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TMI Blog2024 (6) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... r the period August 07 to March 2008 has indeed been calculated as a proportion of the total production figures - this methodology adopted by the adjudicating authority to calculate the clearances during this period when the actual data of clearances was available with the Commissioner cannot be appreciated - CA Certificate also examined wherein the monthly production clearances figures for the period 01.08.2007 to 30.06.2008 has been certified by the Chartered Accountant. The department had not led any evidence to hold that this CA Certificate was incorrect or fraudulent - the Commissioner has erred in determining the duty resulting of excess duty liability - the total duty determined is liable to be reduced by this amount. Whether the adjudicating authority was correct in denying Cenvat credit on photocopies of invoices? - HELD THAT:- Rule 9 of Cenvat Credit Rules, 2004 specifies the documents and records for the purpose of availment of credit. In some cases, it is noted that the appellant only had photocopies of the purchase invoices on which credit was denied. However, the receipt and utilization of inputs for the specified purpose has not been disputed nor has the department l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has also filed an appeal against the credit allowed on sugar cess. 2. The brief facts of the case are that the appellant was engaged in the manufacture of Boora, falling under chapter sub-heading 1701.99 and Batasha, Mishri Makhana, falling under Chapter Sub-Heading 1704.90 of Central Excise Tariff Act, 1985. The department noted that the activity of manufacturing of Batasha, Mishri Makhana amounted to 'manufacture' as defined under Section 2(f) of the Central Excise Act, 1944, and the appellant had cleared these goods, valued at Rs. 66,42,83,255/- during the period 01.08.2003 to 31.03.2008 under Rule 11 of Central Excise Rules, 2002 without payment of duty amounting to Rs. 2,35,91,7741-. It was also noted that the appellant was not registered under Central Excise. 2.1 A show cause notice dated 26.08.2008 was issued charging the appellant with manufacturing the excisable goods without having Central Excise registration and suppressing the production valued at Rs. 66,42,83,255/- during the year 2003-2004 to 2007-08 (upto August, 2007) and clearing the same without payment of appropriate duty amounting to Rs. 4.21,92,338/- (BED Rs. 3,51,20,425/- AED Rs. 34,01,915/+ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirmed accordingly. Aggrieved by the methodology of calculating the production figures, as also by the denial of Cenvat credit in respect of sugar purchased during the relevant period 01.08.2007 to 30.06.2008 and used in the manufacture of final products held liable to levy of Central Excise duty, and denial of Cenvat credit amounting in respect of opening stock of sugar as on 01.08.2007, the date from which the duty liability has been determined, the present appeal is before this Tribunal. 3. The Revenue has also filed an appeal against the impugned Order-in-Original dated 20.09.2022 on the following grounds:- (a) Whether the Adjudicating Authority has erred in appreciating that the issue of eligibility of Sugar Cess as CENVAT credit in terms of CENVAT Credit Rules 2004, has yet to attain finality in view of pendency of Civil Appeal No. 1531/2016 filed by the Revenue in the case of Commissioner v. Shree Renuka Sugars Ltd. 2016 (335) ELT A77 (SC). (b) Whether the Adjudicating Authority had erred in allowing CENVAT Credit of Sugar Cess amounting to Rs. 8,94,760/- to determine net duty liability of the Noticee in spite of the legal position defined under Rule 3 (1) of the CENVAT Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isplaced/lost. This claim had been further substantiated with the details of invoice-wise receipts of duty paid sugar duly certified by a Chartered Accountant. In support of his submissions, the learned counsel relied upon the following circular and decisions:- (i) CBIC Instruction F. No. 390/Misc./116/2017-JC dated 22.08.2019 (ii) Commissioner of Central Excise, Customs Service tax, Belgaum vs. Shree Renuka Sugars Ltd. 2014 (302) ELT 33 (Kar.) (iii) Tvs Motors Co. Ltd. Vs. Union of India 2015 (323) ELT 57 (Kar.) (iv) BanswaraSyntex Ltd. Vs. Union of India 2007 (216) ELT 16 (Kar.) (v) Bengal Beverages Private Limited vs. Commissioner of CGST, Central Excise, Howrah 2022 (381) ELT 84 (Tri.-Kolkata) (vi.) Union of India vs. Kamlakshi Finance Corporation Limited 1991 (55) ELT 433 (S.C.) Accordingly, the learned Counsel prayed for setting aside the impugned order and allowing the appeal. 5. Per contra, Learned Authorized Representative for the Revenue submitted that the adjudicating authority has allowed Cenvat credit of Rs. 45,43,667/- only in cases where original invoices had been submitted by the appellant. Rule 9 of Cenvat Credit Rules, 2004 specifies the documents and accounts for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Tax, Tirupati vide Final Order No. A/30684-30692/2019 dated 16.07.2019 (Tri.-Hyd.) (iv) M/s ACC Limited vs. Commissioner of CGST, Central Excise Jabalpur Vide Final Order No. 50793/2019 dated 24.06.2019 Learned Authorized Representative for the Revenue prayed for dismissing the appeal of the assessee and allowing the appeal of the Revenue. 6. On the other hand, the Learned Counsel for the Respondent (in Appeal No. 54723 of 2023) has submitted that the departmental appeal is liable to be dismissed being not maintainable on the ground of revenue limit as the present appeal filed by the Department involves revenue of Rs. 8,94,760/ which is well below the threshold monetary limit of Rs. 50.00 lacs for filing appeal by the revenue before the CESTAT, as prescribed vide CBIC Instruction F. No. 390/Misc/116/2017-JC dated 22.08.2019. He submitted that the departmental appeal to deny Cenvat credit of sugar cess in the present case solely on the ground that the issue has not attained finality in view of the pendency of Civil Appeal No. 1531/2016 filed by the Revenue before the Supreme Court challenging the judgement of Hon'ble Karnataka High Court in the matter of Commissioner v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinafter TABLE-A- Quantity (in quintals) of duty paid Input (sugar) received, and Cenvat credit admissible (In Rs.) As per submissions in adj proceedings for the period 29.08.2007 to 30.06.2008 As per the OIO-20.09.2022 for the period 01.08.2007 to 30.06.2008 BOORA MAKHANA MISHRI Total BOORA MAKHANA MISHRI Total 1 2 3 4 5 6 7 8 Aug/07 280 220 152 652 21916.67 19181.33 13594 54692 Sep/07 2910 2200 1665 6775 Oct/07 3075 2198 1590 6863 Nov/07 3010 2210 1700 6920 Dec/07 2320 2212 1550 6082 Jan/08 2050 2240 1490 5780 Feb/08 1825 2170 1550 5545 Mar/08 2525 2209 1776 6510 Sub- total-I 17995 15659 11473 45127 21916.67 19181.33 13594 54692 Apr/08 12115 6421 6718 25254 12115 6421 6718 25254 May/08 Jun/08 G.Total 30110 22080 18191 70381 34032 25602 20318 79946 As per the Actuals/CA Certificate for the period 01.08.2007 to 30.06.2008 Difference between figures as per the OIO and actual as per the appellant for the period 01.08.2007 to 30.06.2008 BOORA MAKHANA MISHRI Total BOORA MAKHANA MISHRI Total 9 10 11 12 13(5-9) 14(6-10) 15(7-11) 16(8-12) Aug/07 2722 2215 1620 6557 21916.67 19181.33 13594 54692 Sep/07 2910 2200 1665 6775 Oct/07 3075 2198 1590 6863 Nov/07 3010 2210 1700 6920 Dec/07 232 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the jurisdictional Assistant Commissioner for determination of the amount of Cenvat credit admissible to them in compliance of the directives given by the Commissioner, Central Excise vide the order-in-original dated 21.05.2012. However, it has also been submitted that the original copies of some of the purchase invoices had been misplaced and the appellant was not position to furnish the original copies. It has also been submitted by the ld. Counsel that the appellant had his statutory books examined by the Chartered Accountant who had certified the admissible Cenvat credit quantum as well. We find that the quantity of duty paid input (sugar) received and the Cenvat credit admissible for the relevant period is as per the table given hereinafter: TABLE-B Quantity (in quintals) of duty paid Input (SUGAR) received and Cenvat Credit admissible (In Rs.) As per submissions for the period 29.08.2007 to 30.06.2008 As per the OIO for the period 1.08.2007 to 30.06.2008 Qty (Qtl) BED+Cess Sugar Cess Total Credit Qty (Qtl) BED+Cess Sugar Cess Total Credit 1 2 3 4 5 6 7 8 Op. Stock 8389 613488 117446 730934 0 0 0 0 Aug/07 0 0 0 0 4900 356590 68600 425190 Sep/07 6760 494359 94640 588999 5280 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows:- 10.6 The assessee has also contested that the credit of duty paid on inputs lying as such or contained in semi-finished / finished goods as on the date from which duty is held payable on clearances of excisable goods also needs to be allowed. The contention of the assessee is not at all acceptable because of the fact that any manufacturer of dutiable excisable goods was required to obtain Central Excise Registration under Rule 9 of the Central Excise Rules, 2002 and they was under obligation to maintain stock book for excise manufacturing unit in R.G.1 Register, which contain details of manufacture, clearance and duty paid with value data wise, for opening stock, quantity manufactured, quantity cleared on payment of duty / without payment of duty, closing stock, amount of duty involved, invoice and data. At the end of the month, a summary has to be prepared to show the opening stock, production, clearance and closing stock and value of clearance with duty amount. Thereafter, monthly return in form E.R.1 or quarterly return in E.R.3 was required to be submitted. Since the noticee neither obtained Registration under Central Excise for manufacturing of Boora, Makhana Mishri f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he department has subsequently challenged this decision before the Hon ble Supreme Court vide Civil Appeal No. 1531 of 2016 and the said appeal is pending before the Apex Court for decision. In order to appreciate the arguments of the Department, it would be appropriate to reproduce the relevant paras of the aforesaid decisions:- 26 . Any cess levied and collected in order to constitute a fee after such collection should go into a special fund earmarked for carrying out the purpose of the Act. The said fund so set apart should be appropriated specifically for the performance of the specified purpose and it should not be merged in the public revenues. In other words, the cess levied by way of fee is not intended to be and does not become a part of the Consolidated Fund. It should be earmarked and set apart for the purpose of services for which it is levied. Then only it should be described as a fee and not tax. If the cess levied and collected is credited to the Consolidated Fund of India and it has to be appropriated by the Parliament by law and then only the said amount could be credited to the Fund; it ceases to be a fee and partakes the character of a duty or a tax. 27 . In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the credit of duty paid or deemed to have been paid on the goods used in or in relation to the manufacture of excisable goods which reads as under :- Power of Central 37. Government to make rules . (1) The Central Government may make rules to carry into effect the purposes of this Act; (2) In particular, and without prejudice to the generality of the foregoing power, such rules may (xvia) provide for the credit of duty paid or deemed to have been paid on the goods used in, or in relation to, the manufacture of excisable goods; 30 . The credit is given to the duty paid or deemed to have been paid under the Central Excise Act of 1944. Section 2A was inserted in the Central Excise Act, 1944 by Act No. 10 of 2000 with effect from 12-5-2000 which reads as under : 2A. References to certain expression -In this Act, save as otherwise expressly provided and unless the context otherwise requires, references to the expressions duty , duties , duty of excise and duties of excise shall be construed to include a reference to Central Value Added Tax (CENVAT) 31 . Therefore, it is clear from the aforesaid provision that, the expression, duty, duties, duty of excise, and duties of excise shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Hon ble Karnataka High Court in the Renuka Sugar case (supra) is directly dealing with the issue involved in the present proceedings and the same has also attained finality in view of the dismissal of the Department s Appeal by the Hon ble Supreme Court. The Hon ble Karnataka High Court after taking into consideration the provisions of Section 3(4) of the Sugar Cess Act, which incorporates by reference the provision of the Central Excise Act and the Rules framed thereunder as also the effect of the legislation by reference as explained by the Hon ble Supreme Court in Barnagore Jute Factory Co. v. Inspector of Central Excise [1992 (57) E.L.T. 3], answered the substantial question of law in favour of the assessee and against the Revenue. On the other hand, the decisions relied upon by the Learned Authorized Representative for the Respondent/Revenue are dealing with the issue of eligibility of exemption of education cess when the excise duty levy is exempted which is totally a different subject matter in our view. 10 . Also, in a similar matter, this Bench in the case of Diamond Beverages Private Limited vide Final Order No. 76356/2019, dated 7-8-2019 has allowed the Cenvat c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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