9911796707
TMI Blog2016 (4) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case, in brief, are narrated below: (i) M/s Garden Silk Mills Ltd, a public Limited company (hereinafter referred to as 'the Company'), is engaged in the manufacture of Partially Oriented Polyester Yarn (POY) classifiable under CH 54 of the Schedule to the Central Excise Tariff Act 1985 through its three different divisions/ factories/units, namely: a) PFY Division: Central Excise Registration No AAACG 8932 CXM002 manufacturing Partially Oriented Polyester Yarn (POY). b) DT Division: Central Excise Registration No AAACG 8932 CXM003 manufacturing Draw Twisted Polyester Filament Yarn (DT), Draw Wound Polyester Filament Yarn, Texturised Polyester Filament Yarn. c) Vareli Unit/Division: Central Excise Registration No AAACG 8932 CXM001 manufacturing Grey MMF, Texturised Yarn, Sized Yarn, Draw Wound Yarn etc. (ii) PFY Division and DT Division are located at Jolwa and have a common boundary wall within the same premises. The Vareli unit is located at a distance of about 4.5 km from Jolwa. The present appeal is filed by PFY Division (hereinafter referred to 'the Assessee'). (iii) By letter dtd 14.7.2003, the Company requested to the Deputy Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal was filed before the Hon'ble Supreme Court and by order dtd 15.3.2010 the appeal of the Revenue was dismissed. (x) As the Revenue challenged the OIA dtd 12.04.2005 of the Commissioner (Appeals), no separate R.C. for the three divisions was granted. Ultimately, after the order of the Hon'ble Gujarat High Court on 23.9.2009 separate R.Cs. were issued to the DT unit and Vareli Unit. Thereafter, the Assessee started to maintain records of PLA/Cenvat account separately as per R.C. issued. (xi) Prior to 23.9.2009 the Assessee was paying duty on the basis of single R.C. as provided to the Assessee and availed Cenvat Credit. According to the Revenue, since 15.4.2005 as the Assessee applied for separate R.C. for the three units, it would be considered that these units are separate three units as on 15.4.2005. Hence, the transfer of cenvat credit from DT unit to the Assessee and utilisation by the Assessee is irregular. Accordingly, four show cause notices were issued proposing demand of cenvat credit related to transfer of cenvat credit from DT unit to the Assessee unit during the period from 15th April, 2005 to 22nd Sept. 2009 and one show cause notice was issued for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. The other argument of the Ld. Sr Advocate is that the Adjudicating Authority proceeded on the basis that the Assessee requested for three separate R.Cs. to avail the benefit of Notification No 29/2004-CE and 30/2004-CE both dtd 9.7.2004 for its DT Division and Vareli division. He submits that separate proceedings were initiated for availing the benefit of exemption Notification, which has no relation with the present proceedings. The Ld Sr. Advocate also contested the demand of duty as barred by limitation. He submits that there is no suppression of fact with intent to evade payment of duty. The Department was well aware the activities of the Assessee and therefore extended period of limitation cannot be invoked. The Ld Senior Advocate submitted Written Submission alongwith compilation of case laws. 5. Shri P.R.V. Ramanan, Ld Special Counsel appearing on behalf of the Revenue submits that by letter dtd 28.7.2004, the Deputy Commissioner of Central Excise had permitted the Assessee to maintain 'a single consolidated Cenvat account/PLA for the purpose of discharging the duties payable for the monthly clearance.' Subsequently, by letter dtd 24.1.2005 withdrew the maintenance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the two factories were one. Thus, the Company conduct is clearly one of 'approbation' and 'reprobation', which in law, is not justifiable. It is submitted that the transfer of Cenvat Credit from DT unit to the Assessee was not in terms of Rules 10 of the Cenvat Credit Rules 2004. 7. The matter was heard at length on 21.1.2016, 28.1.2016 and today i.e., 3.2.2016. The Ld Sr. Advocate, Shri C Harishaker, on behalf of the Assessee and the Ld Special Counsel, Shri P R V Ramanan on behalf of the Revenue argued the matter. The Ld Sr. Advocate submitted Written Submission on 28.1.2016 and additional written submission on 27.1.2016. The Ld Special Counsel submitted Written Submission on 28.1.2016 during the course of hearing and the order is being passed on 3.2.2016. 8. Heard both the sides and perused the records. 9. By the impugned Adjudication Order, the Adjudicating Authority disallowed and ordered recovery of cenvat credit of Rs. 30,19,18,590.00 availed and utilised by the Assessee during the period from 15.4.2005 to September 2009. The Assessee by letter dated 28.2.2005 and 15.4.2005 applied for three separate R.C. for the three divisions/units. The Adjudicating Authority hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rging duties for clearance of goods as held by the Adjudicating Authority on the basis of Application dtd 15.4.2005of the Assessee OR on 23.9/2009 as claimed by the Assessee on the basis of separate R.Cs. were issued to the other units by the Deputy commissioner of Central Excise and whether the transfer credit from D.T. Unit to the Assessee is regular. 12. On perusal of the records, we find that prior to 25.9.2003 three units/divisions of the Company were holding three R.Cs. as mentioned above. By order dated 25.9.2003, the Deputy Commissioner of central Excise as per application of the Assessee allowed merger of DT unit with the Assessee unit and a common R.C. of the Assessee was in operation for discharging duty. Again, at the request of the Assessee, the Deputy Commissioner of central Excise by Order dated 28.7.2004 allowed the merger of Vareli unit with Assessee unit. Thus, on 28.07.2004, these three units were clubbed and the Assessees R.C. was in operation and the R.C. of the other two units were cancelled. The Order dated 28.7.2004 reads as under: F. No. Div.-II/RC/GSM.Div/2002-03 Surat dated 28.07.2004 To, M/s Garden Silk Mills Ltd., Shara Gate, Surat Gentle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods manufactured by Jolwa plant was cleared on payment of duty to Vareli unit, therefore, keeping in mind the above mentioned provisions of law, the maintenance of common PLA and Cenvat Credit Account for both the plants viz. Jolwa and Vareli plants is against the provisions of the Central Excise law. In view of the above, I am directed to inform you the facility of common PLA and Cenvat Account provided to you is hereby withdrawn with immediate effect. However, the common registration will continue for both the Jolwa and Vareli units." The Assessee was aggrieved with the direction of the Deputy Commissioner of Central Excise vide order dated 24.01.2005 and filed appeal before the Commissioner (Appeals). 14. At this stage, the Assessee desired to avail the benefit of exemption notification No 30/2004-UE dated 9.7.2004 as amended by Notification No 10/2005-UE dtd 28.2.2005 and requested to the Deputy Commissioner of Central Excise for separate R.C. for all their three units/divisions. By Order dated 11.3.2005, the Deputy Commissioner of Central Excise rejected the request of the Assessee. So, the Assessee filed another appeal before the Commissioner (Appeals) against rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner vide his letter F.No.Div-II/RG/GSM-Div/2002-03/Part dated 11.03.2005. Against this decision, an appeal was filed before the Commissioner (Appeals). This was decided vide OIA No. VP/181/SRT-I/2005 dated 12.04.2005. In the said order, it has been held that the appellant will be eligible to have separate registrations for their three factories. This decision, if implemented, would have already resulted in separate registrations for the three units and consequentially requiring the maintenance of separate PLA as well as Cenvat Credit Accounts for the different factories. " 17. The Revenue had not implemented the Order dated 12.04.2005 of the Commissioner (Appeals) and filed appeal before the Tribunal. By Order dated 2.5.2008, the Tribunal rejected the appeal filed by the Revenue and directed to issue separate R.Cs. to the three units. The Assessee filed application before the Tribunal directing the Revenue to implement Tribunal Order dated 2.5.2008. By order dated 19.6.2009 the Tribunal directed the Revenue to implement the Order dated 2.5.2008, Then, Revenue filed application before the Tribunal for rectification of mistake in Final Order dated 2.5.2008. By order dated 25.8.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CISE REGISTRATION CERTIFICATE [Under Rule 9 of the Central Excise Rules, 2002] This is to certify, subject to conditions specified below, that M/S GARDEN SILK MILLS LIMITED (DT DIVISION), A REGISTERED COMPANY (Registrant and its constitutions) is registered for operating as a MANUFACTURE OF EXCISABLE GOOODS at JOWVA, TAL. PALSANA, SURAT-394315 GUJARAT (address of the business premises) on the basis of the application dated 28.02.2005. Registration Number is : AAACG8932CXM007 As per CESTAT Order No. M/1057/WZB/AHD/09, dt. 25.08.2009. Date: 23.09.2009 Place: Division-II, Surat-I Sd/- Signature of the Deputy Commissioner of Central Excise (With Name and Official Seal)" (B) R.C. of VARELI Division: "FORM RC CENTRAL EXCISE REGISTRATION CERTIFICATE [Under Rule 9 of the Central Excise Rules, 2002] This is to certify, subject to conditions specified below, that M/S GARDEN SILK MILLS LIMITED (DT DIVISION), A REGISTERED COMPANY (Registrant and its constitutions) is registered for operating as a MANUFACTURE OF EXCISABLE GOOODS at VARELI, TAL. KADODARA, SURAT-394327 GUJARAT (address of the business premises) on the basis of the application dated 28.02.2005. Reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of separate PLA/Cenvat Account would arise only after implementation of the earlier Order (Appeal) dated 12.4.2005 to issue separate R.Cs. for three units. Revenue had not filed appeal against the Order dated 31.8.2005 of the Commissioner (Appeal). Perhaps, the earlier order dated 12.4.2005 of the commissioner (Appeal) was appealed before the Tribunal by the Revenue. In our considered view, Commissioner (Appeal) rightly held that after issuance of separate R.C. for three units, they would maintain separate PLA/Cenvat account and prior to that only one PLA/cenvat account would be maintained by the Assessee for discharging duties for clearance of goods. The Order dated 12.4.2005 of Commissioner (Appeal) was implemented on 23.9.2009, when the other two R.Cs. were issued to DT Division and Vareli Division as quoted above. On close reading of the above R.Cs., it is clear that the said R.Cs. dt.23.09.2009 were issued as per application dt.28.02.2005. So, the finding of the Adjudicating authority that the Assessee applied for separate R.Cs. on 28.02.2005 and 15.04.2005 and from 15.04.2005, it would be considered as separate units, are contrary to R.Cs. dt.23.09.2009. We agree with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Order dated 28.9.2003 and 28.7.2004, the Deputy Commissioner of Central Excise and Customs allowed a single R.C. for three units and extended the facility of common PLA and Cenvat account. In our considered view, such orders would be in force, till the order of the Commissioner (Appeals) was implemented and new R.Cs. were issued by the authority. The Assessee cannot discontinue the maintenance of common PLA/Cenvat Account on its own, unless three separate R.Cs. are issued as ordered by the Commissioner (Appeals). So, the findings of the Adjudicating Authority that as the Assessee applied for separate registration on 15.4.2005 and from that date three Divisions would be considered separately registered as three separate factories, against the provisions of the law and facts of the case. 21. The Ld Special Counsel submits that the apex court having declared the law, the date of effectiveness of separate registration for the two units would have to be 28.2.2005. We are unable to accept the contention of the Ld Special Counsel. The expressions separate registration certificate shall be obtained for each of such premises in Para 2 of Notification No. 35/2001-CE (NT) dtd 26.6.2001 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the exemption notification which has no relation with the present proceedings. The Ld Special Counsel submits that the order dtd 27.10.2014 of the Tribunal in respect of the other proceeding on eligibility of the exemption notification, the Revenue filed appeal before the Honble Supreme Court. The Honble Supreme Court admitted the appeal filed by the Revenue. Hence, we would not like to pass any opinion on the admissibility of the Exemption Notification, which is a separate proceedings and pending before the Honble Supreme Court. 24. The present appeal is restricted to whether on 15.04.2004, three units would be considered as separate units and the transfer of credit from DT unit to the Assessee and utilisation of the said credit for clearance of the finished goods by the Assessee. Rule 3 of the Cenvat Credit Rules 2004 provides a manufacturer of final product shall be allowed to take cenvat credit of the duty paid on any excisable goods received in the factory or manufacturer of the final product. Sub-Rule (4) of Rule 3 of Rules 2004 provides the Cenvat Credit may be utilized for payment of any duty of excise on any final product. Thus, there is no one-to-one co-relation be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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