TMI Blog2014 (2) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... ute Manufacturing Co. Ltd Vs CC Calcutta (1983 (8) TMI 253 - CEGAT, NEW DELHI). 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. When additional duty is paid under re-assessment or on being pointed out by the Revenue then the credit of such duty paid will be admissible as CENVAT Credit to the appellant under Rule 9(1)(c) of the CENVAT Credit Rules, 2004. In view of the above settled position of law, the credit was rightly availed by the appellant and accordingly the appeal filed by the appellant is required to be allowed. Once on merits the issue is decided in favour of the appellant, there is no question of imposing penalty and confiscation of capital goods as adjudicated by the lower authority - Decided in favour of assessee. - Appeal No.E/928/2010-DB - Order No. A/10044/2014 - Dated:- 16-1-2014 - MR. M.V. RAVINDRAN AND MR. H.K. THAKUR, JJ. For the Appellant : Shri Vipin Kumar, Adv. For the Respondent : Shri S.K. Mall, Addl. Commissioner (A.R.) JUDGEMENT Per: H.K. Thakur; This appeal has been filed by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the adjudicating authority (i.e. Commissioner of Customs, Kandla) vide OIO No. KDL/COMMR/12/2002 dt.27.03.2002, which was upheld subsequently by the Supreme Court vide Order dt.07.10.2004 in the Civil Appeal No.4299-4305 filed by the noticee. In the course of the investigation, the noticee deposited Rs.36.35 Crores towards differential Customs duty (including CVD and Interest for which present credit was taken) vide TR-6 Challans dt.22.12.1999, 07.12.1999, 06.10.1999, 13.08.1999, 30.06.1999, 28.05.1999 and 15.05.1999. 2.2 An intelligence received by the DRI, Ahmedabad indicated that the noticee has availed the CENVAT Credit in respect of the differential duty paid by them pertaining to the case booked by the DRI and that the said availment of CENVAT Credit was in contravention of Rule 9 of CENVAT Credit Rules, 2004. 2.3 Accordingly, investigation was initiated by DRI, Ahmedabad and a show cause notice was issued to the appellant. After following the principles of natural justice the case was decided against the appellant under Order-in-Original dt.12.05.2010 against which the present appeal has been filed. 3. Shri V.K. Jain (Adv.) appearing on behalf of the appellant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fraud, willful suppression and mis-statement is involved with intention to evade duty. v) That as the credit of differential CVD paid was admissible under Rule 9(1)(c) of CENVAT Credit Rules, 2004, no penalty/interest is attracted against the appellant in these proceedings. vi) Regarding time bar, it was argued that as per their letter dt.27.12.1999 and 17.02.1997 appellant filed the required declarations under Rule 57(5)(7) of CENVAT Credit Rules, 2004 as per CBEC Circular N.88/88/94-CX, dt.26.12.1994. That the amount of credits taken with respect to capital goods were also duly reflected in the periodical returns filed with the field formation. It was thus argued that as per Apex Court s Order in the case of CCE Vs Champher Drugs Liniments [1989 (40) ELT 276 (SC)], extended period is not applicable. Appellants Advocate made the Bench go through the relevant Paragraph 8 of the said judgment. vii) That as the credit of differential CVD paid was correctly availed, the confiscation and redemption fine was wrongly adjudicated by the adjudicating authority. 4. Shri S.K. Mall, (A.R.) appearing on behalf of the Revenue during the course of hearing and vide written submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999 for assessment. The assessment was completed and TR-6 challans were prepared between 18.02.1999 to 23.02.1999. The rate of CVD applicable at the time of assessment was 10% ad valerom. As per the Union Budget presented on 27.02.1999, the duty structure on impugned capital goods under project imports was increased from only 10 CVD to 5% Basic Customs Duty + 10% of Customs Duty as surcharge + 10% CVD. The cheques provided by the appellant could be encashed only on 17.03.1999, due to insufficient balance in appellant s bank account, when higher rate of duty was applicable after the Union Budget presented on 27.02.1999. CVD initially paid @ 10% was Rs.60,03,13,422/-. Though there was no change in the rate of duty of CVD under Budget presented on 27.02.1999 but due to imposition of 5% Basic Customs Duty + 10% Surcharge on Basic Customs Duty, CVD element got enhanced to Rs.3,15,85,715/- as a result of case earlier made by DRI against the appellant which culminated in the final order passed by the Apex Court. This differential duty was also paid in 1999. In November 2007, after the refinery of the appellant commenced production, CENVAT Credit of 50% of CVD paid with respect to both R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me recoverable from the manufacturer or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the Excise Act, or of the Customs Act, 1962 (52 of 1962) or the rules made there under with intent to evade payment of duty. Explanation.- For 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 (c) a bill of entry; or (d) a certificate issued by an appraiser of customs in respect of goods imported through a Foreign Post Office; or (e)a challan evidencing payment of service tax by the person liable to pay service tax under sub-clauses (iii), (iv), (v) and (vii) of clause (d) of sub-rule (1) of rule (2) of the Service Tax Rules, 1994; or (f) an invoice, a bill or challan issued by a provider of input service on or after the 10th day of, September, 2004; or (g) an invoice, bill or challan issued by an input service distributor under rule 4A of the Service Tax Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible. Explanation. - For the purposes of this rule, first stage dealer and second stage dealer shall have the meanings assigned to them in CENVAT Credit Rules, 2002. A combined reading of Rule 11 (3), Rule 11 (7) of Central Excise Rules 2002 and Rule 9 (a)(ii) of the CENVAT Credit Rules, 2004 will convey that in case of sale of imported goods by a first stage dealer or second stage dealer also the credit is admissible on the basis of such a sale invoice. A similar situation will exist for supplementary invoice issued by a first stage dealer/second stage dealer under Rule 9 (1) (b) of CENVAT Credit Rules, 2004. The word Challan and any other similar document evidencing payment of additional CVD, mentioned in Explanation to Rule 9 (1)(B), will thus mean those situations where duty is paid under a challan by an importer/dealer of imported goods who has sold the cenvatable goods. This provision relating to issue of supplementary invoice will not be applicable to the goods imported by the appellant which are not sold. This interpretation has been upheld by Karnataka High Court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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