TMI Blog2014 (3) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that appellants are liable to penalties under Cenvat Credit Rules, 2004 for removing the cenvatable inputs without reversing the corresponding cenvat credit at the time of removal of inputs as such - Matter remanded for de-novo consideration - Decided partly in favour of assessee. - Appeal No. : E/500-505/2012 - ORDER No. A/10297-10302/2014 - Dated:- 27-2-2014 - Mr. M.V. Ravindran and Mr. H.K. Thakur, JJ. For the Appellant : Shri Anand Nainawati, Advocate For the Respondent : Shri Sivakumar, A.R. JUDGEMENT Per : Mr. H.K. Thakur; These appeals have been filed by the appellants against OIO No. 03-06/MP/VAPI/2012 dated 31.01.2012 issued on 29.02.2012. Appellant M/s. Standard Grease, Village - Khadoli, Silvassa (SGS for short) are engaged in the manufacture of Petroleum, Lubricating grease, Lubricating preparations etc. falling under Chapter 27 and 34 of the first schedule to the Central Excise Tariff Act, 1985. Adjacent to the factory of SGS there is another factory of second appellant M/s. Standard Oil and Grease (SOG for short) which is also engaged in manufacture of same products as made by SGS. Another factory M/s. Tarapur Grease India Pvt. Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriated. An amount of Rs. 53,21,904/- was confirmed against appellant TGIPL, out of the amounts/ issues raised in the show cause notice dated 17.05.2010 issued to TGIPL along with interest and penalties. However, remaining were also dropped by the Adjudicating authority against TGIPL. Cash amount of Rs. 30,62,500/- seized from the residence of Shri Bharat Vyas, Director/ Partner of the appellants was confiscated under Section 121 of the Customs Act, 1962 read with Section 12 of the Central Excise Act, 1944. Personal penalties were also imposed upon the other appellants under Rule 26 of the Central Excise Rules, 2002. 3. Shri Anand Nainawati, Advocate appearing on behalf of the appellant made the following submissions during the course of hearing as well as through the written submissions made in these proceedings:- (a) That the quantity of inputs/ raw materials on which credit was taken were cleared by the appellants only to their sister concerns who were also entitled to the cenvat credit. It was his case that the entire situation is Revenue neutral as no allegation has been made by the department that any quantity of inputs/ raw materials so exchanged has been diverte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at simply not being able to reconcile a cash at the time of search and seizure does not mean that the same represent sale proceeds of clandestinely removed inputs/ finished goods. Learned advocate relied upon the case law of Pandit D.P. Sharma vs. CCE [2001 (137) ELT 692 (T)], to highlight that onus to prove clandestine sales lies on the Revenue which has not been discharged; that this order of the Tribunal were upheld by the Supreme Court as reported at [2003 (157) ELT A201 (S.C.)]. That there is no admission by any person of the appellant s that the cash seized on 22.05.2007 represented sale proceeds of inputs/ finished goods alleged to have been cleared by the appellants. That cash seized in 2007 cannot be considered to be the sale proceeds of removals done in 2005-06 unless established by the Revenue. (d) That once on merits the issue stands in favour of the appellant then there is no question of imposition of penalties upon the appellants as per Rules 25, 26 of the Central Excise Rules, 2002 or Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 4. Shri K. Sivakumar (AR) appearing on behalf of the Revenue argued that there is no co-relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of charging central excise duty can be done away with simply on the ground of revenue neutrality? The above questions of law were answered in Para 4 as follows and accordingly appeal of the Revenue was rejected - 4. The aforesaid findings of facts are not disputed. The grievance was that the aspect of undervaluation has not been considered by the Tribunal at all. Grievance would have merited acceptance if the ultimate exercise would have benefited the Revenue by collection of duty in the coffers of the exchequer. In the facts of the present case, admittedly no such benefit accrues to the exchequer. In the circumstances, if the Tribunal has chosen not to determine an academic issue, it is not possible to state that any legal infirmity exists in the impugned order of the Tribunal. 5.2 The tanker register maintained by M/s. S.G. Transport and the statements of transporters does not indicate that the inputs have been delivered at places other than the factories of the appellants. There is no other evidence on record to suggest that inputs cleared by appellants as such without reversal of equivalent credit were seized elsewhere. It is difficult to appreciate as to what benefi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore consequences of payment of excise duty after availing Modvat credit was revenue neutral. 7. In view of the stand taken by the assessee in the counter-affidavit and the statement made by the learned counsel for the assessee, the appeals are dismissed leaving the question of law open. However, there shall be no order as to costs. 8. If upon verification, the submission of the counsel for the assessee is found to be incorrect, liberty is granted to the appellant-Revenue to mention the matter before this Court. In view of the above settled law, the appeals of the appellants on Revenue neutrality are required to be allowed as there is no evidence on records that inputs on which credit was taken have been directed elsewhere without reversal of cenvat credit taken. 6. So far as confiscation of cash of Rs. 30,62,500/- is concerned, it is observed that appellant did produce the records before the adjudicating authority to justify that the cash recovered from the residential premises of Shri Bharat Vyas was reflected in the cash book of the appellants and other firms. If the evidence produced by the appellants were not acceptable then the same could have been cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by setting aside the confiscation. 7. So far as clandestine removal of finished goods involving Central Excise duty of Rs. 36,18,970/- is concerned, Adjudicating authority has given one Para findings in Para 68 of the adjudication order to hold that the same is recoverable as no defence has been submitted by the appellants in this regard. The duty calculations are based upon the worksheets and statement of Shri Sanjay Mishra, Central Excise Manager of the appellants [Annexure 1-B (SOG) and Annexure II-B (SOG)]. There is no evidence brought on record in the form of seizure of finished excisable goods in transit or at the place of the buyers. There is also no statement of the buyers confirming that they have received any finished excisable goods from the appellants without payment of duty or that payments were received by SOG in cash. Cross examination of certain persons including Shri Sanjay Mishra (SOG) was requested as per Para 58 of the order-in-original was asked by the appellants. There is no order on the request of the appellants for cross-examination. 7.1 It has been argued by the advocate of the appellant that as per Para 1.1 to 1, 10 and pages J-1 to J-4 of their re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
