TMI Blog2016 (4) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire amount of duty, which the Appellant has taken credit, having been paid by the manufacturer/ supplier, who has not subsequently claimed any refund on account of reduction of assessable value of the inputs, the Appellant would be entitled to the entire Cenvat credit. Therefore, the impugned order is liable to be set aside. When the demand itself is not sustainable as brought out above, the question of payment of interest does not arise. Therefore, demand of interest in terms of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1944 is not sustainable. Since the duty demand is set aside, the various penalties viz. penalty under Rule 15(2) of CER, 2004 read with see 11 AC, Rule 26 & Rule 27 is set aside. - Appeal No. E/42499/2014, E/41030/2015 & E/40612/2015 - Final Order No.40412-40414/2016 - Dated:- 23-2-2016 - SHRI R. PERIASAMI, TECHNICAL MEMBER AND SHRI P.K. CHOUDHARY, JUDICIAL MEMBER For the Petitioner : Shri J. Shankarraman, Advocate And Shri S. Ravi, Advocate For the Respondent : Ms. Indira Sisupal, AC (AR) ORDER PER P.K. CHOUDHARY There are three appeals filed by the appellants, M/s.Ran India Ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the value and quantified the duty demand of ₹ 2,11,557/- and directed the appellant to pay duty as well as equal penalty under Rule 26. On appeal, the Commissioner (Appeals) upheld the OIOs and rejected the appeals filed by appellants. Hence the above two appeals before Tribunal. 3. Appeal No.E/40612/2015 The brief facts of the case are that the Commissioner of Central Excise, Salem issued a SCN No.27/2013 dt. 7.5.2013 to appellant's Unit-I denying cenvat credit of ₹ 3,28,78,965/- availed by them and also ordered for recovery of the credit by invoking the proviso to Section 11A and also proposing for interest and equivalent penalty under Section 11AC. The adjudicating authority in his OIO No.15/2014-CE dt.31.12.2014 ordered for recovery of ineligible credits availed by unit-I along with interest and also imposed equivalent penalty under Rule 15 (2) of CER 2004 read with Section 11AC of the Act. 4. Heard both sides. The matter was heard on 16.2.2016 and today. 5. Ld. Advocate Shri J. Shankarraman and Shri S. Ravi, appeared for the appellants and submitted written submissions dt. 23.2.2016 and reiterated the same. Ld. Advocate submits in respect of Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cleared for DTA. The goods were self-assessed and the department never made an attempt to re-assess value under Rule 8 as there is no short payment and even after determination of value under Rule 8 they have paid excess duty. He submits that for paying higher duty appellants are penalized for no fault of theirs. Appellants paid duty both in cenvat credit account as well as cash PLA. In Unit-II they paid excise duty in cash in PLA of ₹ 5,55,02,497 (Appeal E/42499/15) for inter-unit transfer of the goods to Unit-I after exhausting credit. Therefore they were not in a position to transfer excess credit. He submits that Unit-I also paid excise duty vide both cenvat credit as well as cash which shows that there is no malafide intention or any arrangement or passing of credit to the other unit. Therefore, on the one hand Revenue alleges that they have paid higher rate of duty, whereas adjudicating authority, considering payment of higher duty, has not passed any order on the consequential refund which is not due to the government. Therefore, imposition of penalty under Rule 26 is not justified as they have not contravened any of the provisions of the rules. He relied on the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing payment of higher duty on provisional basis. He further submits that as per the CAS-4 certificate submitted by the assesse, the cost of production determined by the Cost Accountant is ₹ 31,097/-per MT (approx.) whereas what is declared by Unit-II approx. is ₹ 42,000/- per MT and the difference is more than 50% which is substantial. Therefore, he submits that the adjudicating authority has rightly rejected the value under rule 8. He also submits that adjudicating authority brought out clearly the intention of appellant that they have not availed the entire credit available to Unit-II but passed on to Unit-I. Therefore higher value adopted by the appellant is not justified and is not in accordance with the rules. He relied paras 11.0, 11.1 of the OIO dt. 20.3.14 and paras 2.01, 3.02 of the SCN at page 109 (E/40612/2015). He relied on the following case laws :- (1) CCE Chennai Vs Eveready Industries Ltd. -2011-TIOL-1115-CESTAT-MAD (2) Jay Yushin Ltd. Vs CCE New Delhi - 2002-TIOL-126-CESTAT-DEL-LB (3) Eicher Motors Ltd. Others Vs CCE Indore-2008-TIOL-977-CESTAT-DEL (4) Tata Iron Steel Co. Ltd. Vs CCE Thane-II-2013-TIOL-707-CESTAT-MUM. 8. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant has become final. The lower authority has not taken any effort for reassessment. Only after reassessment, the authority can say that there is an excess or shortage of payment of duty. There was no proposal in the notice to arrive at the correct value for the purpose of assessment. Since the correct value has not been determined, it cannot be presumed that the appellant has passed on excess credit to their own unit I. As rightly pointed out earlier, there was no necessity to pass on excess credit to Unit I as both unit II and unit I are one and the same entity. The excess amount can be transferred as cash also. They can pass on the cash legally to Unit I instead of credit. Hence the entire basis on which the Department proceeded against the appellant is incorrect. 13. If the Department feels that they will not accept any body paying more duty then the same should have been granted as refund. In the present case, no such order has been passed. No doubt the refund is subject to Section 11B. 14. In the instant case, there is no evasion of duty nor is there any violation of Central Excise Rules/Acts by the Appellant. In any case the entire transaction is revenue ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r taking credit of the duty paid on the inputs and capital goods received in the factory on the strength of documents specified in Rule 9 (1) thereof. Rule 9 (1) of the Cenvat Credit Rules, 2004 specifies the documents on which Cenvat credit can be taken and one such document is invoice issued by a manufacturer from his factory or depot or from the premises of the consignment agents or any other premises from where such goods are sold. 18. The invoices on which Cenvat credit was taken were issued by the manufacturer namely, M/s Ran India Steels Pvt. Ltd., Unit II from their factory from where the said goods were cleared. The receipt of goods covered by the invoices showing payment of duty is not disputed either in the SCN or in the impugned order. The eligibility of the goods for credit, their receipt and use in the factory are also not in dispute. Similarly, the fact that the Appellant has paid the price and the duty as shown in the invoices to the supplier is also not in dispute. As per Rule 11 of the Central Excise Rules, 2002, an invoice shall necessarily contain the registration number, name of the consignee, description, classification, time and date of removal, mode of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the fact that in the appeals filed by Unit II there was no reassessment by the authorities, credit cannot be denied at Unit I. Further the CENVAT credit cannot be disallowed at the end of the Appellant who is the recipient of inputs on the ground that the manufacturer-supplier has paid duty by declaring higher value. The following decisions lend support to the above view. 20. In this regard, reliance is placed by the Appellants on the following decisions: (i) Parasrampuria Synthetics Ltd Vs CCE, Jaipur (Supra) (ii) Acero Fabrica Vs CCE, Mumbai (Supra) (iii) CCE, Mumbai Vs Anand Arc Electrodes Pvt. Ltd (Supra) In the case of CCE vs. MDS Switchgear Ltd (Supra) the Honble Supreme Court while upholding the Tribunal s order, held that rules entitled the recipient manufacturer to avail of benefit of duty paid by supplier manufacturer and the quantum of duty already determined by jurisdictional officers of supplier unit cannot be contested or challenged by officers in charge of recipient unit. Even though Unit II and Unit I have the same jurisdictional officer, there was no proposal to reassess the clearance of Unit II and therefore, the Department has err ..... X X X X Extracts X X X X X X X X Extracts X X X X
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