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TMI Blog2016 (6) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Rule 5 of the Cenvat Credit Rules, 2004 being the accumulated Cenvat Credit attributable to the inputs used in the manufacture of finished goods exported during the quarter ending December 2013. The lower authorities observed that the present claim of Rs. 2,57,77,440/- also includes the credit amount of transferred from their old unit at Vasai to present unit at Guntur and a show cause notice dated 18.06.2014 was issued to the respondents asking them as to why the refund claimed by them should not be disallowed to the extent of Rs. 1,44,10,817/- as the said amount is found to be irregularly availed credit on account of transfer of their old unit from Vasai to Guntur. After following due process of law, the adjudicating authority passed the impugned Order-in-Original dated02.07.2014, wherein the refund claim amounting to Rs. 1,44,16,817/- was rejected on the ground that the respondents have taken the said amount as irregular cenvat credit under Rule 10 of the Cenvat Credit Rules, 2004 on account of transfer of their unit from Vasai to Guntur. 3. Being aggrieved by the said Order-in-Original, respondent filed appeal before Commissioner (Appeals), Customs, Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 113, Geeta Udyog Nagao Building No.3, Valiv Road, Vasai Road (East), Thane-401 205 vide their letter dated 17.09.2012 while informing above the proposed shifting of their unit from Vasai to Guntur had informed that: (i) They have obtained a new Central Excise Registration ECC No.AAHFB7252LEM002 at Guntur. (ii) They will be shifting finished goods lying in their Vasai Unit under Rule 10 of the Credit Rules, without discharging the duty. (jii) They shall account for the finished goods lying in Vasai Unit and transferred to Guntur Unit in their Daily Stock Register at Guntur. Thereafter, they shall request Central Excise Authorities at Guntur to verify physical receipt of the material, if they so desire and send a copy of such verification report to Vasai Divisional Office. If no verification is conducted at Guntur by the Central Excise Authorities, they shall send a self attested Xerox copy of their Daily Stock Register. (iv) In their letter they had not submitted the details of stock, lying in Vasai Unit nor the amount of credit balance which they intended to transfer nor the worksheet of the Cenvat Credit attributable to the Stock of Finished goods intended to be transferred f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, Maharashtra, thereby contravening the provisions of Rule 10 (1) of the Credit Rules. 5.5 Further, it was verified from the CBECs verification site as on 30.10.2014, the registration CER NO.AAHFB7252LXM001 obtained by the assessee at Range-111, Vasai Division, Thane-Il Commissionerate, Maharashtra, has not been cancelled. It is also a fact that the. Range Office, Range-111, Vasai vide his letter dated 28.03.2014 has informed the JAC Guntur that a SCN was issued to the unit by the Additional Commissioner, Thane-Il Commissionerate demanding an amount of for irregular availment of cenvat credit and the same is pending adjudication. 5.6 As per Rule 10 (3) of the Credit Rules, the transfer of the Cenvat Credit under sub-rule (1) shall be allowed only if the stock of inputs as such or in process, or the capital goods is also transferred along with the factory or business premises to the new site or ownership and the inputs, or capital goods, on which credit has been availed of are duly accounted for to the satisfaction of the Deputy Commissioner of Central Excise or, as the case may be, the Assistant Commissioner of Central Excise. In this regard, the assessee should have prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity is legally correct. However, the demand under Section 1 IA has also been issued on 11.11.2014 by the Commissioner, Guntur. 5.9 As such the violations made by the asseessee in availing the said credit have been mentioned in the Show Cause Notice issued by the JAC. The JAC on 21.10.2014 has informed the Appellate Authority that the issuance of the SCN by the Commissioner is under process. It is imperative to mention that the demand ultimately raised well within the time frame of Section 1 IA and the timing of issuance of will not vitiate the proceedings. Hence it is clear that the a part of amount of refund claimed by the respondent has been denied for the procedural violation of Rule 10 of CCR, by giving them an opportunity to Show Cause also, but not on assumptions and presumptions. When Rules or Provisions seek mandatory or complete compliance, the claim of the assessee that they have made substantial compliance of Rule 10(3) of CCR, will not meet the requirement of Law as per the Supreme Court Judgement in case of Commissioner of Central Excise., New Delhi Versus Hari Chand Shri Gopal reported in 2010 (260) E.L.T. 3 (S.C.). 5.10 Since a demand has already been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court has also held in para 8 of this judgment that there was complete exclusion of Section 5 of the Limitation Act, and there was no power to condone delay after the expiry of 30 days period. 6.3 We submit that the same principle is applicable with regard to the scheme of Section 35EE also, because the language of Section 35EE (2) and the proviso thereunder is similar to the language and scheme of Section 35(1) of the Central Excise Act. The proviso to Section 35EE (2) makes the position clear that the Legislature intended the Revisionary Authority to entertain a Revision Application by condoning the delay only upto 3 months after the expiry of specified period of 3 months which was the normal period for preferring a Revision Application. The provisions of the Limitation Act are not applicable even in case, of a Revision Application, and therefore there is no power to condone the delay after a total period of 6 months from the date of communication of the order against which a Revision Application is being made. 6.4 If the condonable period of limitation was over, then no appeal could be preferred under the Act, and the only remedy available to the aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.6 Thus, the Assistant Commissioner had held, and rightly so, that the issue about the merits of our eligibility for credit of transferred from our Vasai Unit to our new unit at Perecherla in Guntur District was, not the subject matter of the case before him; but the claim for such unutilized credit was rejected only because a Draft Show Cause Notice was submitted to the Commissioner for consideration vide letter dated 26.06.2014 (supra) for such credit by the Commissioner of Central Excise, Guntur and that pre-audit and approval for sanction were communicated and allowed by the Commissioner's office for the claim of Rs. 1,13,66,623/- only. These were the only issues raised by the Assistant Commissioner for rejecting our refund claim of Rs. 1,44,10,817 /. 6.7 The Commissioner (Appeals), however, found that the above grounds were not germane nor relevant for deciding a refund claim lodged under Rule 5 of the Cenvat Credit Rules, and accordingly our appeal is allowed by the Commissioner (Appeals). But a perusal of the Revision Application now filed by the Revenue shows that totally new grounds are raised in the Application though no such grounds were co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ission with regard to merits of the case as under: 6.10.1 Cenvat credit lying unutilized in one factory is a substantive right of the manufacturer when the factory is shifted to another site with inputs, capital goods and such Cenvat Credit. We also submit that there is no permission that a manufacturer requires from the Central Excise officers for transfer and availment of Cenvat Credit when his factory was shifted to another site because Rule 10 only provides that the manufacturer shall be allowed to transfer the Cenvat Credit lying unutilized in his accounts to such transferred factory. We have also caused enquiry in other Divisions and Commissionerates and we have learnt that there is no practice anywhere for applying for a permission or obtaining a permission for transferring unutilized Cenvat Credit when a factory was shifted by a manufacturer to another site with inputs, capital goods etc. We therefore request you to consider this position, and also to consider that Rule 10 of the Cenvat Rules does not specifically require a permission for transfer of Cenvat Credit when stocks of inputs and capital goods etc. were shifted to the new site while transferring unutilized Cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents asking them as to why the refund claimed by them should not be disallowed to the extent of Rs. 1,44,10,817/- as the said amount is found to be irregularly availed credit on account of transfer of their old unit at Vasai to Guntur. After following due process of law, the adjudicating authority passed the impugned Order-in-Original dated 02.07.2014, wherein he rejected the refund claim amounting to Rs. 1,44,16,817/- on the ground that the respondents have taken the said amount as Cenvat Credit irregularly under Rule 10 of the Cenvat Credit Rules, 2004. The Commissioner (Appeals) decided the case in favour of respondent as there was no confirmed demand of Rs. 1,44,16,817/- against the respondent for violation of Rule 10 of the Cenvat Credit Rules. Now the Department has filed this Revision Application under Section 35EE of the Central Excise Act, 1944 before the Central Government on grounds mentioned in para 4 above. 10. Government further observes that a Writ Petition No.28868 of 2015 was filed by the respondent before the Hon'ble High Court of Telangana and Andhra Pradesh making a prayer that the original authority may be directed to grant refund pursuant to impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Constitution is discretionary and such discretion must be exercised judiciously, taking into consideration a// the attending circumstances. In the present facts of the case, as directed by the Appellate Commissioner and Committee of Commissioners, the Revision was sent to the Joint Secretary, Government of India, Ministry of Finance and Company Affairs, Department of Revenue, Jeevan Deep Building, Sansad Marg, New Delhi but the office address of the Joint Secretary (Revision Jurisdiction) Ministry of Finance, 14 Hudco Vishal Buildings, Bhikhaji Cama Palace, New Delhi was not repeated in the address given in the orders referred above. Curiously, the grounds of Revision and other documents sent along with the Revision were neither returned nor forwarded to the correct address but only after consistent consultation by letter correspondence, the Department could know shifting of the office even prior to sending the Revision along with the documents to the address given in the-orders-passed by the Appellate Commissioner and Committee of Commissioners directing the 27d respondent to file a Revision; till then, the respondents are not aware about the change in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal. The Department of Posts, Guntur vide their letter No.522004-00308 dated 27.11.2015 intimated the applicant Department that the said revision application dispatched on 16.01.2015 with above transaction number has been delivered on 22.01.2015. It is also a fact on record that the said revision application was not sent to the address where office of Revision Application is currently located, as also observed by the Hon'ble High Court. Neither was it returned nor forwarded to the correct address. Further, the office of Revision Application informed the Department on 13.10.2015 in response to their request for early hearing in the revision petition filed by them that no such Revision Application had been received at the present address, where after they sent a copy. 11.3 From the above, it emerges that it is not a case that no Revision Application has been filed in terms of Section 35EE of the Central Excise Act, 1944 but that it has been sent at the wrong address, In para 2 of page 9 of Hon'ble High Court's judgement, it has been stated that if the Revision Application has been sent to wrong address due to misdirection of Appellate Commissioner an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sent to the wrong address due to the misdirection of the Appellate Commissioner and Committee of Commissioners. If the application had not been wrongly addressed, it would have reached the Revision Application Unit at the correct address well within time as it reached the address to which it was sent as per the postal authorities. 11.7 In view of the above discussion, Government holds that the revision application has been filed within time under Section 35EE of the Central Excise Act, 1944 and question of being hit by limitation does not arise. 12. Government now proceeds to examine the issue involved in this case. It is observed that the main issue in the present case is admissibility of refund of accumulated Cenvat Credit under Rule 5 of Cenvat Credit Rules, 2004. 12.1. Government observes that Section 35 EE of Central Excise Act, 1944 states that "(1) The Central Government may, on the application of any person aggrieved by any order passed under Section 35A, where the order is of the nature referred to in the first proviso to sub-section (1) of Section 35 B, annul or modify' such order: [Provided that the Central Government may in its discretion, refuse to admit an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nance (No. 2) Act, 1998 *To be inserted from a date to be notified by Section 109 of the Finance (No.2)At, 1998 (21 of 1998). 12.2. Government observes that under Section 35 EE of the Central Excise Act, 1944, a Revision Application against the Order of Commissioner (Appeals) passed under Section 35 A ibid lies with Government only if such orders relate to cases as mentioned in the proviso to sub-section (1) of Section 35(B) of the Act. As the issue covered in this Revision Application relates to refund of unutilized credit under Rule 5 of Cenvat Credit Rules 2004, the subject matter is not covered in the first proviso to sub-section (1) of Section 35 B of the Central Excise Act 1944. Therefore, Revision Application on this issue does not lie before Central Government under Section 35 EE of the Central Excise Act, 1944. 12.3. Further, Government observes that the Department as in the authorization to file Revision Application under Section 35EE (2) has erred in considering the issue as a case of rebate of duty. It is only when duty is leviable at the time of export and duty is actually paid before export that question of rebate of duty on goods exported can be raised under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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