TMI Blog2012 (1) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by authorities below vide which Cenvat credit of ₹ 21,69,668/- stands denied to the appellant along with imposition of penalty of identical amount. In addition penalty stands imposed upon the other two appellants authorized signatory of the unit and director of the company. 2. We have heard Shri Vishal Agarwal, learned C.A., for the appellants, he submits that in identical set of facts and circumstances, this Tribunal in the case of Sterlite Telelink Ltd. v. C.C.E., Vapi, reported in 2007 (218) E.L.T. 419 (Tri.-Ahmd.) has held in favour of the appellant, on the point of limitation. Elaborating on the arguments, Shri Vishal Agarwal, learned C.A. submits that M/s. Sterlite Optical Technologies Ltd. is a company engaged in the manufacture of optical fiber. They had earlier cleared the said goods to an independent buyer, who rejected the same and returned to the manufacturer. The same were rectified and cleared subsequently to the appellant on payment of duty in terms of Section 4 of the Central Excise Act, 1944. It so happened that the assessable value and the consequent payment of duty originally paid by the appellant and of which they had taken the credit at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Such invocation requires the presence of a guilty mind and a fraud, suppression or misstatement with an intention to evade duty. As such we are of the view that the demand now being raised against the appellants is barred by limitation and is required to be set aside on this ground alone. We accordingly set aside the impugned order confirming duty and imposing penalty on all the appellants and allow the appeals with consequential relief to them. (Pronounced in Court on _____________) Sd/- (Archana Wadhwa) Member (Judicial) 6 . [Per : B.S.V. Murthy, Member (T)]. - I have gone through the order proposed by learned Member (Judicial). Since I am unable to agree with the order proposed, I record a separate order. 7. The facts of the case in brief are that the appellants has availed Cenvat credit amounting to ₹ 21,69,668/- on the strength of supplementary invoice No. 1199, dated 5-12-2001 issued by M/s. Sterlite Optical Technologies Ltd., E-l E-2, MIDC Industrial Area, Waluj in RG-23A Part II Entry No. 38/625 dated 27-12-2001. Their Waluj unit has issued the above supplementary invoice No. 1199, dated 5-12-2001 on payment of differential duty which was det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtract of RG-23 Part II is not sufficient and also suppression has been rightly invoked in this case and the demand is within limitation. 10. I find that the decision of the Tribunal in M/s. Sterlite Telecables Ltd. relied upon by the learned Chartered Accountant is not of any help to him. For reaching the conclusion that the demand was time barred, the relevant observations are in Para 5 of the decision cited above, which is reproduced below: 5. After appreciating the submissions from both sides, I find that firstly payment of short duty by the manufacturer of the goods while clearing the same cannot be attributed to any suppression, mis-statement or fraud on their part. It is all a matter of record that the returned goods were entered in their statutory records and credit of duty paid originally was taken. Subsequently, duty was paid in terms of Section 4, which was quantified on the lower side. As such in my views, it is a case of interpretation of the provisions of law and is not a case of any clandestine activities reflected on the part of the manufacturer, so as to deny the Modvat Credit of duty paid by the manufacturer on the basis of supplementary invoices. In any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now about the irregular credit availed by the appellant on 13-9-2002 and therefore the show cause notice could have been issued within one year. He also submitted that credit was taken by them on a bona fide belief and therefore the suppression of facts cannot be allowed. It is also his contention that the appellant was not a part to any suppression or fraud. It is relevant to note the Rule 7(1)(b) as it existed in the statute book at the time of issue of show cause notice. Rule 7(1) - The Cenvat credit shall be taken by the manufacturer on the basis of the following documents, namely - (b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or importer or from any other premises from where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty of customs leviable under Section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the same has been issued in respect of differential duty paid and there is no offence on the part of the inputs supplier because of which he had to pay the differential duty. 14. It has also been pleaded that the appellants were ignorant of the fact that differential duty was paid by the supplying unit after a visit by the preventive officers and subsequently the same was confirmed invoking extended period. Learned SDR cited several decisions of the Tribunal in support of his contention that ignorance of law is not an excuse and consequences as per law would follow. I find that these decisions relevant and accordingly the citations are given below : (i) M/s. Rakesh Kanungo (P) Ltd. v. C.C.E., Mumbai - 2004 (178) E.L.T. 1061 (Tri.-Mumbai) (ii) M/s. Jeco Industries v. C.C.E., Calcutta-I - 2002 (141) E.L.T. 358 (Tri.-Kolkata) (iii) C.C.E., Rohtak v. M/s. Bindal Cotex (P) Ltd. - 2004 (165) E.L.T. 298 (Tri.-Del.). In any case, in view of the specific legal obligation cast on the appellant and failure to fulfil the same on the part of the appellants in view of the fact that the supplier unit is a sister unit of the appellant, I consider that the extended p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Dhanesh Auto Electricals Ltd. v. C.C.E., Aurangabad - 2007 (215) E.L.T. 122 (T-Mumbai), cited by the learned SDR relevant to the present case. Para 4 5 of the order is relevant and are reproduced below : 4. The appellants have also assailed the demand on the point of limitation by submitting that the fact of clearance of capital goods in July, 2001 and January, 2002 was informed to the revenue inasmuch as the said transactions were recorded in ER-1 returns of the respective months. Similarly, the credit entries for Cenvat credit were also recorded in the Cenvat accounts and mentioned in the monthly Cenvat credit statements. As such, it is their contention that the entire facts were disclosed to the revenue. However, I find that though the same were filed, the appellants, on the basis of simple interpretation of Rule 4, were not entitled to the credit. No advice was sought by them from the revenue. This fact was also not brought to the notice of revenue independently. What the appellant is contending is to the effect that the revenue should have compared the ER-1 returns of the month of July, 2001 and January, 2002 with the subsequent Cenvat credit accounts and should have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty has already been imposed upon the appellant company, only nominal penalty on the other two appellants would be sufficient under the circumstances. Accordingly, I order that penalty on Shri T.V. Baburaman, authorized signatory and Shri Anand Agarwal, Director be reduced to ₹ 5,000/- (Rupees Five Thousands only) each. Sd/- (B.S.V. Murthy) Member (Technical) DIFFERENCE OF OPINION Whether all the appeals are to be allowed as held by Member (Judicial) or the appeal filed by the Company has to be rejected and the appeals filed by other two appellants have to be decided by reducing the penalty to ₹ 5,000/- each as held by Member (Technical). Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) 19 . [Per : B.S.V. Murthy, Member (T)]. - Vide order No. M/562-564/WZB/AHD/09, dated 22-4-2009, difference of opinion was recorded as under : Whether all the appeals are to be allowed as held by Member (Judicial) or the appeal filed by the Company has to be rejected and the appeals filed by other two appellants have to be decided by reducing the penalty to ₹ 5,000/- each as held by Member (Technical) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Member (Judicial). Sd/- (B.S.V. Murthy) Member (Technical) Sd/- (Archana Wadhwa) Member (Judicial) (Pronounced in Court on 17-9-2010) 22 . [Per : M.V. Ravindran, Member (J)]. - This Difference of Opinion is listed before me as per orders of Hon ble President for deciding the points of difference arose between the Bench while deciding the appeals No. E/1292 to 1294/2006. 23. The Difference of Opinion, which has been referred to me are as follows : (i) Whether the Show Cause Notice issued on 22-9-2004 has to be held as time barred as held by ld. Member (Judicial) or invocation of extended period in this case was in accordance with the law as held by ld. Member (Technical). (ii) Whether the fact that Rule 7(l)(b) as it existed in the statute book at the time of issue of Show Cause Notice can be invoked for considering applicability of extended period in the facts and circumstances of the case as held by ld. Member (Technical) or not. (iii) Can it be said that the observations of Commissioner (Appeals) in Para 6 of his order can be said to have held the contravention on the part of the appellants on account of ignorance of law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity as well as first appellate authority did not agree with the contentions of the appellant. He would draw my attention to the provisions of Cenvat Credit Rules, 2002 and submit that the appellant had filed Cenvat returns to the authorities in time. He would also submit that the supplementary instructions given by the authorities in respect of scrutiny of assessment will clearly indicate that the lower authorities should scrutinise RT-12 returns submitted by the assessee and he would draw my attention to said procedure. He would submit that there was no reason for them to hold that the Cenvat credit availed by them was incorrect. It is his submission that there was no requirement of declaration of any kind in the monthly returns regarding availment of Cenvat credit of the duty paid on supplementary invoice. Hence, there was no suppression and there cannot be any wilful mis-statement to evade payment of duty. He would rely upon the judgment of Hon ble High Court of Gujarat in the case of Prolite Engineering Co. v. UOI - 1995 (75) E.L.T. 257 (Guj.), Gopal Jarda Udyog v. C.C.E. - 2005 (188) E.L.T. 251 (S.C.), CIT, Calcutta v. Burlop Dealers Ltd. - (1971) 1 SCC 462, Essel Propack Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 27. There is no dispute that the appellant herein availed Cenvat credit of ₹ 21,69,668/- based upon the supplementary invoice No. 1199, dated 5-12-2001 raised by the supplier, incidentally sister concern of the appellant. It is also on record and undisputed that the appellant herein had filed monthly ER-1 return for Feb. 2001 to authorities in time. At this juncture, I have to refer to the Supplementary Instructions of C.B.E. C. and more specifically Chapter VI which relates to scrutiny of the assessment. I am reproducing the same below : Part VI SCRUTINY OF ASSESSMENT 1. Introduction 1.1 In view of the self-assessment procedure wherein the assessee himself assesses the duty liability the responsibility of the departmental officers is to scrutinise the assessment made for verification of its correctness. 2. Scrutiny of Assessment 2.1 The Central Excise officers having jurisdiction over the factory/premises of the assessee is responsible for the scrutiny of returns. For this purpose, the said officer(s) may require the relevant documents. Though the statutory records have been dispensed with, the assessee is required to maintain private records co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aman, Authorised Signatory of the appellant under Section 14 of Central Excise Act, 1944. On reading of the said statement, I find that Shri Baburaman has categorically stated that they were not aware of the circumstances under which the supplementary invoice No. 1199, dated 5-12-2001 was issued by their sister concern from Aurangabad. On the basis of said statement, show cause notice which was issued to the current appellant, had alleged as under : It appears that the Silvassa unit was fully aware of the fact that their Aurangabad unit had raised supplementary invoice No. 1199, dated 5-12-2001 after the Central Excise Preventive officers of Aurangabad (HQrs) pointed out short payment of duty on goods that were earlier supplied to their unit, and they had taken Cenvat credit on supplementary invoices issued by their Aurangabad unit for differential duty paid by Aurangabad unit. The Silvassa unit had also not informed the department before or after taking such Cenvat credit of ₹ 21,69,668/- on the basis of the said supplementary invoices. Such type of act is nothing but suppression of true facts from the Department by the unit with intent wrongly avail the Cenvat credit an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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