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TMI Blog2025 (1) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... were imported. Therefore, there has been a continuous attempt on the part of assessee to misrepresent and suppress the facts deliberately with the intention to avoid payment of the amount availed as CENVAT Credit at the time of 'as such' clearances. Thus, Appellant is liable to be imposed with penalty as held by the Adjudication authority. Extended period of limitation - HELD THAT:- As per the finding in the impugned order, the Adjudication authority held that the facts regarding inputs cleared 'as such' was established by investigation. However as evident from the ER-1 return submitted by the Appellant and as per the invoices relied in the impugned order, Appellant had clearly mentioned in the invoice that the goods are cleared 'as such'. Facts being so, there is no reason to allege that the Appellant has suppressed the facts regarding removal of inputs 'as such' and it was not established by way of investigation by the Department. Hence, the impugned order is not tenable on limitation. Reversal of Cenvat credit on 'as such' clearances - HELD THAT:- The case of the department is that they have not reversed the Cenvat credit taken of the SAD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f customs (SAD) paid on the imported inputs, whenever the same were removed 'as such' from their factory. As a result of investigation, proceedings were initiated and Adjudication authority as per the Order-in-Original dated 14.10.2011 confirmed payment of duty (SAD) amounting to Rs. 64,20,716/- in respect of 'as such' clearances under Rule 3(5) Cenvat Credit Rules, 2004 pertaining to the period from October 2005 to November 2008 in terms of proviso to Section 11A of the Central Excise Act, 1944 read with Rule 14 of the CENVAT Credit Rules, 2004 along with interest and also imposed equal amount of penalty under Section 11AC of the Central Excise Act, 1994, read with Rule 15 of Cenvat Credit Rules, 2004. The Adjudication authority also imposed penalty of Rs. 16,05,000/- on Shri T. Sripathy, Managing Director, and Rs.16,05,000/- on Shri. M. Srinivasan, Asst. Manager (Accounts), co-appellants under Rule 26 of Central Excise Rules, 2002 also. Aggrieved by said order present appeals are filed by the appellants before this Tribunal. 2. Since the issue involved is common in all the 3(three) Appeals they are being disposed by this order. 3. When the appeals came up for hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stainable. The Ld. Counsel also draws our attention to the relevant provision of Rule 3(5) of CENVAT Credit Rules, 2004 where it is specifically stated that:- (5) When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, 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 9 . 5. The Ld. Counsel further submits that in compliance with the above, the Appellant had removed the goods under the cover of the invoice referred to Rule 9 and amount also paid in excess than what is availed by the Appellant as CENVAT credit. The only allegation in the present show cause notice is that Appellant had availed SAD credit but not paid at the time of removal. However, the above said provision only directs the Appellant to pay an amount equal to the credit availed and does not prescribe as to how the amounts should be reflected in the invoices. Even as per Rule 3(4)(b), such payment can be made util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive Enterprises - 2009 (235) E.L.T. 785 [Guj], Department Appeal was dismissed and maintained by Supreme court in case [2009 [243] ELT A 120] [Supreme Court] d. CCE, Pune-III Vs. Ajinkya Enterprises - 2013 (294) E.L.T. 203 (Bom.) e. Ajinkya Enterprises Vs. CCE, Pune-III 2013 (288) E.L.T. 247 (Tri.-Mumbai) f. CCE., Bangalore-V Vs. Vishal Precision Steel Tubes Strips Pvt. Ltd. - 2017 (349) E.L.T. 686 (Kar.) g. Vickers Systems International Ltd Vs. CCE., Pune-1-2008 (229) E.L.T. 298 (Tri. Mumbai) h. Crompton Greaves Ltd Vs. CCE., Mumbai-III - 2008 (230) E.L.T. 488 (Tri.-Mumbai) 6. As per the decision of Tribunal in the matter of M/s Komet Precision Tools (supra) and the Hon ble Bombay High Court in the matter of M/s Anjinkiya Enterprises it is held that:- once duty on final product has been accepted by the Department, credit cannot be denied by holding that the process does not amounts to manufacture. 7. It is further submitted that the duty paid should be treated as reversal of CENVAT credit. The Ld. Counsel also draws our attention to the judgment of the Hon ble High Court of Karnataka in the matter of CCE Vs. M/s Vishal Precision Steel Tubes and Strips, wherein it is held that:- 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from their unit No. I situated at A-94 F-1/2, Phase-I, MIDC, Dombivli (E) to unit No. II situated at D-26, MIDC, Phase-ii, Dombivli (E), since he believed that the said clearances were not sale of goods but transfer of goods; that they have not paid an amount equal to Cenvat Credit availed of 4% Additional duty of Customs in respect of inputs cleared as such to their other unit i.e. unit No. II, during the period from May 2006 to August 2006. He accepted the responsibility for the said mistake/flaw as he was looking after Excise and Customs matters of the Factory. 9. Heard both sides perused the records. 10. We have gone through the evidence produced by the Appellant and the Respondent. As per the invoices relied by the Adjudication authority, it is shown that the materials were cleared under 'as such' clearance and goods were sold by charging excise duty as per the selling price of the goods. We had also gone through the ER-1 monthly return for the month of April, 2005, where details of the goods manufactured by the Appellant, cleared 'as such', rejected material cleared after rectification, export clearance against CT-3, etc., are clearly mentioned, while filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the credit availed. The credit availed is Rs. 17.32 lakhs and duty debited is Rs. 25 lakhs. Thus, the Appellant has paid excess duty of Rs.7.67 lakhs. Inspite of giving such specific data, no attempt was made by the Adjudication authority to correlate the duty paid by the Appellant and the CENVAT credit availed by them and the SAD allegedly not paid. However, in this regard, Adjudication authority has considered and given the following finding: In paragraph 26.1 it is held that the amount to be paid cannot be equivalent to the duty of excise/educational Cess. Therefore, this contention is untenable and improper in Excise law. Nevertheless, the proper course in such situation is to discharge the liability of payment of amount in terms of provision laid down in Rule 3(5) of the CENVAT Credit Rules towards equal amount of and simultaneously apply of refund in terms of Rule 11B with respect to any payment of duty of excise/education Cess, if claimed to have been made in excess by the Appellant . 13. The Ld. AR further submitted that as held by the Adjudication authority, the Appellant had adopted a strategy to misdirect the investigation from issue of non-payment of amount payable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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