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TMI Blog2025 (1) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... dit in terms of Rule 9(1)(b). He submits that admittedly the duty was paid in respect of goods supplied by their own unit by way of stock transfer therefore no sale of goods is involved. Rule 9(1)(b) is applicable only in respect of the transaction of goods for sale therefore on the ground of Rule 9(1)(b) Cenvat Credit was wrongly denied. He placed reliance on the following judgments:- * Commr. of C. Ex & Cus., Vadodara-II Vs. Indeos ABS Ltd - 2010 (254) ELT 628 (Guj.) * Commissioner of C. Ex. & Cus., Surat-II - 2013 (290) ELT 538 (Guj.) Chiripal Polyfilms Ltd Vs. Commr. of C. Ex. & S.T., Vadodara-I - 2022(1) Centax 125 (Tri.-Ahmd) * Kansai Nerolac Paints Ltd Vs. Commr. of C. Ex. Ex., Ahmedabad-I - 2016 (339) ELT 467 (Tri.-Ahmd) * Commr. of C. Ex., Ahmedabad-II Vs. Reclamation Welding Ltd - 2014 (308) ELT 542 (Tri.-Ahmd) * Anglo French Textiles Vs. Commissioner of C. Ex., Puducherry - 2018 (360) ELT 1016 (Tri.-Chennai) * Accurate Chemicals Industries Vs. Commr. of C. Ex.,-Noida - 2014 (300) ELT 451 (Tri.-Del) * Commissioner of C.Ex., Noida Vs. Accurate Chemical Industries - 2014 (310) ELT 441 (All.) * Karnataka Soaps & Detergents Ltd Vs. CCE Mysore/Bangalor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r removal of doubts, it is clarified that supplementary invoice shall also include challan or any other similar document evidencing payment of additional amount of additional duty leviable under Section 3 of the Customs Tariff Act; or" From the plain reading of the above Rule 9(1)(b) it is clear that the restriction for Cenvat Credit provided in the Rule 9(1)(b) is applicable only in such cases where the transaction of input is of sale. In the present case admittedly the good were received by the appellant from their own unit therefore the transaction is not for sale but only stock transfer. It is also observed from the invoice copy that invoices for stock transfer and no VAT tax has been paid therefore in the present case transaction being of stock transfer and not of sale, Rule 9(1)(b) is not applicable and on that basis denial of Cenvat Credit is without authority of law. This issue has been considered time and again in various judgments as cited by the learned counsel. In the case of Karnataka Soaps and Detergents Limited the tribunal Bangalore in the identical issue passed following order. 7. RE CEA. 23/2005 : For the period 24-11-2003 to 10-12-2003 the assessee is said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Central Excise, Mysore dated 10-12-2004. CEA. 11/2006 is by the assessee assailing the order passed by the CESTAT in Appeal No. E/248/2005 (Final order 855/2005) dated 1-6-2005 and CEA 23/2005 is by the Revenue assailing the order of CESTAT passed in Appeal No. E/277/2005 (Final Order No. 856/2005 dated 1-6-2005). 10. It is seen from the order sheet of CEA 23/2005, dated 24-3-2006 that it was ordered to be posted along with CEA 11/2006. On 8-8-2006 both the appeals i.e., CEA 23/2005 and CEA 11/2006 were posted and it was submitted by the appellant-assessee (In CEA 11/2006) that appeal had been filed against the finding in para 9 of the order of CESTAT. As per the order sheet in CEA 11/2006 it is seen that both the appeals have been admitted on 7-11-2006. 11. The question of law raised in both the appeals are as follows - CEA 23/2005 : (1) Whether the Tribunal was right in coming to a conclusion that prohibition under Rule 7(1)(b) [now Rule 9(1)(b)] of the CENVAT Credit Rules will not be applicable to the facts of the instant case? (2) Whether the Tribunal was right in upholding the CENVAT Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended period of Limitation i.e., question No. 3 formulated in CEA No. 11/2006 and accordingly substantial question of law No. 3 formulated herein above is considered and answered by us. It is contended by Sri. Shivadas, learned counsel for Assessee that assessee is a State Government Undertaking, whose accounts are audited by Government Agencies including a statutory audit by the Accountant General. It is contended that there was no intention to evade payment of duty and it was contended that assessee was adopting cost construction method of valuation for valuing the sandalwood oil and the method of accounting by raising the journal vouchers was adopted only for accounting purpose and book adjustment each year and since the accounts was kept open for perusal by the Officers of the department and the audit parties having not observed any deficiency or suppression at any point of time till the internal audit wing noticed there has been suppression of facts relating to actual cost of production of final products and that they have not evaded duty intentionally. It is further contended by Sri. Shivadas that whatever duty was paid on the sandalwood oil in respect of such oil transferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction provided the buyer and the seller being not connected. He contends that Sec. 4(1)(b) mandates that assessable value shall be determined as per Valuation Rules in respect of other transaction including the goods, which are not sold. He contends that Valuation Rules, 2000 have been introduced along with new Sec. 4(1)(b) i.e., transaction value and the appropriate Rule being Rule 8, which is applicable which mandates that excisable goods on stock transfer basis for home consumption, the value shall be 115% of the cost of production or manufacture of such goods and this having not been followed by suppression has resulted in invoking extended period of limitation which is just and proper. He submits that Board has issued a Circular dated 30-6-2000 explaining the interpretation of new provisions of Valuation Rules, 2000 wherein it has been clarified that in respect of computation of cost of production, CAS-4 technique formulated by the Institute of Cost and Works Accountant of India should be followed. He contends that assessee had adopted the assessable value by applying the Valuation Rules, 2000 for captive clearance from Mysore unit to Bangalore unit at the rate of Rs. 6,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and also confirmed the action of the department of invoking of longer period of limitation, as such the prohibition under Rule 7(1)(b) is itself inapplicable to the facts of the case and contends that the duty paid by the Mysore unit cannot be taken by the Bangalore unit under any other provision of Cenvat Credit Rules, 2002. It is further contended that assessee had collected the unpaid excise amount by way of increased MRP Maximum Retail Price on the rate of soaps from the consumers and having added the price in the sandalwood oil in the MRP and having collected the same from the consumers the evasion of the duty by Mysore unit has definitely resulted in revenue loss and accordingly seeks for setting aside the order of the Tribunal. He further contends that irregularity committed by the respondent has been continued for a period of four years and this itself suggests the intention on the part of assessee for evading payment of duty and accordingly seeks for setting aside the order of the Tribunal and seeks for answering the question of law in favour of appellant Revenue. 17. Per contra, Sri Shivadas, learned Counsel appearing for the assessee would support the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2002 i.e., Section 4(1)(a), 4(1)(b), Rule 8 of Valuation Rules, 2000 and Rule 7(1)(b) of Cenvat Credit Rules 2002 respectively and they read as under : "Sec. 4(1)(b) of the Central Excise Act, 1944 - 4. Valuation of excisable goods for purposes of charging of duty of excise. - (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall - (a) in a case where the goods are sold by the assessee, for delivery at the time and place of the removal, the assessee and the buyer of the goods are not related and the price is the sole consideration for the sale, be the transaction value ; (b) in any other case, including the case where the goods are not sold, be the value determined in such manner as may be prescribed." "Sec. 11A of Central Excise Act, 1944 :- Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or (erroneously refunded, whether or not such non-levy or non-payment, short-levy or short-payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the provisions of Sections 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein : Provided further that, if such person has paid duty in part, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the provisions of Sections 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein : Provided further that, if such person has paid duty in part, interest and penalty under sub-section (1A), the Central Excise Officer, shall determine the amount of duty or interest not being in excess of the amount partly due from such person.] [2A Where any notice has been served on a person under sub-section (1), the Central Excise Officer, - (a) in case any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any wilful misstate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid before the date on which the Finance Bill, 2001 receives the assent of the President. (3) For the purposes of this section - (i) "refund" includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (ii) "relevant date" means,- (a) in the case of excisable goods on which duty of excise has not been levied or paid or has been short-levied or short-paid - (A) where under the rules made under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) in any other case, the date on which the duty is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 or the rules made thereunder with intent to evade payment of duty. Findings CEA. 11/2006 20. The issue viz., the substantial questions of law raised in CEA. 11/2006 is taken up first since the issue regarding invoking the longer period of limitation has been raised in the said appeal. The said question reads as under : "Whether the Tribunal in the above facts and circumstances, was right in upholding the order of the lower authority invoking the longer period of limitation u/Sec. 11-A(1) of the Central Excise Act, 1944, when the law on this issue has been settled on the numerous decisions of the Supreme Court?" 21. The decisions of the Hon'ble Supreme Court relied upon by the learned counsel for the assessee are as follows - (1) 2007 (216) E.L.T. 177 (S.C.) - Continental Foundation Jt. Venture v. Commr. of C. Ex., Chandigarh-I. (2) 2004 (165) E.L.T. 485 (S.C.) - Bharat Electronics Limited v. Commissioner of C. Ex., Meerut. (3) 1994 (74) E.L.T. 9 (S.C.) - Tamil Nadu Housing Board v. Collector of Central Excise, Madras. (4) 2005 (179) E.L.T. 276 (S.C.) - Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on any excisable goods before its removal from factory of manufacture. The assessment of excisable goods is dependant on provisions of Section 4(1)(a) or Section 4(1)(b) of the Central Excise Act, 1944, as the case may be. In case an assessee does not sell the excisable goods but indulges in captive consumption either in his own factory or elsewhere. Section 4(1)(b) of the Act contemplates that assessable value shall be determined as may be prescribed. The prescription can be traced to the provisions of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. As extracted herein above Rule 8 states that where the excisable goods are not sold by the assessee, but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be 115% of the cost of production or manufacture of such goods. The methodology for determining the cost of production in respect of such captively consumed goods are governed by the guidelines prescribed under the different Board Circulars. 25. During the year 2000-01 the Assessee-Mysore unit had undertaken to pay duty on sandalwood oil as and when removed from their factory by ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to determination of cost of production for captively consumed goods. (5) This Circular may be brought to the notice of the field formations. (6) Suitable Trade Notices may be issued for the benefit of the Trade. (7) Hindi version will follow. (8) Receipt of these instructions may be acknowledged. In the above circular the Revenue has clarified its earlier circular dated 30-10-1996 which reads as under : Circular No. 258/92/96-CX Dated 30-10-96 F. No. 6/28/94-CX. 1 Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs, New Delhi Subject : Assessable Value in the case of Goods captively consumed - Addition of Profit - Reg. I am directed to refer to instructions contained in Board's letter F. No. 6/64/80-CX. 1 dated 6-12-80, Circular F. No. 6/72/85-CX.1 dated 11-3-86 and Issue 'A' of Section 37B order No. 24/14/93 dated 31-12-93 regarding the method to be followed for determining assessable value of goods captively consumed. The Board in its order dated 31-12-93 issued under section 37-B has clarified that for the purpose of assessment of goods captively consumed, value should be arrived at by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier circular/instructions as mentioned above stand modified to this extent. Sd/- (S.C. Bhatia) (Under Secretary to the Govt. of India) Annexure A clarification has been sought whether gross profit or gross profit before tax has to be taken into consideration for determination of assessable-value under Rule 6(b)(ii) of Central Excise Rules, 1975. It is clarified that for the purpose of assessable value, profit before tax should be considered. "Profit before" is, invariably, a distinct item appearing in the Profit & Loss Account of companies. Profit before tax is arrived at after providing for interest and depreciation. Therefore, cost of production of the captively consumed goods will also include applicable interest, depreciation etc. 2. As regard the methodology of determining percentage of profit with reference to sale of the previous year and applying it is to the cost of production of the present year (which presently in vogue), the existing methodology may continue. 3. It is clarified that profit before tax should be related to the net-sales (total sales minus Excise Duty). Further, profit percentage so computed should be adjusted for its application on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps. Thus, there is no sale of goods and thus Sec. 4(1)(b) is applicable to the facts of the present case together with Valuation Rules, 2000. The assessee has removed excisable goods on stock transfer basis for captive consumption and the appropriate rule applicable would be Rule 8 of Valuation Rules, 2000. According to which the value shall be 115% of the cost of production or manufacture of goods. The circular dated 30-6-2002 issued by the Board makes it abundantly clear that even if identical or comparable goods have been manufactured and sold by the same assessee, the assessable value of captively consumed goods shall be taken at 115% as the cost of manufacture of goods. 28. In the instant case the assessee first adopted assessable value at Rs. 6,589/- per kg. during the year 2000-01 for captive clearance of sandalwood oil to their Bangalore unit while the actual rate was much more. Though assessee had cleared by way of sale of sandalwood oil to third parties at a much higher rate they had not increased cost of production of sandalwood oil so cleared to Bangalore Unit, despite the cost of production having gone up which assessee was aware and the fact of increase in cost had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the notice of the department about the change in the value of the sandalwood oil for the subsequent period and this burden which has been cast on the assessee has not been discharged by assigning any valid reason. However in the statement made by the Company officials before the Investigating Authority as recorded u/Section 14 of the Central Excise Act, particularly that of Sri. M.K. Hanumanthaiah, Deputy General Manager, Mysore Unit, it is admitted that, after submitting a cost sheet on 18-8-2000 there was revision in the value nor the assessee disclosed the increase in the value to the department nor the differential duty was paid. However, when it was detected by the officers the same came to be paid. These statements have remained uncontraverted. 32. Yet another factor to be noticed by us is that assessee raised journal vouchers at Mysore unit for the difference in stock transfer price and price element/new valuation as was evident from the vouchers which fact is not disputed. Though both Mysore unit and Bangalore unit were aware about this depicting of difference in values, the assessee did not bring it to the notice of the department and on facts it was found by the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. How much the weight is to be attached thereto would depend upon the facts of each case. 34. In the instant case it is seen that assessee was fully aware that it was adopting self removing procedure and was assessing the same by adopting the Valuation Rules, 2000, by adopting the cost construction method and the price of the product sold would be the determining factor and knowingly fully about this, it did not chose to inform the department by giving the cost analysis when there was escalation in the price of sandalwood oil. Hence, the said judgments are inapplicable to the facts of the present case. (c) Continental Foundation - An incorrect statement cannot be equated with a wilful mis-statement for invoking extended period of limitation. In para 10 of the said judgment it has been held as follows - "When revenue invokes the extended period of limitation u/sec. 11A, the burden is cast upon it to prove suppression of fact. An incorrect statement cannot be equated with a willful mis-statement. The latter implies making of an incorrect statement with the knowledge that the statement was not correct." As observed by us herein above in the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the case. In view of the above discussion, we are of the considered opinion that the extended period of limitation invoked in the instant case is squarely applicable to the facts of the present case. Hence, question No. 3 formulated hereinabove in CEA No. 11/2006 (which alone arises for consideration the said appeal) is to be answered in the affirmative i.e., in favour of the Revenue and against the Assessee. Re : CEA 23 of 3005 37. The revenue has contented that tribunal was in error in holding prohibition under Rule 7(1)(b) will not be applicable to the facts of the case. Per contra Sri. Shivdas would vehemently contend that department/revenue cannot deprive the assessee of taking Cenvat credit of the additional duty paid. When admittedly there is no sale and it was only a stock transfer and hence assessee would not be hit by exclusion clause under Rule 7(1)(b). In order to consider this rival contention Rule 7(l)(b) is required to be extracted. It reads as under : "Rule 7. Documents and Accounts - (1) The Cenvat credit shall be taken by the manufacturer on the basis of any of the following documents namely : - (c) xxxxx (d) &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws relied on by the learned advocate are squarely applicable. We are in agreement with the above contentions of the appellant that Rule 7(1)(b) of CENVAT Credit Rules cannot debar availment of CENVAT credit at Bangalore factory for the simple reason that the transaction between the two factories is not one of sale. It should also be borne in mind that both the factories belong to the Government of Karnataka. Although the irregularity committed in Mysore resulted in Revenue loss to the Mysore Commissionerate, looking into the totality of the circumstances, there was no revenue loss to the exchequer at all. This fact has been recorded by both the Adjudicating authorities. Whatever duty is paid at Mysore on Sandalwood oil, the same is taken as CENVAT credit at Bangalore. The duty on the finished products namely, toilet soaps is discharged under Section 4A on the basis of MRP. Since the value of soap takes into account the escalated cost of the sandalwood oil there cannot be any short payment of duty on the toilet soaps at Bangalore. In effect, the Government did not suffer any loss." 38. Learned counsel for the revenue has contended that Tribunal had relied upon the Judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versed at eight per cent (i.e. the manufacturer needs to debit an amount equal to eight per cent of the price of the exempted final product charged for the sale of such goods. This amount is a presumptive sum calculated at eight per cent of the price charged. The rate of eight percent is the measure to calculate the presumptive sum. Further, reading Rule 57CC(1) with Rule 57CC(8) one finds that entire rule is based on "deemed price" and "recovery of presumptive amount" and, therefore, in our view, the words "price charged at the time of sale" must be read as "eight per cent of the value of the exempted goods". Our interpretation stands supported by the Instructions issued by the Central Board of Excise and Customs based on the Circular No. B-42/1/96-TRU, dated 27-9-1996. This is where Section 4 and the Valuation Rules, 1975 come into play. In the light of the above discussion, the adjudicating authority was required to adjudicate upon applicability of Rule 6(b)(i) and Rule 6(b)(ii). However, it has been held by the adjudicating authority that Rule 6(b)(i) is not applicable, hence, in our view the only issue which remains to be decided is whether all the requisite elements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the force of law; (vii) The additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v) and (vi) above; and (viii) The additional duty of excise leviable under section 157 of the Finance Act, 2003 (32 of 2003). Paid on any inputs or capital goods received in the factory on or after the first day of March, 2002, including the said duties paid on any inputs used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86-Central Excise, dated the 25th March, 1986, published vide number G.S.R. 547(E), dated the 25th March, 1986, and received by the manufacturer for use in, or in relation to, the manufacture of final products, on or after the first day of March, 2002. Explanation - For the removal of doubts it is clarified that the manufacturer of the final products shall be allowed CENVAT credit of additional duty leviable under section 3 of the Customs Tariff Act on goods falling under heading 98.01 of the First ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated the 9th September, 2003 [G.S.R. 717(E), dated the 9th September, 2003], Shall respectively be utilized only for payment of duty on final products, in respect of which exemption under the said notifications No. 39/2001-Central Excise, dated the 31st July, 2001, No. 56/2002-Central Excise, dated the 14th November, 2002, No. 57/2002-Central Excise, dated the 25th June, 2003, and No. 71/2003-Central Excise, dated the 9th September, 2003, is availed of.] [(4) When inputs or capital goods, on which CENVA1 credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 7.] [(4A) Notwithstanding anything contained in these rules,- (a) ........... (b) ........... (c) ........... (5) The amount paid under sub-rule (4) shall be eligible as CENVAT credit as if it was a duty paid by the person who removed such goods under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows : CEA 23/2005 1. Whether the Tribunal was right in coming to a conclusion that prohibition under Rule 7(1)(b) (now Rule 9(1)(b) of the CENVAT Credit Rules will not be applicable to the facts of the instant case? Affirmative. Tribunal was right in coming to a conclusion that prohibition under Rule 7(1)(b) would not be applicable in the facts of the case. 2. Whether the Tribunal was right in upholding the CENVAT credit taken by the Bangalore Unit, based on the supplementary invoice raised by the Mysore Unit, by concluding that Rule 7(1)(b) is not applicable, especially in the view of the fact that if prohibition under Rule 7(1)(b) is not applicable then the provisions of the Rule itself ceases to be applicable? Affirmative. Prohibition under Rule 7(1)(b) of CENVAT Credit Rules is not applicable to the facts of the case. 3. Whether the Tribunal was right in passing the impugned order by relying on decisions which are under challenge before the Hon'ble Supreme Court? Does not arise. The facts of the case on hand are distinguishable to the facts of those cases. CEA. No. 11/2006 : 1. Whether the Tribunal, in the above facts and circumstances, was right in uphol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consignments of the said goods cleared under the said 84 Bills of Entry was actually paid on 17-3-1999. 2.1 In the Union Budget presented on 27-2-1999, the duty structure on project imports was increased from 10% CVD only to 5% Basic Customs Duty + 10% of Basic Customs Duty as surcharge + 10% CVD. The investigations of DRI, Ahmedabad had revealed that the noticee, with mala fide intention to get the benefit of lower duty rates as applicable to the goods imported and cleared before 1999 Budget, had deposited their Cheques with Central Excise Department, when they knew that appellant had insufficient funds in the respective bank accounts. Since the duty leviable on the said goods cleared under the said 84 Bills of Entry was actually paid on 17-3-1999, the revised rates of duty as applicable to the goods cleared after presentation of Budget 1999 were liable to be paid by the noticee. Accordingly, after detailed investigation, a show cause notice was issued by the Additional Director General, DRI, Ahmedabad on 22-8-1999, demanding duty amounting to Rs. 96,26,91,711/- payable on the said goods as per revised rates. The same was confirmed by the adjudicating authority (i.e. Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envat Credit Rules, 2004 which make the credit admissible. He relied upon the orders of Karnataka High Court in the case of Karnataka Soaps & Detergents Ltd. v. CCE, Mysore [2005 (192) E.L.T. 892 (Tri.-Bang.)] and [2010 (258) E.L.T. 62 (Kar.)] (ii) That even if the appellant's case is considered to be falling under Rule 9(1)(b) still by virtue of the following case laws, credit was rightly availed : (a) Karnataka Soaps & Detergents Ltd. v. CCE, Mysore - 2005 (192) E.L.T. 892 (Tri.-Bang.) (b) Karnataka Soaps & Detergents Ltd. v. CCE, Mysore - 2010 (258) E.L.T. 62 (Kar.) (c) Jai Raj Ispat Ltd. v. CCE, Hyderabad - 2007 (217) E.L.T. 272 (Tri.-Bang.) (d) CCE, Hyderabad v. Jairaj Ispat Ltd. - 2009 (245) E.L.T. 118 (A.P.) (e) M/s. Godrej Industries Ltd. v. CCE - 2008 (232) E.L.T. 108 (Tri.-Mum.) (iii) That as per the Hon'ble Supreme Court's decision in the case of Coca Cola India Pvt. Ltd. [2007 (213) E.L.T. 490], there cannot be any intention to evade payment of duty where duty paid is available as Cenvat credit. (iv) That no Cenvat credit is denied under Rule 9(1)(c) of Cenvat Credit Rules, 2004 in situations wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and circumstances of this case inasmuch as 'Explanation' given under Rule 9(1)(b) of the Cenvat Credit Rules, 2004 was not existing in the Rule 9(1)(b) explained by Hon'ble High Court and appellant has wrongly placed reliance on the judgment of Karnataka High Court. That it is clear from the Explanation under Rule 9(1)(b) that but for the 'Explanation' added Challans would not have been valid documents for taking Cenvat credit and that in view of the Gujarat High Court's order in the case of Dhanlaxmi Texturisers v. UOI [2005 (179) E.L.T. 23 (Guj.)] order of High Court of Karnataka in the case of Karnataka Soaps & Detergents v. UOI (supra) need not be followed as a precedent. (iv) Ld. AR also relied upon the following case laws in support of his arguments :- (a) CCE, Calcutta v. Alnoori Tobacco Products - 2004 (170) E.L.T. 135 (S.C.) (b) Housing & Dev. Corp. Ltd. (HUDCO) v. CST, Ahmedabad - 2012 (26) S.T.R. 531 (Tri.-Ahmd.) (c) CCE, Bangalore v. Srikumar Agencies - 2008 (232) E.L.T. 577 (S.C.) = 2009 (13) S.T.R. 3 (S.C.) (d) Bharat Earth Movers Ltd. v. CC, Madras-I - 2001 (129) E.L.T. 580 (Mad.) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant. 5.1 Provisions of Rule 9(1) are reproduced below :- "Rule 9 : Documents and accounts. - (1) The Cenvat credit shall be taken by the manufacturer or the provider of output service or input service distributor, as the case may be, on the basis of any of the following documents, namely :- (a) an invoice issued by - (i) a manufacturer for clearance of - (I) inputs or capital goods from his factory or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer; (II) inputs or capital goods as such; (ii) an importer; (iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002; (iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Central Excise Rules, 2002; or (b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng specifications for the preparation of an invoice :- "(3) The invoice shall be prepared in triplicate in the following manner, namely :- (i) The original copy being marked as ORIGINAL FOR BUYER (ii) The duplicate copy marked as DUPLICATE FOR TRANSPORTER (iii) The triplicate copy marked as TRIPLICATE FOR ASSESSEE" 5.3 From the above prescription, it is evident that for the preparation of an invoice, there has to be a buyer to whom goods are sold. Further, Rule 11(7) of the Central Excise Rules, 2002 prescribe the following : "Rule 11. Goods to be removed on invoice. - (7) The provisions of this rule shall apply mutatis mutandis to goods supplied by a first stage dealer or a second stage dealer : Provided that in case of the first stage dealer receiving imported goods under an invoice bearing an indication that the credit of additional duty of customs levied on the said goods under sub-section (5) of Section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be admissible, the said dealer shall on the resale of the said imported goods, indicate on the invoice issued by him that no credit of the additional duty levied under sub-section (5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be held that payment of differential duty was paid as a result of re-assessments with respect to imported capital goods as per law laid down by Delhi CESTAT in the case of Birla Jute Manufacturing Co. Ltd. v. CC, Calcutta (supra). In Para 7 of this judgment, inter alia, it was held that refund claims and demands under Section 27 & Section 28 of the Customs Act, 1962 do involve re-assessment of the duty originally assessed. Further, as per the judgment of CCE, Raipur v. Ambuja Cement Eastern Ltd. (supra) Cenvat credit will be admissible on duty paying TR-6 challan when it is not disputed that goods were used in the manufacture of excisable goods to be cleared on payment of duty. Further, in Para 40 of the judgment of Karnataka High Court in the case of Karnataka Soaps & Detergent Ltd. v. CCE, Mysore (supra) it is held that documents specified in Rule 7 (present Rule 9 of Cenvat Credit Rules, 2004) of the earlier Cenvat Credit Rules is only illustrative in nature and cannot bar taking of Cenvat credit under Rule 3 of Cenvat Credit Rules. When additional duty is paid under reassessment or on being pointed out by the Revenue then the credit of such duty paid will be admissible as Ce ..... 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