TMI Blog2014 (9) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... visaged filing of declaration, maintenance of records showing receipt of the goods, consumption of goods for manufacture, filing of returns indicating the amount of duty paid through the credit account and other statutory requirements. When none of these requirements have been complied with by the appellant, we do not understand how he can claim the benefit of Modvat Credit. In view of the above legal and factual position, we are of the considered view that the appellant is not eligible for the benefit of Modvat Credit on the inputs used in the manufacture of pipes which was manufactured and cleared by them clandestinely, without payment of duty. Whether the appellant is liable to penalty under Section 11AC of the Central Excise Act especially when the said provision came into the statute book only with effect from 28-9-1996 - In the show cause notice the proposal is for imposition of penalties under Section 11AC read with Rule 173Q of the Central Excise Rules, 1944. Rule 173Q as stood at the material point of time provided for imposition of penalty up to five times the value of the goods clandestinely removed. However, in the impugned order penalty has been sought to be imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as cum tax and the appellant should have been given the benefit of Modvat Credit scheme under which input duty credit was available on the inputs consumed in the manufacture of goods cleared by the appellant. The learned appellate authority, after considering the contentions made by the appellant, held that abatement towards sales tax payable is permissible as deduction and accordingly allowed an abatement of ₹ 4,29,891/- being the sales tax amount payable. As regards the claim of the appellant for grant of Modvat Credit, he came to the conclusion that inasmuch as the appellant did not follow the statutory procedures prescribed for availment of Cenvat Credit, the said benefit is not available. Accordingly he dismissed the claim. On the basis of the above, the lower appellate authority held that after allowing the abatement on sales tax, the remaining Central Excise duty is required to be recovered from the appellant and also imposed an equivalent penalty. He also held that on the recomputed duty liability, interest is also liable to be recovered from the appellant. Aggrieved of the same, the appellant is before us. 3. The learned Counsel for the appellant made the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that originally the duty was calculated as ₹ 10,74,667/- but after considering the transportation it was reduced to ₹ 9,89,222/-. Similarly, the appellate authority has also granted abatement towards the sales tax payable in the impugned order. 4.1 As regards the cum-tax benefit availed by the appellant, the learned Additional Commissioner (AR) relied on the decision of the Apex Court in the case of Amrit Agro Industries Ltd. v. CCE, Ghaziabad - 2007 (210) E.L.T. 183 (S.C.) and CCE v. Bata India Ltd. - 1996 (84) E.L.T. 164 (S.C.) wherein the Hon ble Apex Court held that excise duty is excludible under Section 4(4)(d)(ii) of the Central Excise Act, 1994 only when price of the goods includes the amount of excise duty payable. In the present case there is no evidence on record to show that the prices charged by the appellant from the buyers was inclusive of excise duty and therefore, in the absence of any such evidence, the benefit of cum duty price cannot be extended to the appellant. 4.2 As regards the claim for the benefit of Modvat Credit, the learned Additional Commissioner (AR) reiterates the findings of the lower authorities and contends that inasmuch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent. In such a transaction, it is the seller who takes on the obligation of paying all taxes on the goods sold and in such a case, the said taxes on the goods sold are to be deducted under Section 4(4)(d)(ii) and this is precisely what has been directed by the Tribunal. There is also nothing to show that the sale price was not cum-duty. Similarly, in the case of Supreme Fabrics Ltd., the issue was whether excise duty was payable on loading charges which the appellant had claimed as abatement while computing the taxable value. In that context, the Hon'ble Apex Court held that loading charges form part of assessable value and excise duty would be leviable and the loading charges so collected should be treated as cum-duty tax. In Srichakra Tyres Ltd. case, the facts of the case were that the appellant cleared tyres on the sale price declared by them. Later on price revisions were effected upwards but they did not discharge the additional duty liability on the enhanced prices collected from the customers. In the context of duty demand on the enhanced price, that is, the revised price collected minus the original price on which the duty was raised, the question of cum-dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the benefit is not followed. In the present case, the Modvat scheme as it stood at the relevant time envisaged filing of declaration, maintenance of records showing receipt of the goods, consumption of goods for manufacture, filing of returns indicating the amount of duty paid through the credit account and other statutory requirements. When none of these requirements have been complied with by the appellant, we do not understand how he can claim the benefit of Modvat Credit. In view of the above legal and factual position, we are of the considered view that the appellant is not eligible for the benefit of Modvat Credit on the inputs used in the manufacture of pipes which was manufactured and cleared by them clandestinely, without payment of duty. 5.4 The last question for consideration is whether the appellant is liable to penalty under Section 11AC of the Central Excise Act especially when the said provision came into the statute book only with effect from 28-9-1996. In the show cause notice the proposal is for imposition of penalties under Section 11AC read with Rule 173Q of the Central Excise Rules, 1944. Rule 173Q as stood at the material point of time provided for impos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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