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TMI Blog2024 (9) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of clearance of the capital goods, not the finished goods produced in the factory of the manufacturer. The only issue in respect of the return of the said goods on which Cenvat credit has been taken within 180 days after job-work. There are no infirmity in the impugned order - appeal dismissed. - MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) AND MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri Rajesh Chhibber, Advocate for the Appellant Shri Manish Raj, Authorised Representative for the Respondent ORDER This appeal is directed against Order-in-Appeal No.39-GBN-EXST-APP-17-18 dated 27/04/2018 passed by Commissioner (Appeals) Central Tax GST, Greater Noida. By the impugned order Commissioner (Appeals), uphold the Order-in-Original dated 12.05.2017, wherein following has been held:- ORDER (I) I confirm the demand of Central Excise duty amounting to Rs.27,88,702/- (Cenvat-Rs.27,07,477/- + Ed. Cess Rs.54150/- + H.E.D Cess Rs.27075/-) (Twenty Seven Lakhs Eighty Eight Thousand Seven Hundred Two) under section 11A of the Central Excise Act, 1944. (ii) I also confirm the demand of interest from them on the above amount under Section 11AA of the Central Excise Act, 1944, and (iii) I impose a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 25 of the Central Excise Rules, 2002. Earlier this Show cause notice was answerable to the Additional Commissioner, Central Excise, Ghaziabad but in view of Circular No. 1049/37/2016-CX of Central Board of Excise Customs a corrigendum was issued vide C.No. V(15)Adj/C.Ex/Precision/20/15-16/5153-5155 dated 07.10.2016 It was made answerable to the Assistant Commissioner, Central Excise, Division-III, Ghaziabad. 2.6 This show cause notice was adjudicated as per the Order-in-Original referred in para-1 above. Aggrieved appellant have filed appeal before Commissioner (Appeals), who vide the impugned order dismissed the appeal. Aggrieved appellant has filed this appeal. 3.1 We have heard Shri Rajesh Chhibber learned Counsel appearing for the appellant and Shri Manish Raj learned Authorised Representative appearing for the revenue. 3.2 Arguing for the appellant learned Counsel submits that- The moulds were capital goods and therefore in terms of Cenvat Credit Rules, the same can be sent for job-work. Reliance is placed on the decision of this Tribunal in the case of M/s Zenith Machine Tools Pvt. Ltd. 2010 (255) ELT 83 (Tri.-Bang.). In any case the demand is revenue neutral, Appellate Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery possible difficulty faced by an assessee. These rules are quite plain and simple to understand and merely require recording and disclosure of transactions in accounts and returns. I do not find any practical difficulty in compliance of such rules. The Appellants failed to point out the difficulty faced by them in compliance of these rules. It merely shows that they care least for the statutory provisions on the subject. Contrary to the need to recognize the significance of such provisions, the Appellants have preferred to ignore them claiming to be mere procedural formality. The importance of procedure cannot be undermined in taxing statutes. Procedures are prescribed to prevent any possibility of fraud and misuse of a facility. In this regard I place reliance on following case laws (i) In the case of CCE Vs. Harichand Shri Gopal 2010 (260) ELT 3, 5 Member Bench of the Hon'ble Supreme Court held that object and purpose of the procedure should not be overlooked. Procedures are put in place to see that the goods be not diverted or utilized for some other purpose, on the guise of the exemption notification. Hon'ble Supreme court also rejected the plea of substantial law an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compliance should be accepted. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the substance or essence of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the essence of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential. (ii) In the case of Indian Aluminium Company Ltd. Vs. Thane Municipal Corporation 1991 (55) ELT 454 (S.C.) Hon'ble Supreme Court of India observed:- Para-3.......... .....Therefore the petitioner Company has definitely failed to fulfil an important obligation under the law though procedural. The learned Counsel, however, submitted that even now the authorities can verify the necessary records which are audited and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Central Excise before the Cigarettes are removed from the factory. Rule 12 filing of Return (1) Every assessee shall submit to the Superintendent of Central Excise a monthly return, in the form specified by notification by the Board of production and removal of goods and other relevant particulars within ten days after the close of the month to which the return relates, 5.6 I find that all these provisions relating to the manner of accounting of production, storage and removal of excisable goods, are kingpin of statutory mechanism to administer the levy and collection of Central Excise Duties i.e. a tax on production of goods. Unless any manufacturing activity is not duly recorded in the accounts books or disclosed in the Returns in accordance with the statutory scheme the department would be deprived of an opportunity to examine the feasibility of levy and collection of Central Excise Duty. Thus non adherence to above provisions cannot be regarded as merely non compliance of unimportant procedure alone. 5.7 I further find that moulds, in question, have been manufactured in the factory. They are not such moulds which were purchased from outside and on which credit of duty wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the proviso qualifies the substantive clause. In effect the proviso says that part of the turnover of the selling dealer covered by the terms of sub-clause (ii) will be exempted provided a declaration in the form prescribed is furnished. To put it in other words, a dealer cannot get the exemption unless he furnishes the declaration in the prescribed form. It was further held as under: There is an understandable reason for the stringency of the provisions. The object of Section 5(2) (a) (ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax. In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will well-nigh be Impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section. Therefore, presumably to achieve the two-fold object, namely, prevention of fraud and facilitating administrative efficiency, the exemption giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on I do not agree with the contention advanced by the appellant and hold that they have violated the essential provisions of Central Excise in pith and substance. 4.3 We find force in the observations made in the impugned order with regards to availability of exemption under Notification No.67/95-CE. It is not in dispute that appellants are manufacturing the moulds, these moulds are the finished goods of the appellant which have to be cleared from the place of production only on payment of duty as applicable. As per exemption Notification No.67/95-CE, only those goods which are produced in the factory and used in the manufacture of finished goods which are cleared on payment of duty are exempt from duty. The goods which are finished goods by one person can be capital goods for another person. However, the same do not change the nature of the goods being finished goods that being so appellants claim to the benefit of exemption under Notification No.67/95-CE cannot be upheld. Even otherwise, it is now settled by Constitutional Bench of Hon ble Supreme Court in the case of M/s Dilip Kumar Company [2018-TIOL-302-SC-CUS-CB] that in case of ambiguity the benefit of such ambiguity should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plea that the goods are to be utilized for manufacture of dutiable goods on which he is eligible to avail CENVAT credit. Certainly such interpretation cannot be accepted since it would leave the provision for levy of CVD redundant, as held by Hon'ble Supreme Court in the case of Balwant Singh Vs. Jagdish Singh wherein Hon'ble Supreme Court Observed that It is also a well settled canon of interpretative jurisprudence that the court should not give such provisions which would render the provision ineffective or odious . Same views were echoed by Hon'ble Supreme Court in the case of Star Industries v. Commissioner 2015 (324) E.L.T. 656 (S.C.) -Para 35 of the Judgement reads as follows:- 35. It was submitted by the learned counsel for the assessee that the entire exercise is Revenue neutral because of the reason that the assessee would, in any case, get Cenvat credit of the duty paid. If that is so, this argument in the instant case rather goes against the assessee. Since the assessee is in appeal and if the exercise is Revenue neutral, then there was no need even to file the appeal. Be that as it may, if that is so, it is always open to the assessee to claim such a credit. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice Tax is not to be paid on time. When law requires that tax to be paid same has to be paid as per time schedule specified by the statute. It cannot be said that exchequer had not lost interest between two dates irrespective of the fact that assessee would have availed the Cenvat Credit on the very date the tax was paid and therefore Interest u/s 75 of the Finance Act-1994 is payable, as held by Hon'ble Tribunal in the case of Forbes Marshall Pvt. Limited 2015(38)STR843 (Tri-Mumbai). Similar, views have been expressed by Chandigarh Bench of Hon'ble Tribunal in the case of Surya Pharmaceuticals Limited-2016(43) STR 479 (Tri-Chan). 4.6 In case of Kakateeya Fabs (P) Ltd [2018 (15) G.S.T.L. 350 (Tri. - Del.)] Delhi Bench held as follows: 10 . ... Further, we also note there is a claim for exemption in terms of Notification No. 67/95 for capital goods manufactured in a factory and used within the factory of production as well as of excisable goods manufactured in a factory and used within the factory of production in or in relation to manufacture of final products. The said exemption has no application as the main appellant is not using the capital goods in the factory of man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The said notification exempts, inter alia, inputs manufactured in a factory and used within the factory of production in or in relation to manufacture of final products. The said exemption in not available if the final product is exempted from whole of Excise duty leviable thereon. The appellant claims that there is no clearance of oxygen outside their factory premises. However, it is an admitted fact that the recipient of oxygen is a corporate entity engaged in industrial activity having their own factory premises, though within the factory complex of appellants. The business arrangement and need is such that the impugned goods (oxygen) is cleared through pipeline to FSNL premises for further use. FSNL are using the said oxygen in the scrap recovery operation and are not registered with Central Excise department for any payment of duty on any final products. We find that the original authority fell in error in examining the issue like ownership of goods, free of cost supply and return of recovered scrap, etc., to arrive at the finding that there is no physical clearance or sale of goods and hence no duty liability. Clearance to FSNL through pipeline is an admitted fact. FSNL is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the goods without payment of duty was simultaneously available to the assessee, the non-paymert/short payment was not attributable to any intention to evade payment of duty. In the other seven cases viz., cases against Sl. No. 1,3,5,9,10,11 and 12 in the list of cases mentioned in Para 9 above, the option of availing Modvat credit was available to the assessee even though he was not availing of it. In the present case, the claim of the appellants that duty free clearance under Notfn. No. 214/86 was concurrently available to them and therefore no intention to evade duty payment can be inferred does not appear to merit acceptance since it is not in dispute that the appellants were admittedly availing of modvat credit under Rule 57A and Rule 57Q. There is also no evidence on record to show that MUL had given any undertaking under Para 2 of Notfn. No. 214/86 in relation to the manufactured items sold by the appellants to MUL. The said defence cannot therefore be accepted for want of factual substantiation. As regards the contention of the appellants that the SCN issued under Section 11A(1) would apply only to a situation where a duty payment is subsisting at the time of issue of not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision under Section 11AC. 13 . In the light of the above discussion, we answer the reference as under: (a) Revenue neutrality being a question of fact, the same is to be established in the facts of each case and not merely by showing the availability of an alternate scheme; (b) Where the scheme opted for by the assessee is found to have been misused (in contradistinction to mere deviation or failure to observe all the conditions) the existence of an alternate scheme would not be an acceptable defence; (c) With particular reference to Modvat scheme (which has occasioned this reference) it has to be shown that the Revenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee s manufactured goods; (d) We express our opinion in favour of the view taken in the case of M/s. International Auto Products (P) Ltd. (supra) and endorse the proposition that once an assessee has chosen to pay duty, he has to take all the consequences of payment of duty. 4.10 In view of the above discussions we do not find any infirmity in the impugned order. 5.1 The appeal is dismissed. (Pronounced in open c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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