TMI Blog2023 (7) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by them on which central excise duty was paid - the manufacturer or provider of the output service is entitled to take credit of central excise duty paid by them on any input or capital goods received in the factory of manufacturer of final product or by the provider of the out service and any input service received by the manufacturer of final product or by the provider of the output service. The entire transaction on basis of which the cenvat credit has been availed by the appellant is only on paper. Firstly, the goods which are purported to be shown as cleared have not been cleared and invoices were issued on which central excise duty has been shown as paid. The products which have been mentioned on the invoices is primarily a finished goods of the appellant and therefore otherwise also cannot be an input for manufacturer of the finished product - the cenvat credit availed by the appellant on the basis of their own invoices is not permissible as per the provisions of the law and therefore, the finding given in the impugned orders agreed upon, which are here in appeal and therefore the cenvat credit availed by the appellant denied on the basis of invoices issued in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd scrap. The appellant has gone to the extent that for such waste i.e. broken/ damaged bottles invoices were issued in the name of the appellant themselves by showing the value applicable to fully finished unbroken/ undamaged bottles and payment of duty thereon. Duty paid on such goods were taken as cenvat credit by them on the basis of their own invoice. It is the matter of record that the damaged/broken bottles were not reused or manufactured of the bottles and same were sold as scrap on payment of duty on nominal value ranging between Rs 0.44 per Kg to Rs.2.54 per Kg. 1.2 It has been contention of the department that the duty paid by them on broken/ damaged bottles as finished glass bottle were being shown cleared by them in spite of the fact that no clearances were affected under the invoices but it was a mere settlement of the daily stock adjustment undertaken by the appellant without authority of law. The cenvat credit availed and utilized on the basis of the duty paid without clearance of any goods is in violation to provision Rule 3 (1) of Cenvat Credit Rules, 2004 and therefore the appellant have availed cenvat credit in violation of the provision of Cenvat Credit Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimately the appellant has paid duty on scrap/ damaged bottles. The learned advocate relied upon the following judgments to claim that even if duty was not payable, the credit of the duty paid by them shall be available. Ajinkya Enterprises 2013 (294) E.L.T. 203 (Bom.) UTTAM GALVA STEELS LTD. 2016 (336) E.L.T. 81 (Tri. Mumbai) M/s. Bajaj Allianz General Insurance Company Limited 2014-TIOL-1540-CESTAT- Mum SUNDARAM CLAYTON LTD. 2014 (33) S.T.R. 414 (Tri. - Chennai) 2.1 The learned advocate has also vehemently contended that the situation is revenue neutral and therefore the entire proceeding need to be withdrawn. The learned advocate has relied on following judgment to support his argument. Coca- Cola India Pvt Ltd 2007 (213) ELT 490 (SC) Ineos Abs Limited - 2010 (254) ELT 628 (Guj.) 2.2 It has also been contended by the learned advocate that provisions of Rule 3 (5 ) of CCR, 04 does not apply in this situation because it is not the case of the appellant that inputs purchased by the appellant for use in the manufacture of the final product, have been cleared as such by them. 2.3 The learned advocate has also argued that demand in the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be. in this case since there is no clearance of the goods, there was no necessity for payment of the duty. An assessee cannot make payment of central excise duty on his own whims and conveniences. From the facts of this matter, we also note that creation of invoice in the appellant s own name and payment of the duty was not a mistake but it was a conscious decision taken by them to make good of the total of all finished bottles. 4.2 The assessee after making payment of the central excise duty on the basis of invoice issued by them to themselves they have taken Cenvat credit of the equal amount in the books of accounts as per provision of rules 3 of the Cenvat Credit Rules, 2004. It will be relevant to have a look at the provision of rule3 of the Cenvat Credit Rules, 2004 before proceeding further. RULE 3. CENVAT Credit. (1) A manufacturer or producer of final products or a [provider of output service] shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act : [Provided that CENVAT credit of such duty of excise shall not be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods received in the factory of manufacture of final product or [by] the provider of output service on or after the 10th day of September, 2004; and (ii) any input service received by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004, including the said duties, or tax, or cess paid on any input or input service, as the case may be, 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 in the Gazette of India 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 product, on or after the 10th day of September, 2004 : [Provided that the CENVAT credit shall be allowed to be taken of the amount equal to central excise duty paid on the capital goods at the time of debonding of the unit in terms of the para 8 of Notification No. 22/2003- Central Excise, published in the Gazette of India, part II, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts were very different and therefore the case laws relied upon by the counsel for the appellant are not applicable to the facts of the present case. 4.6 We take the shelter of the decision of the larger bench of this tribunal in the case of JAY YUHSHIN LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, NEW DELHI reported under 2000 (119) ELT 718 (Tri. Delhi) the relevant para is reproduced below :- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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