TMI Blog2019 (2) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... d to clearances of inputs as such by reversing cenvat credit availed thereon under Rule 3 (5) ibid has also not been separately indicated. While the adjudicating authority has not adequately addressed the various contentions and submissions of the appellant made by the appellant during the adjudication proceedings, the appellant themselves have not submitted clear break up each type of removals of the goods received by them from Unit-I. So also, while appellants have submitted information in respect of credit reversed due to export, no details have been given with regard to value or quantum of exports concerned and the datas of such export - the matter requires to be remanded to the adjudicating authority for de novo consideration. Penalty - Held that:- The entire dispute pertains to interpretation of the provisions relating to “deemed manufacture” and in particular, the eligibility to avail cenvat credit on goods - also appellants have consistently provided all the necessary details to the department as and when called for including reply dt. 13.10.2011 in response to audit party’s queries dt. 6.9.2011 - penalty not warranted and is set aside. Appeal allowed in part and p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by appellants in respect of clearance of goods made by them during September 2010 to March 2012 by adjusting from allegedly ineligible cenvat credit, along with interest and imposition of penalties under various provisions of law. In adjudication vide impugned order dt.12.12.2012 demands of ₹ 11,54,59,277/- with interest, ₹ 90,85,559/- with interest, was confirmed by the adjudicating authority; penalties equivalent to these amounts were also imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Aggrieved, appellants are before this forum. 2. Today when the matter came up for hearing, on behalf of the appellant, Ld. Senior Counsel Shri Shri Prakash Shah assisted by Ms. D. Naveena, Advocate submitted made oral and written submissions which can be broadly summarized as under : i) It is an undisputed fact that all the goods received from Unit I were cleared on payment of duty or exported. The respondent-department has accepted the appellant s assessment of goods received from Unit-I for the purpose of clearance and payment of excise duty. However, the cenvat credit availed on them has been sought to be denied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces were made in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. Such removals were made with proper invoices and accounted for in ER-1 returns. Therefore, the credit availed on them cannot be demanded in as much as such credit had been reversed on removal of goods. iv) Ld. Advocate drew attention to letter dt. 04.05.2012 on page 61 of the appeal book which was in response to letter dt. 27.04.2012 from Superintendent of Central Excise, Hosur enclosing details of payment of duty on goods received from Unit-I and cleared from their unit for home consumption, payment of duty on goods manufactured after repacking, relabeling etc. and cleared for home consumption etc. v) Ld. Advocate drew attention to another letter of appellant dt. 30.11.2012, in response to letter dated 21.11.2012 of Superintendent of Central Excise, Hosur wherein they had reiterated that the procedure followed by them was in accordance with the provisions of Central Excise Act, 1944 and Cenvat Credit Rules, 2004. vi) Ld. Advocate also alluded to copies of ER1s on pages 64 to 83 of the appeal book to contend that all the necessary details had also been made known to the department in their returns. vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliberate suppression of facts or wilful misstatement. Therefore, extended period of limitation cannot be invoked. 3. On the other hand Ld. A.R Shri K. Veerabhadra Reddy supports the impugned order and made submissions which can be broadly summarised as under : i) The entire arrangement of supply of goods from Unit-I of the appellant and further claim of manufacturing activity having been done on those goods was only for the purpose of taking cenvat credit which would have been otherwise ineligible for them. ii) In fact, appellant was functioning like a merchant manufacturer and the actual goods were manufactured by the Unit-I only. Ld. A.R drew our attention to paras 5 to 18 of the impugned order whereby the adjudicating authority has alluded to the communication dt. 04.05.2012 of the appellant which had not conveyed any details of change of M.R.P claimed to have been made by the appellant. The adjudicating authority has also correctly observed that the submissions and defence of appellant was vague on the actual performance of the deeming manufacturing activities as evident from the phrases such as the activities may be performed and as and when required . iii) Alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r alteration of retail sale price on it or adoption of any other treatment on the goods to render the product marketable to the consumer. 5.3 In our view, the dispute involved in this appeal relates to Section 2f (iii) of the definition as extracted above. We find that Section 2 (f) (iii) incorporates a broad spectrum of processes and activities which have been brought into the ambit of manufacture by legal fiction including packing or repacking of goods, labelling or relabeling of containers including declaration or alteration of retail sale price on it or adoption of any other treatment on the goods to render them marketable to the consumer. 5.4 From the facts on record and in particular, from the exchange of correspondence between the appellant and the department, it is evident that appellant has all along been maintaining the following : (i) Goods received by them from Unit-I have been cleared on payment of duty under Section 4A assessment on M.R.P. In respect of goods where there is revision of MRP, the Central Excise duty is discharged appropriately in view of Section 2(f) (iii) of the Act since the process will amount to deemed manufacture . Credit availed ab in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not required to reverse the credit availed by them at the input stage. 5.8 At the same time, we find that while the appellants have given the data as mentioned above, it is not clear therefrom as to what quantum of goods were subjected to processes amounting to deemed manufacture and / or on which M.R.P was revised upwards resulting in discharge of differential duty liability. So also, the data with regard to clearances of inputs as such by reversing cenvat credit availed thereon under Rule 3 (5) ibid has also not been separately indicated. On the other hand, in respect of both these clearances combined information has been given in the statement submitted by the appellant to the Commissioner in their letter dt. 23.11.2012 and also in their reply to Range Superintendent vide letter dt. 30.11.2012. 5.8 In the circumstances, while the adjudicating authority has not adequately addressed the various contentions and submissions of the appellant made by the appellant during the adjudication proceedings, the appellant themselves have not submitted clear break up each type of removals of the goods received by them from Unit-I. So also, while appellants have submitted information ..... X X X X Extracts X X X X X X X X Extracts X X X X
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