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TMI Blog2023 (2) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... ly cleared by them on payment of duty were the imported goods supplied to them by the Central Warehouse. No other source of the goods have been identified in the show cause notice or in the order in original. On the basis of Bill of entries, available with the Central Warehouse of the company the duty paid character of the impugned inputs received by the appellant is established beyond doubt and the credit could not have been denied for the reason of not availability of the relevant duty paying invoices - entire duty due and discharged by the Central warehouse in respect of the goods cleared to various service centers have been discharged and reflected in ER-1 of December 2006, however he concludes that ER-1 cannot be considered as authentic evidence for the payment of duty, in respect of the goods received by the appellant. Such a finding cannot be sustained. ER-1 is statutory record and it is not even the case that duty was not paid for which notice has been issued under Section 11 A of the Central excise Act, 1944 or Rule 8 (3) of the Central Excise Rules, 2002. There seems to be no merit in the order. The remand order of the CESTAT has been misinterpreted by the Commissioner ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervicing needs of the customers located in and around such places. As and when there is a requirement from any of the service centres for any particular part number, the Central Warehouse picked and repacked into smaller bulk pack packages and cleared the same under the cover of a stock transfer invoice to the service centre. From the service centre like present appellant, parts in retail packs are sold to the end customers. 2.3 By Notification No. 12/2006 dated 29.5.2006 (effective from 1.6.2006), parts of automobiles were included for assessment to duty under Section 4A of the Central Excise Act. Necessary changes were also brought in into Schedule-III of the Central Excise Act, 1944 to include parts of automobiles in the said Schedule. As a result of the amendment carried out to III Schedule of the Central Excise Act, 1944, the activity of packing/repacking or re-labeling or affixation of MRP on the parts of automobiles became an activity amounting to manufacture under Section 2(f) (iii) of the Central Excise Act, 1944. 2.4 Central Warehouse of the Company was registered with C. Ex. Dept- 18.9.2006. For June 2006 July 2006 clearance from Central Warehouse- duty was paid in was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice also did not raise any objection regarding the nature of documentation, co- relation of the documentation and entitlement to credit. Undisputedly all the parts and components were imported into the Central Warehouse only on payment of appropriate Customs Duty whether prior to or after 1.06.2006. The Appellant received imported goods from the Central Warehouse only. Therefore, all goods lying in stock as on 1.6.2006 with the appellants were imported on payment of appropriate Customs Duty including CVD and the appellants correctly availed credit in respect of the goods lying in stock with them as on 01.06.2006. Impugned order, alleges absence of co-relation between inputs lying in stock and the duty paying documents, the order has completely disregarded the following documents submitted by the appellants: o Appellants vide letter dated 9.10.2019 submitted the relevant documents viz. correlation between the payment of CVD against Import of parts and the table containing information of Bill of Entry for import of parts, linked to the individual parts out of the list of opening inventory in the Nagpur Service Center as on 1.6.2006 o Appellants submitted a statement gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment demonstrating branch wise bifurcation of duty paid. o List of invoices issued from Central Warehouse to various service centre during the month of June, 2006 and July, 2006 o ER-1 return filed in the month of December, 2006 evidencing that the payment of details of Excise duty against the clearances made from Central Warehouse, Bangalore to branches including Nagpur. The appellants have availed the Cenvat Credit on the basis of the Stock Transfer Notes issued by the Central warehouse in respect of the goods transferred to each Service Centres (Refer Annexure 25 of appeal). once the Central Warehouse has paid certain duty for clearances made to service centres, it would not be open to the department to disallow credit to the service centre. Commissioner Hyderabad vide Order-in-Original No. HYDEXCUS-001-COM- 014-19-20 dated 5.3.2020 in case for Hyderabad Service Centre has allowed cenvat credit on the strength of similar submissions and documents in respect of the Service Centre in Hyderabad. Entire demand is barred by limitation and the facts and circumstances of the instant case does not warrant invocation of extended period of limitation. The Show Cause Notice has been issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 20.03.2019 has remanded back the case to original adjudicating authority. The Hon ble Tribunal in para 7 held that, 7. In view of the above, we allow the appeals by way of remand to the jurisdictional authorities to allow credit after verifying the records, available with the appellant or the Department pertaining to receipt (import), storage and distribution of parts to various service centers within three months of the receipt of this order. 17.2 Thus the case needs to be adjudicated within the precincts given in the above verdict. The eligibility/ admissibility of Cenvat credit has to be decided only on the basis of the records available with the noticee or the department. These records shall be pertaining to receipt (imports), storage and distribution of parts to various service centers. The requirement of submission of documents was restricted to records only as per Misc order supra. 18. On perusal of the OIO supra, I find that the credit has been disallowed to the tune of Rs. 47,98,991/-. In fact this amount is the subject matter of this case. The said amount comprises of three parts viz. i. Rs. 15,19,163/- the credit availed on input lying in stock as on 01.06.2006. ii. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entre warehouse submitted any record justifying the quantity of stock of input available with the noticee. On this ground also in the absence of proper records the credit cannot be construed as admissible. 19.3 The noticee came up with the submission for said availment that here was no duty payable by the centre warehouse on the clearance of their products to branches. The duty has been introduced with effect from 01.06.2006 as packing/ repacking amounts to manufacture. Hence the passing of duty incidence prior to 01.06.2006 does not arise. However the stock cleared to branches prior to 01.06.2006 were nothing but an imported inputs and as such the CVD has been paid by the Central warehouse at the time of imports. But the same has not been passed on to branches i.e the noticee as these clearances from centre warehouse to noticee was not subject to duty. Thus it is established that the duty incidence incurred by the centre warehouse has not been passed on to the noticee. Thus it is established that the duty incidence part has not been received in the pocket of the noticee and remained with their centre warehouse. Since this amount is not at all received by them, the credit cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices issued for various branches including Nagpur in the month of June, 2006 and July, 2006- Annexure-I Copy of ER-1 for the month of December, 2006 Annexure- II. 21.2 Regarding submission of list of invoices I find that it is a fresh list submitted by the noticee incorporating the invoices issued during the month of June, 2006 July, 2006. However this list has not been supported with the relevant records maintained during the disputed period. Thus the authenticity of this list cannot be justified. Moreover, the Hon'ble Tribunal directed to rely on records related to receipt, storage and distribution. During the relevant period such type of records would definitely have been maintained. However the same has not been submitted. In the absence proper records the claim of the noticee is not sustainable. 21.3 The noticee's other record is ER-1 for the month of December, 2006. On perusal, it reveals that the said ER-1 is filed by their Centre warehouse. In this ER-1 the duty payment in respect of the clearances made to branches including Nagpur has been shown as discharged. In this regard, this is a consolidated payment made by the centre warehouse. It is obvious that in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was required by law to pay on the tax admittedly payable but which was paid beyond the time limit. Further in the case of PRATIBHA PROCESSORS Versus UNION OF INDIA reported as 1996 (88) E.L.T. 12 (S.C.) in the para 13 the Hon'ble Apex Court held that, ...Interest is compensatory in character and is imposed on an assessee who has withheld payment of any tax as and when it is due and payable. The levy of interest is geared to actual amount of tax withheld and the extent of the delay in paying the tax on the due date. (emphasis supplied). 4.3 While remanding the matter to the original authority tribunal has observed as follows: 5. A careful perusal of the impugned order reveals that the learned commissioner has taken a different stand for different periods. While in respect of credit for the periods mentioned at (i) and (ii) above the Learned Commissioner took the stand that no duty could be discharged before 01.06.2006 before 01.06.2006; Stock Transfer Invoice is not a valid document in terms of Rule 9 of the CENVAT Credit Rules and that proper correlation between credit taken and duty payment document was not available. However, the same authority has come to the conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, within 3 months of submission of records and evidence to that effect by the appellants. Under such circumstances, we find that the penalties levied therein are not maintainable; therefore, they are liable to set aside. 6. Coming to the third issue of whether the appellant s case is fit to be considered under the provisions of Section 11(2B), we find that Central Excise Audit team has visited the premises of the appellant and have conducted audit from Jan-May 2007. At the end of the Audit they have issued an audit note dated 2/2007. One of the issues raised therein was pertaining to non- payment of duty on goods cleared from service centres consequent to the issue of Notification No 12/2006 dated 29.05.2006-CE(NT). The conclusion drawn on the objection was that since the appellants have paid the duty along with interest before issue of SCN No further action is proposed as envisaged under Section 11(2B) of Central Excise Act, 1944. The department has given the proposition being fully aware about the credit availed by the appellants and the payment of duty by them. The audit note in fact has raised some issues relating to irregular availment of CENVAT Credit. The only condition un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having jurisdiction over the factory of a manufacturer or provider of output service intending to take CENVAT credit, or the input service distributor distributing CENVAT credit on input service, is satisfied that the duty of excise or service tax due on the input or input service has been paid and such input or input service has actually been used or is to be used in the manufacture of final products or in providing output service, then, such Deputy Commissioner of Central Excise or the Assistant Commissioner of Central Excise, as the case may be, shall record the reasons for not denying the credit in each case. 4.5 From the perusal of the above rules it is quite evident that the CENVAT credit of the duty paid on the inputs lying in stock, on the date when the goods became dutiable has to be allowed as per Rule 3(2) and the proviso to Rule 9 (2) states that Assistant/ Deputy Commissioner shall allow the CENVAT credit in respect of the inputs etc on recording the satisfaction that the duty has actually been paid on the inputs or input services received by him and utilized by him for manufacture of the goods cleared on the payment of duty. 4.6 Undisputedly in the present case the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Registration on 04.05.2007. 24. I find that Commissioner, LTU Bengaluru had disallowed the CENVAT Credit of Rs 1,03,99,712/- for failure to submit duty paying documents in respect of the goods lying in stock as on 01.06.2006, in respect of goods cleared during the months of June, 2006 July 2006 and for non linking of Stock Transfer Notes with goods sent to service centre. The Hon ble CESTAT while remanding the issue, in its revised order dated 29.03.2019 directed the jurisdictional authorities to undertake verification of documents available with the appellants and also with the department before allowing the credit to the appellants. 25. I find that the Assistant Commissioner, Mancherial Division, the Superintendent, Ramagundam Range, had undertaken such verification of the relevant documents submitted by M/s Volvo. It is observed from such verification that and amount of Rs 2,40,892/- has been found to be irregular credit availed by M/s Volvo (i) on the strength of stock transfer notes which did not match (link) with the Goods Receipt Notes for Rs 1,61,386/- and (ii) non production of documents to the tune of Rs 79,506/- 26. In view of the above, I hold that M/s Volvo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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