b) of CENVAT Credit Rules, 2004. (b) whether the penalties under Section 11 AC(1)(c) of Central Excise Act upon the appellant and under Rule 26 (2) upon HUL are imposable. 2. Ms. Manshi Patil, Learned Counsel along with Shri Viraj Reshamwala, Advocate appearing on behalf of the appellant submits that restriction on availment of CENVAT Credit in respect of supplementary invoices as provided under Rule 9(1)(b) of Cenvat Credit Rules, 2004 is applicable only in a case where the clearance of goods by the supplier is made by way of sale of goods and not otherwise. In the present case since the appellant being a job worker received the goods not as a purchase, but on returnable basis for job work and no sale is involved. Accordingly, the provision of Rule 9(1)(b) of CENVAT Credit Rules is not applicable. She placed reliance on the following judgments: Karnataka Soaps Detergents- 2005 (192) ELT 892 (T) -do- Upheld by Karnataka HC-2010 (258) ELT 62 (Kar.) KArnantaka Shops Detergents- 2009 (237) ELT 485 (T) -do- Upheld by Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .C) ZYG Pharma Pvt Ltd-2017 (358) ELT 101 (M.P) Tinplate Cpmpany of India Ltd-2013 (289) ELT 414 (Jhar.) 2.4 She submits that for invocation of extended period there should be some positive act on the part of the assesse, in absence of which extended period is not invokable. In support of which reliance was placed on the following judgments : Karnataka Soaps Detergents- 2005 (192) ELT 892 (T) -do- Upheld by Karnataka HC-2010 (258) ELT 62 (Kar.) KArnantaka Shops Detergents- 2009 (237) ELT 485 (T) -do- Upheld by Supreme Court- 2010 (254) ELT A-40 (SC) Jai Raj Ispat Ltd.- 2007 (217) ELT 272 (T) Upheld by AP High Court-2009 (245) ELT 118 (AP) Bosch Chassis Sstems India- 2017 (358) ELT 225 (T) Jindal Steel Power Ltd.- 2017 (355) ELT 568 (T) United Phosphorous Ltd.-2014 (313) ELT 418 (T) Sri Warana Shahakari Dudh Utpadak Prakriya Sangh Ltd.-2017 SCC Online CESTAT 1026 2.5 As regard the appeal of Hindustan Unilever Ltd, she submits that since the demand of CENVAT Credit itself is not sustainable, no consequential penalty can be imposed. She further submits that Hindustan U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms Act or the Rules made thereunder with intend to evade payment of duty only when such clearance is in the nature of sale of goods. In the present case the appellant is a job worker and they have received the goods on which CENVAT Credit was taken as a job worker, for the purpose of job work on behalf of M/s Hindustan Unilever Ltd. In this fact, the goods were received on returnable basis which does not involve the sale of goods as defined under Section 2(h) of Central Excise Act as under: Sale and purchase , with their grammatical variations and cognate expressions, mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. From the above definition of sale in sale and purchase there are following criteria to cover the transaction as sale or purchase (i) transfer of the possession of goods by one person to another in the ordinary course of trade or business (ii) such transfer must be against consideration in cash or deferred payment or other valuable consideration. In the facts of the present case, since the goods were received by the appellant on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pat Ltd-2009 (245) ELT 118 (AP). The similar issue was taken up by this Tribunal in the case of Jindal Steel and power Ltd, wherein the following order was passed: 11. Regarding the appeal by the Raigarh Unit, we find that the issue of availing credit on supplementary invoices is no more relevant as the differential duty demand against the Raipur Unit is set aside. However, we note that the Id. Counsel for the appellant stated that the duty originally paid by Raipur Unit was passed on by supplementary invoices to Raigarh Unit and the credit was accordingly availed. In this background, the appellant/assessee is not proceeding further with any relief by way of claiming refund on this favourable order as the supplementary invoices and the credit thereupon have already been availed and settled. The denial of credit to Raigarh unit is on the ground that the differential duty has been paid by Raipur Unit against detection of evasion of duty involving suppression of facts, etc. with intent to evade the payment of duty and hence the credit on such duty is barred in terms of Rule 9(1)(b) of CCR, 2004. We note that original authority (Raipur Unit), though confirmed differential duty f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents, namely:- (a) . (b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises, from where the goods are sold by, or on behalf of the said manufacturer or importer, in case additional amount of excise duties or additional duty of customs leviable under Section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Act or of the Customs Act, 1962 or the rules made thereunder with intent to evade payment of duty. (emphasis supplied) A very careful reading of the above rules shows that the bar for availment of credit on supplementary invoices would operate only when the additional amount of duty becomes recoverable from the manufacturer on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts Ltd. v. CCE, Mysore [2010 (258) E.LT. 62 (Kar..)]. The provisions of Rule 7(1)(b) of the earlier Cenvat Credit Rules are identical to the provisions contained in Rule 9(1)(b) of the Cenvat Credit Rules, 2004. In view of the above settled position of law differential duty paid under supplementary invoices even for extended period will be admissible to the recipient factories of the appellant because there is no sale of goods between the sister concerns of the appellant. 5.3 In the light of above observations issue framed at para 5(i) has to be decided in favour of the appellant as per the judgment of this very Bench in case of Mafatial Industries Ltd. v. CCE, Daman [2009 (241) E.LT. 153 (Tri.-Ahmd.)] where following law has been laid down in para 4, reproduced below: 4. After careful consideration the submissions made by both sides, we find that if the appellants would have paid higher duty by adopting higher assessable value at the time of clearance of the fabrics, their unit situated at Nadiar would have taken credit of the same. It is not the case where the goods are being sold by one assessee to another. It is basically taking out money from one pocket and put ..... X X X X Extracts X X X X X X X X Extracts X X X X
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