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M/s Kalpena Industries, Shri Narendra Surana, Shri Prakash Sahoo And Shri Manoj Jain Versus Commissioner, Central Excise & Service Tax, Vapi

2015 (10) TMI 2345 - CESTAT AHMEDABAD

Cenvat Credit - Storage of input outside the factory - Removal of goods without necessary permission under Rule 8 of CENVAT Credit Rules 2004 - delivery of the letter written by the Appellant has been questioned by the Department - Confiscation and penalty - Held that:- Inputs were cleared without necessary permission and without reversal of appropriate amount of CENVAT Credit as undertaken by the Appellant. As per the provisions of CENVAT Credit Rules 2004, when the inputs are cleared as such f .....

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#8377; 1 lakh.

In case, the entire quantity of inputs were used in the manufacture of finished goods or cleared as such on payment of duty, then the question of imposing penalty under Section 11AC of Central Excise Act, 1944 read with Rule 15 of CENVAT Credit Rules will not arise, except for payment of interest on CENVAT involved from the date of clearance of inputs from the factory till they are used in the manufacture of finished goods or cleared as such on discharge of appropriate .....

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- Decided partly in favor of assessee. - Appeal No.E/1323-1326/2011-SM - Order No.A/ 11098-11101/2015 - Dated:- 23-7-2015 - Mr. H.K. Thakur, Member (Technical) For the Petitioner : Shri Rahul Gajera, Advocate For the Respondent: Shri L. Patra, Authorised Representative ORDER Per: H.K. Thakur These appeals have been directed against OIO No.18/MP/VAPI/2011, d.25.08.2011 issued on 02.09.2011. Appeal No.E/1323/2011 has been filed by the main Appellant M/s Kalpena Industries Ltd, Silvassa. The other .....

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Excise visited the factory premises of the Appellant on 03.02.2010/04.02.2010 and conducted verification of the stock lying in the factory including stock lying in the nearby premises outside the declared godown. That 52,075.00 kgs of various inputs, valued at ₹ 30,71,202.00 were found to have been stored in godown situated outside the factory without obtaining necessary permission from the jurisdictional Central Excise Assistant Commissioner/Deputy Commissioner under CENVAT Credit Rules a .....

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.00 was imposed which was recovered by enforcing the Bank Guarantee. That CENVAT Credit of ₹ 4,44,626.00 pertaining to the seized inputs was also confirmed, alongwith interest and equivalent penalty was also imposed upon the main Appellant. 2.1 Learned Advocate argued that before storage of inputs in the adjoining godown, a letter dt.18.07.2007 was written by the main Appellant to the Assistant Commissioner, Silvassa regarding storage of inputs outside the factory and sought permission und .....

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and CENVAT Credit disallowed and penalties imposed are required to be set aside. He relied upon the case law of Sanchit Polymers Vs CCE & C, Daman [2009 (241) ELT 240 (Tri-Ahmd)] to argue that under similar circumstances, it has been held that confiscation of inputs was not justified and penalties imposed were set aside. 3. Shri L. Patra, (AR) appearing on behalf of the Revenue argued that it is not disputed by the Appellants that the inputs were cleared without getting necessary permission .....

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r movement of inputs from their factory to the temporary storage godown. It was also argued that in the original letter dt.18.07.2007, no address of the storage place outside the factory was provided. That in the reminder dt.01.04.2008, only addresses were given and one of the addresses belonged to another factory of the Appellant mentioned by Adjudicating authority in Para 63.2 of Order-in-Original, dt.25.08.2011. That photocopy of the letter of intimation provided by the Appellant does not bea .....

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Department by letters dt.18.07.2007 and 01.04.2008 for granting permission under Rule 8 of CENVAT Credit Rules 2004. It is not disputed by the Appellant that inputs on which CENVAT Credit was taken, were removed from the factory premises without necessary permission required under Rule 8 of CENVAT Credit Rules 2004. It is also observed from the case records and arguments made by either sides that delivery of the letter written by the Appellant has been questioned by the Department. Further, it i .....

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f the Order-in-Original that no records/documents/registers were being maintained by the Appellant at the said godown as per the undertaking given by the Appellant in their letter dt.18.07.2007. No ultimatum appear to have been given by the Appellant to the Department that in case the permission is not granted, then they will start moving the inputs from the factory premises to such godown situated outside the factory. Irrespective of the arguments taken by the Appellant, the fact remains that s .....

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, such inputs are liable to confiscation. Accordingly, the order of confiscation made by the Adjudicating authority is proper and cannot be faulted with. However, it is observed that a redemption fine of ₹ 6,67,,800.00 has been imposed by way of enforcing the Bank Guarantee executed by the Appellant at the time of provisional release of the seized inputs. Total CENVAT Credit on the goods stored outside the factory premises has been calculated to ₹ 4,44,626.00. Keeping in mind the CEN .....

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