TMI Blog2014 (2) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... be eligible for Cenvat credit of this additional customs duty, if and only if they have evidence to prove that the goods on which this duty had been paid had also been transferred by M/s Kelvinator of India Ltd. to them and had been used by them in the manufacture of excisable goods. If the goods imported by M/s Kelvinator of India Ltd. free of duty during 1993-94 were used by them (M/s Kelvinator) in the manufacture of Rotors and Stators prior to their factory having been taken over by the present appellant and, as such, the present appellant did not receive on transfer the stock of CRNGO steel sheets imported by M/s Kelvinator against advance licences, they (the appellant) would not be eligible for Cenvat credit, even if the duty on those goods was subsequently paid by them in 2002 for failure to meet the export obligation. But, if some quantity of steel sheets imported by M/s Kelvinator of India Ltd. had got transferred to M/s Whirlpool of India Ltd. (the appellant) when they took over the factories of M/s Kelvinator of India Ltd., and that quantity was used by them for manufacture they would be eligible for Cenvat credit of additional customs duty paid by them in 2002 on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customs duty liability to the Customs Department and submit bank receipt evidencing the payment. The appellant approached the Customs Department who vide letter dated 04/1/02 intimated the customs duty liability in respect of both the licences alongwith interest. According to this letter, the duty liability in respect of advance licences No. P/L/1524979 was Rs. 5,07,84,452/- alongwith interest of Rs. 11,56,67,003/- and the total customs duty liability in respect of advance license No. P/L/1524077 was Rs. 1,03,89,429/- alongwith interest of Rs. 2,41,69,512/-. The above letter directed the appellant to pay forthwith the above amount of duty alongwith interest. The above letter dated 04/1/02 was followed by another letter 18/3/02 from the Customs reminding the appellant M/s Whirlpool of India Ltd. to pay customs duty alongwith interest in respect of the goods imported free of duty against advance licences. This letter also informed the appellant that on account of failure to meet the export obligation, they become ineligible for exemption under Notification No. 204/92-CUS dated 19/5/92 and in respect of duty free imports made by them, not only customs duty but interest thereon wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Faridabad plant, that M/s Whirlpool of India Ltd. took over the plant from M/s Kelvinator of India ltd. and later on sold it to M/s Tecumseh India (P) Ltd. in 1997 and that when as per the assessee s contention, the CRNGO steel sheets were used by M/s Kelvinator of India Ltd. in their Ballabhgarh plant, it is that factory only which would be eligible for credit of duty if other conditions are satisfied and that since in the Ballabhgarh plant as per their version has been sold of by them, the credit cannot be taken by the appellant in their factory at Faridabad. The Commissioner also observed that in this regard, the appellant have not explained as to under which provision they are entitled to take the credit in their Faridabad plant. 1.6 Against the above order of the Commissioner, this appeal has been filed. 2. Heard both the sides. 3. Shri Tarun Gulati, Advocate, the learned Counsel for the appellant, pleaded that though the additional customs duty of Rs. 95,76,342/- whose Cenvat credit has been taken on 23/2/04 had been paid on 28/10/02 as part of total customs duty of Rs. 6,11,73,881/-, the goods in respect of which this duty had been paid had been received in the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been cleared under bills of entry, the same had been cleared without payment of duty against advance licences and subsequently the duty was paid in 2002 on the directions of the DGFT as per the admission of their duty liability before the Settlement Commission only because the appellant could not meet the export obligation, that in the circumstances of the case, the Cenvat credit has been correctly availed under TR-6 challans, that the availment of Cenvat credit was under due intimation to the Department and, hence, the Department cannot allege wilful misstatement, suppression of facts etc., that for this reason there is absolutely no justification for imposition of penalty on the appellant under Rule 13 of Cenvat Credit Rules and that in view of the above submissions, the impugned order is not correct. 4. Ms. S. Bector, learned DR, defended the impugned order by reiterating the findings of Commissioner and pleaded that the goods had been imported free of duty against two advance licences in 1993-94 by M/s Kelvinator of India Ltd., that these goods were to be used for manufacture of Rotors and Stators for use in the compressors which in turn were to be used in the refrigerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents and merely on the basis of TR-6 challans, the Cenvat credit cannot be availed and that in view of this, there is no infirmity in the impugned order. 5. We have considered the submissions from both the sides and perused the records. 6. In this case, the undisputed facts are that - (a) the imports free of duty of CRNGO steel sheets against two advance licences against export obligation had been made by M/s Kelvinator of India Ltd. during 1993-94 and the imported steel sheets were to be used for manufacture of Rotors and Stators for use in manufacture of compressors for refrigerators and the compressors/refrigerators were to be exported ; (b) the manufacture of Rotors and Stators was taking place in Ballabhgarh factory of M/s Kelvinator of India Ltd.; (c) before the export obligation could be made by M/s Kelvinator of India Ltd., this company was taken over by M/s Whirlpool of India Ltd. (the present appellant) in 1995 and in 1996 the name of the company was changed to M/s Whirlpool of India Ltd.; (d) Ballabhgarh plant for manufacture of Rotors and Stators was sold by the new owner (the appellant) to M/s Tecumseh India (P) Ltd. in 1997; (e) after taking over o ..... 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RNGO steel sheets, in question, in their factory in or in relation to manufacture of excisable goods ; (b) credit has been taken on the documents which are not valid document ; (c) even as per the appellants contention CRNGO steel sheets, in question, were used at Ballabhgarh plant of M/s Kelvinator of India Ltd. which subsequently had been sold to M/s Tecumseh India (P) Ltd. in 1997 and thus when the goods, in question, in respect of which the additional customs duty of Rs. 95,76,342/- had been paid had not been used in the factory of M/s Whirlpool of India Ltd. by them, they would not be eligible for Cenvat credit, that too without even seeking permission from the Department in this regard ; and (d) the credit has not been taken immediately on receipt of the inputs during 1993-94 and far beyond the period of six months from the date of receipt and also far beyond the period of six months from the date of payment of duty (28/10/02). 7. Cenvat credit in respect of any duty paid inputs received by a manufacturer is available to him only for their use by him in the manufacture of final products and if the duty paid inputs are not used by him for this purpose, the Cenvat cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hgarh unit of M/s Kelvinator of India Ltd. for manufacture of Rotors and Stators and subsequently, the Ballabhgarh factory had been sold by new owners - (M/s Whirlpool of India Ltd.) to another company M/s Tecumseh India (P) Ltd. in 1997. Even if the customs duty alongwith additional customs duty in respect of the goods imported against advance licences free of duty by M/s Kelvinator of India Ltd. during 1993-94 was paid by the present appellant in 2002, they would be eligible for Cenvat credit of this additional customs duty, if and only if they have evidence to prove that the goods on which this duty had been paid had also been transferred by M/s Kelvinator of India Ltd. to them and had been used by them in the manufacture of excisable goods. On this point, we find that absolutely there is no discussion in the impugned order. If the goods imported by M/s Kelvinator of India Ltd. free of duty during 1993-94 were used by them (M/s Kelvinator) in the manufacture of Rotors and Stators prior to their factory having been taken over by the present appellant and, as such, the present appellant did not receive on transfer the stock of CRNGO steel sheets imported by M/s Kelvinator against ..... 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