9911796707
TMI Blog2014 (7) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... t various inputs and partially processed inputs to M/s Nirayu and M/s Paushak which are their sister concern on returnable gate pass. Further M/s Nirayu had issued invoice for duty amounting to Rs. 13,50,294/- for Platinum material cleared to M/s Darshak Ltd in the past and M/s Darshak availed credit of the same. M/s Darshak was issued show cause notice dt.28.10.2002 proposing demand of duty of Rs. 34,77,285/- on clearance of input as such alleging that the said inputs were not received back by M/s Darshak. It was also proposed to recover cenvat credit amounting to Rs. 8,80,184/- on clearances of input as such for job work not received back by said M/s Darshak. A duty of Rs. 13,50,294/- was further proposed to recover on account of wrong availment of cenvat credit alleging that the said goods were not received by M/s Darshak. It was proposed to appropriate the amounts paid by M/s Darshak against the demand. Penalties were also proposed against M/s Darshak in terms of Section 11AC of the Central Excise Act, 1944 readwith Rule 173Q and Rule 57I/57AH of Central Excise Rules, 1944 and Rule 25 of the Central Excise Rules (No.2), 2001 & Rule 13 (2) of the Cenvat Credit Rules, 2001. Furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/2002. 3.5 Aggrieved with the orders dt.25.06.2004 both the Appellants filed appeal before the Tribunal who vide order 12.07.2005 in respect of M/s Darshak Ltd. confirmed demand of Rs. 50,03,165/-, however allowed credit of such duty to the recipient units namely M/s Nirayu and M/s Paushak in respect of inputs received by them. The Tribunal also ruled that the penalty of Rs. 50,03,165/- imposed upon M/s Darshak and of Rs. 1,00,000/- each imposed upon M/s Nirayu and M/s Paushak are unduly harsh in view of the fact that removal of duty paid inputs are accounted for in the private records of the concerned units though not in accordance with the rules. The Tribunal considering the clearance of the goods in contravention of rules thus reduced the penalty amount of M/s Darshak to Rs. 2,00,000/- and on M/s Nirayu and M/s Paushak on Rs. 20,000/- each. 3.6 In respect of case related to M/s Nirayu, the Tribunal while upholding demand also allowed credit of such duty to the recipient units. The Tribunal also ruled that the penalty of Rs. 1,20,99,486/- imposed upon M/s Nirayu and of Rs. 1,00,000/- each imposed upon M/s Darshak, M/s Alembic are excessive and considering the clearance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) Section 37 of the Central Excise Act does not vest any power to levy interest in case of denial of modvat credit. c) Whatever payment made by the applicants as duty earned as credit simultaneously and immediately by the receiving units of M/s Alembic group and hence the entire exercise is a revenue neutral one. d) Interest is an appendage or an accessory to the principal w.e.f. 01/04/2000, as per the amended rules 57AC manufacturer has to pay an amount equal to the duty leviable on the inputs. Inasmuch as what has paid is neither duty nor Cenvat Credit, the question of charging interest on such amount under 11AB does not arise. 3.12 The Tribunal vide order dt.22.10.2007 did not find merit in application for modification of stay, however allowed the applications for introduction of additional grounds. 3.13 Vide Order No. M/1112-1113/WZB/AHD/2008 dt.10.10.2008 the issue was referred to the Larger Bench for reference as to whether the interest on duty/cenvat credit demanded by applying proviso to section 11 A or Section 11A read with Cenvat Credit Rules, or under Rule 57 I is payable und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from them: i) CC. EX. & CUS., VAD. Vs. INDEOS ABS LTD. 2010 (254) E.L.T. 628 (Guj.) ii) CCE, CHENNAI Vs. S & S POWER SWITCHGEAR LTD.2009 (247) E.L.T. 374 (Tri. - Chennai) iii) HIND. ZINC LTD. Vs.CCE, JAIPUR-II 2008 (232) E.L.T. 687 (Tri. - Del.) iv) CCEX., PUNE Vs. COCA-COLA INDIA PVT. LTD. 2007 (213) E.L.T. 490 (S.C.) 5. Ld. Advocate further submits that since the issue is revenue neutral and the Tribunal did not find it a case to be of fraud, collusion, wilful mis-statement, or suppression of fact or contravention with intent to evade payment of duty, therefore even if any interest under Section 11AB is leviable, the same can be levied only in respect of clearances effected after 11.05.2001 and not for the clearances effected before 11.05.2001 as held by the Hon'ble High Court of Gujarat in case of CC. EX. & CUS., DAMAN Vs. NIRMALA DYECHEM 2012 (281) E.L.T. 677 (Guj.). The Ld. Counsel also without prejudice to his other submissions submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of PUNJAB TRACTORS LTD. Vs. CCE, CHANDIGARH 2005 (181) E.L.T. 380 (S.C.) and seeks to draw parallel between the facts of the said case and the present issue. He states that the Hon'ble Apex Court considering the situation of revenue neutrality imposed penalty under Rule 173 Q of erstwhile Central Excise Rules, 1944 and Rule 25 of Central Excise Rules 2002 and therefore the imposition of penalty in the present case by the Tribunal cannot be inferred as imposition due to any fraud or willful intention to evade payment of duty. 7. It is his submission that the reference answered by the Hon'ble Larger Bench is not related/ applicable in the facts of the present case as the Larger Bench's order is related to issue as to whether in cases involving fraud, collusion, suppression or mis-statement the liability under section 11AB for interest gets wiped out after 11.05.2001. That the Hon'ble Larger Bench held that in such nature of cases the liability arises even after 11.05.2001 and that even in the cases not involving fraud, collusion or misstatement etc. the Section 11AB shall be applicable after 11.05.2001. He submits that the present case stands on different footing as though the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the case to be of contravention of rules and holding the penalties to be too harsh in view of the fact that the entries of clearances were recorded in the private records of the Appellant reduced the penalties. The Tribunal in subsequent order dt.22.10.2007 also admitted the additional grounds introduced in the Appeal for ascertaining the revenue neutrality. On consideration of the above facts we find that as the Tribunal in its order dt.12.07.2005 had allowed the credit of the duty paid by the Appellants to the recipients units which are sister concern of the Appellants, we are of the view that the whole issue becomes revenue neutral and in such cases there is no reason to hold the non-payment of duty can be attributed to any fraud, collusion or willful mis-statement. Our views are based upon the judgment of Hon'ble Supreme Court in the case of M/s Coca Cola India Pvt. Ltd. 2007 (213) ELT 490 (SC) and Hon'ble Gujarat High Court's judgment in the case of M/s Indeo ABS Ltd. 2010 (254) ELT 628 (GUJ) on a similar issue the Hon'ble Court did not find it fit to demand duty and waived interest and penalties . Further we are also fortified in our view with the orders passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
