GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (6) TMI 993 - GOVERNMENT OF INDIA

2016 (6) TMI 993 - GOVERNMENT OF INDIA - TMI - Refund of un-utilized cenvat credit - rejection of refund to the extent transferred from other unit - Condonation of delay - export of Indian Mouth Freshner falling under chapter Sub-Heading No.21069020 - The Commissioner (Appeals) decided the case in favour of respondent assessee as there was no confirmed demand of ₹ 1,44,16,817/- against the respondent for violation of Rule 10 of the Cenvat Credit Rules. Now the Department has filed this Rev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ddress well within time as it reached the address to which it was sent as per the postal authorities. - 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. - 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther, 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. - Revision application dismissed - Decided against the revenue. - F.No. 198/114-A/2015-RA - ORDER NO. 56/2016-CX- Dated:- 18-4-2016 - SMT. RIMJHIM PRASAD, JOINT SECRETARY ORDER: This Revision Application has been filed by the Commissioner of Central Excise & Customs, Guntur (hereinafter referred to as the Dep .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng No.21069020 of the Central Excise Tariff Act 1985 and exporting the same. The respondents are availing the facility of Cenvat credit under the Cenvat Credit Rules, 2004. The respondents filed a refund claim of ₹ 2,57,77,440/- in terms 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 & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the impugned Order-in-Original dated02.07.2014, wherein the refund claim amounting to ₹ 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 Excise & Service Tax, Guntur, who decided the case in fav .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

urt was whether a revision application had been filed by the Department or not. The Hon'ble High Court disposed off the above said Writ Petition vide Order dated 07.012016 (received in the Revision Application Unit on 23.02.2016 from the Dispatch Assistant, High Court of Telangana and Andhra Pradesh) with direction to the first respondent, viz. Union of India through Joint Secretary (Revision Application) to decide the pending Revision Application within two months from the date of receipt o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t to the Deputy Commissioner, Vasai Division by the JAC, Guntur Division calling for a report on the transfer of the unit from Vasai to Guntur. The Deputy Commissioner of Customs, Central Excise and Service Tax, Vasai Division, Thane-Il vide his letter in F.No.C.EX/Vasai/R-03/Blue Whale/2013/1171, dated 20.12.2013, stated that the ER-I return submitted by the assessee for the month of October, 2012 shows clearance of 33826 Nos. of Indian Mouth Freshner (PM) valued at ₹ 2,72,29,930/and 1873 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ting 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hed goods intended to be transferred from Vasai Unit to Guntur. (v) No permission is required from the Vasai Division Office for shifting/transferring the credit to their Guntur Unit. The Deputy Commissioner also stated that: I. While receiving the said letter on 1109.2012 of M/s.Blue Whale Industries, Vasai were asked to furnish copy of stock statement submitted to the Bank for the period from June, 2012 to 17.09.2012-and-also to furnish-copy of stock register for the period from June, 2012 to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, Valiv Road, Vasai Road (East), Thane-401 205. 5.3 Meanwhile, M/S. Blue Whale Industries, Perecherla, Guntur (AP), vide their letter dated 14.11.2013 have informed the Assistant Commissioner, Guntur Division that they have raised a credit entry of ₹ 1,44,10,817/- (Cenvat Credit-RG 23A Part-Il] & ₹ 34,572/- (PLA) stating that they have concluded that there is substantial compliance of Rule 10(3) of the Credit Rules. The assesse have also reflected the same in their ER-I Return fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s to such transferred, sold, merged, leased or amalgamated factory. The assesses have not complied with the provisions of the said Rule, The assesses have not procured/produced any clearance certificate / fact statement regarding their Central Excise credits/liabilities/plant & machinery/raw material/semi finished goods/finished goods from the jurisdictional central Excise Authorities of Vasai Division, Maharashtra, thereby contravening the provisions of Rule 10 (1) of the Credit Rules. 5.5 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4,572/- (PI-A) neither from the jurisdictional Deputy Commissioner, Customs & Central Excise, Vasai Division, nor from the jurisdictional Assistant Commissioner, Customs & Central Excise, Guntur Division but have availed the said credits sue motto and thus, contravened the provisions of Rule 10 (3) of the Credit Rules and thus have suppressed the facts. 5.7 The relevant provision under which the refund claimed is Rule 5 of credit Rules which is reproduced hereunder: Rule 5: Refund of CEN .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed for home consumption or for export on payment of duty; or (ii) service tax on output service, and where for any reason such adjustment is not possible, the manufacturer or the provider of output service shall be allowed refund of such amount subject to such safeguards, conditions and limitations, as may be specified, by the Central Government, by notification: 5.8 In view of the above narrated developments, the respondent's Unit has not been transferred by following the procedures prescri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ting Authority 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 Sec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 raised for the irregular availment of credit, the question of payment of this disputed credit by way of refund does not arise. Only in the case, the assessee proves that there was no irregular availment of credit then only the question of consideration of refund arises. 6. A show cause notice was issued .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as satisfied that the applicant was prevented by sufficient cause from presenting the application within the prescribed period of 3 months. Thus, the statutory scheme of Section 35EE of the Act is that a Revision Application has to be filed within 3 months of the communication of the order to be challenged, and delay of further 3 months could be condoned by the Revisionary Authority. But if a period of 6 months passed by and revision application was not filed within such total period of 6 months .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecified period of 60 days. 6.2 The Hon'ble Supreme Court has held in case of Singh Enterprises Vs Commissioner, Jamshedpur 2008 (221) ELT 163 (SC) that the proviso to Sub Section (1) of Section 35 makes the position crystal clear that the appellate authority has no power to allow the appeal to be presented beyond the period of 30 days, and the language used makes the position clear that the Legislature intended the appellate authority to entertain the appeal by condoning delay only upto 30 d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

heme 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s, in judgment reported at 2015 (326) ELT 532 (Guj.), held that the limitation provided under Section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided under the proviso to Section 35(1), nor could the appeal be filed beyond the period of 90 days. The Hon'ble High Court has also held that even a petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal; and it is further held by the L .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

extent of ₹ 1,44,10,817/-. On this show cause notice, an 010 No.62/2014(R) (CE) dated 02.07.2014 was passed by the Assistant Commissioner of Central Excise, Guntur, who sanctioned refund claim to the extent of ₹ 1,13,66,623/in cash, and rejected the remaining clam for ₹ 1,44,10,817/- on the grounds that a Draft Show Cause Notice for denial of the credit of the above amount was submitted to the Commissioner for the consideration vide letter No.C.No.V/21/15/32/2014-Adj. dated 26. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

claim to the extent of ₹ 1,13,66,623/- was pre-audited and approved by the office of the Commissioner, Guntur, and accordingly refund of such amount was allowed. 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 Dr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 considered or decided by the Assistant Commissioner while rejecting our refund claim or even by the Commissioner (Appeals) while allowing our appeal. 6. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

harashtra, regarding Central Excise credits/liabilities/plant and machinery/raw materials/semi-finished goods/finished goods in this case; (ii) that our Central Excise registration for Thane factory has not been surrendered and therefore there was contravention of the provisions of Rule 9 of the Central Excise Rules, 2002; and (iii) that though Rule 10 of the Cenvat Credit Rules refers to the satisfaction of the Deputy/Assistant Commissioner of Central Excise regarding transfer of stock of input .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

laim for Rs was rejected on totally different grounds like Draft proposal to issue a Show Cause Notice by the Commissioner for alleged irregular transfer of this Cenvat credit of ₹ 1,44,10,817/- and pre-audit and approval having been allowed by the Commissioner's office only for the remaining claim of But these grounds on which the Assistant Commissioner had rejected our refund claim for which we filed appeal before the Commissioner (Appeals) are not raised in the Revenue's Applica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evenue's Application in respect of transfer of unutilized Cenvat Credit of ₹ 1,44,10,817/- are sustainable in facts as well as in law, and therefore all these objections deserve to be rejected at once in the interest of justice. 6.10.3 In this view of the matter, we request you to reject the Revenuers Revision Application. 7. In compliance of Hon'ble High Court's Order, personal hearing was scheduled in this case on 21.03.2016. 7.1 Shri Ratna Kishore, Assistant Commissioner, Gu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n is itself time barred and needs to be dismissed as such. Even on merits refund is admissible to them as it is not the jurisdiction of the Revisionary Authority to decide issue raised in the Show Cause Notice which is in any case pending adjudication. 7.3 The department vide their FAX, received in this Office on 29.03.2016 forwarded dispatch particulars of revision application sent by registered post sent on 16.01.2015 vide registered letter along with acknowledgement due from Guntur Post Offic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nder Rule 5 of the Cenvat Credit Rules, 2004. The lower authorities observed that this amount included the credit amount of ₹ 1,44,10,817/- transferred from their old unit at Vasai to present unit at Guntur under Rule 10 of the Cenvat Credit Rules 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 ₹ 1,44,10,817/- as the said amount is found to be irregularly availed credit o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

; 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 r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rom the applicant subsequently after their being informed that no such revision application is seen to have been received. The Hon'ble High Court disposed off the above said Writ Petition with direction to Revisionary Authority to decide the Revision Application within two months from the date of receipt of a copy of the order if it is otherwise in order and uninfluenced by any of the observations made there in above. 11 Government first proceeds to examine the issue of the limitation raised .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the Revisional Authority to decide the limitation with reference to Section 35EE (2) of the Act. Therefore, we do not wish to express any opinion at this stage about the limitation, One of the contentions of the petitioners is that the 15t respondent has no authority to condone the delay beyond three months under Section 35EE (2) of the Act. No doubt, the power conferred on the 1st respondent is limited. However, when the application was sent to the wrong address due to the misdirection of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to file a Revision; till then, the respondents are not aware about the change in the address of the office of the Joint Secretary. In those circumstances, to avoid loss to any one of the parties to this Writ Petition, we find that it is a fit case to direct the 1st respondent to dispose of the Appeal pending before them, as expeditiously as possible, in any event not later than two months from the date of receipt of a copy of this order, by exercising an equitable jurisdiction conferred on this .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e limit for filing Revision Application has been specified in Section 35EE (2) of the Central Excise Act, 1944 as under: ' (2) An application under sub-Section (1) shall be made within three months from the date of the communication to the applicant of the order against which the application is being made: Provided that the Central Government may, if it is satisfied that applicant was prevented by sufficient cause from presenting the application within the aforesaid period of three months, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Court to decide the issue of limitation with reference to Section 35EE of the Act. Government notes that it is an established fact on record that the Revision Application against the impugned Order-in-Appeal dated 29.10.2014 (received on 30.10.2014) was dispatched by registered speed post on 1601.2015 through Guntur Post Office bearing NoRN61084634 to an address as mentioned in preamble to the impugned Order-in-Appeal and in the authorization to file appeal. The Department of Posts, Guntur vide .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

plication 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 judge .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

date on which it was delivered at previous address of Revisionary Authority. 11.4 In this regard, Government finds support in the decision of the Hon'ble CESTAT in the case of Kanishk Steel Industries Ltd. 2005 (191) ELT 231 (Tri-Chennai) where in a similar situation, an appeal was sent by Speed Post to the Registry of the bench but nothing was heard from the Registry in relation to that appeal. Later on when a connected appeal arose before the Bench, the matter came to light that it was no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that even the Hon'ble High Court of Telangana and Andhra Pradesh in the context of the present case is persuaded by the principle laid down in the case of Ruby Rubber Works. The Hon'ble Kerala High Court therein has dealt with a case where the order was appealed against within time, although on account of a wrong address, the memorandum of appeal did not reach the office of the Appellate Collector and held that even assuming that the petitioner's appeal was ultimately received by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 quest .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 application in respect of an order where the amount of duty or fine or penalty, determined by such order does not exceed five thousand rupees] [(IA) The Principal Commissioner of Central Excise or Con7/77issioner of Central Excise as the case may be, if he is of the opinion that an order passed by the Comm .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d by the Commissioner (Appeals) under Section 35A; (c) an order passed by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) (hereafter in this Chapter referred to as the Board) or the Appellate Commissioner of Central Excise under Section 35, as it stood immediately before the appointed day; (d) an order passed by the Board or the Commissioner of Central Excise either before or after the appointed day, under Section 35A, as it stood im .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

use; (b) a rebate of duty of excise on goods exported to any county or territory outside India or on excisable materials used in the manufacture of goods which are exported to any country or territory outside India; (c) goods exported outside India (except to Nepal or Bhutan) without payment of duty ; *(d) credit of any duty allowed to be utilized towards payment of excise duty on final products under the provisions of this Act or the rules made thereunder and such order is passed by the Commiss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 Revisio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version