9911796707
TMI Blog2024 (10) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... regime. The appellant appeared to have wrongly availed Cenvat Credit amounting to Rs. 5,25,67,213/- on the goods which are not inputs and the same have been cleared as such during the Financial Year 2015-16, 2016-17 and 2017-18 (upto June, 2017) in contravention of Rule 3 of the Cenvat Credit Rules, 2004. During the course of audit of the records of the appellant, the Dept. observed that the appellant had availed Cenvat Credit of Central Excise Duty paid on inputs and capital goods and credit on goods namely Aluminium Rod (Chapter 76), Aluminium Wire (Chapter 76) and PVC Compound (Chapter 39) during the Financial Year 2015-16, 2016-17 and 2017-18 (upto June, 2017), which were not their inputs as the said goods have no relationship whatsoever with the manufacture of the appellant's final products viz. General Fabrication and Transformer Tank and further the same had been cleared as such. Accordingly, a show cause notice dated 27.02.2019 was issued to the appellant calling upon to show cause and explain as to why:- (1) An amount of Rs. 5,25,67, 213/- (including cess) should not be demanded and recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t credit was within the knowledge of the department. The Appellant had submitted all required documents as per law and were also filing their monthly returns regularly. Consequently, there is no suppression of fact or any intention to evade duty on part of the appellant. Moreover, the only reason for invoking the extended period of limitation is given in the show cause notice is that the appellant had suppressed the facts from the department. In this context, the learned counsel submitted that when all facts required to be declared as per the law had been declared and no specific reason has been given as to which facts had been suppressed, then the allegation of suppression of facts cannot be made. In this regard, the learned counsel relied upon the following case laws:- SOTC Travels Services Private Limited (Formerly known as Kuoni Travel India Private Limited) vs. Principal Commissioner of Central Excise Delhi reported as 2021-TIOL-607-CESTAT-DEL. Geep Industrial Syndicate Limited vs. Commissioner of Central Excise, Allahabad reported as 1994 (74) ELT 888 (Tri.-All) Gajendra Enterprises vs. CCE, Daman 2008 (232) ELT 445 (Tri.-Ahmd.) Vanaz Engineers Limited-2009 (246) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently, he contended that the appellant by their act of omission and commission rendered them liable to penalty under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11 AC(1)(c) of the Central Excise Act, 1944. The learned AR also submitted that Rule 14 of Cenvat Credit Rues 2004 clearly provides that where the CENVAT credit has been taken and utilized wrongly or has been erroneously refunded, the same along interest is to be recovered from manufacturer and the provisions of Sections 11A and-11AA of the Excise Act or Sections 73 and 75 of the Finance Act, stall apply mutatis mutandis for affecting such recoveries. 5. We have heard both the parties and perused the case records. 6. In order to appreciate the arguments of the Ld Counsel for the appellant and the Ld AR, it is important to understand the scheme of the Cenvat Credit. CENVAT stands for Central Value Added Tax. CENVAT Credit Rules, 2004 was introduced to allow both manufacturers and service providers to take input credit on goods and services, apart from capital goods. Prior to the introduction of CENVAT, credit was provided under the MODVAT regimen for manufacturers and with the introduction of Service T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause, "free warranty" means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer;]" 6.1 As per the legal provisions quoted above, a manufacturer is permitted to avail credit of the duty paid on inputs, which are used in the manufacture of final product. In the instant case, it is noted that the appellant had availed credit on Aluminium Rod (Chapter 76), Aluminium Wire (Chapter 76) and PVC Compound (Chapter 39) during the Financial Year 2015-16, 2016-17 and 2017-18 (upto June, 2017). As the said goods were not inputs, the appellant was not eligible to avail the credit of the duty paid on such inputs. We find that the order in original has noted that these were not their inputs as the said goods have no relationship whatsoever with the manufacture of the appellant's final products viz. General Fabrication and Transformer Tank. We find that the impugned order has noted that Aluminium Wire, Aluminium Rods and PVC Compound was not declared as raw materials in Form B of the Central Excise Registration of the appellant. In view of the above, we hold that the appellant had incorrectly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y debiting Cenvat Credit on clearances made as such of the impugned goods i.e., Aluminium Rod, Aluminium Wire and PVC Compound and shown such details in the ER-1 Returns filed by them, however they did not supply the ER-1/ER-6 during the pre-consultation stage or in defence reply or at the time of personal hearing or till date. The Notice has also supplied chart showing bill-wise details of purchase and clearances as such of the impugned goods and a chart showing calculation of interest amount on the Cenvat credit utilized for verification, but it has been observed that the said documents do not bear the signature of the Noticee or their representative. Further, a detailed reconciliation is required regarding availment of Cenvat credit on the impugned goods and their as such clearances and utilization of Cenvat Credit along with documents showing as such clearance i.e., Cenvat Credit Register related to the inputs received in terms of Cenvat Credit Rules, 2004, sale invoices, copies of ledgers of the purchaser and buyers etc. Though the representative agreed to produce all such returns by 13.07.2019, yet, till this date no such document were produced." 7.3 In view of the above, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
