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2016 (9) TMI 783 - CESTAT MUMBAI

2016 (9) TMI 783 - CESTAT MUMBAI - TMI - Invokation of extended period of limitation - sustained by the Commissioner - appellant had admitted before the Commissioner that the items were not at all its inputs but on record the same were declared as inputs - mala fide intention when took the credit - products in question and impugned items were both exported under Bond - Held that:- the order of the Tribunal dated 4.10.2002 clearly records that the claim of the appellant that they took the stand t .....

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same and avail refund of the duty paid in terms of Rule 57F of the Modvat Credit Rules. - It can be seen that in the scheme of the Modvat, there is an intention to neutralize the tax suffered on the inputs cleared as such for export. Thus, with respect to goods exported by the appellant, it can be stated that the intention of the Government was to allow the credit of such inputs. Moreover the export sealing of these goods was done by Revenue and therefore they cannot say that they were not .....

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r, has decided the issue on merits observing as follows: - 1. The notice issued to the appellant alleged wrong taking of modvat credit by it on three counts - on parts of glass tube forming machinery which were exported along with this machinery without reversing the credit on the ground that they were not inputs; on a compressor and shrink wrapping machine also on the ground that they were not inputs; and on parts of the machines that the appellant manufactured and cleared, which was applied to .....

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ll its inputs, and that credit had wrongly been taken. The credit inadvertently taken had been reversed. It is not possible for us now to accept a stand now on this question of fact that is completely contrary to the stand that was taken. The claim that the appellant took the stand that it did in the reply to the notice as a result of coercion of the departmental authorities is patently absurd. It is impossible to believe that the appellant's reply which, it is stated, was drafted by an advo .....

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tilisation of the machine that the appellant manufactured which it gave in the reply to the notice shows that the compressor was necessary for the blowing of the glass into the required shape. We are however not able to accept this contention so far as the shrink wrapping machine is concerned. It is stated by the counsel for the appellant that it was supplied at the option of the customers to shrink wrap the bottles by use of the forming machine. It is clear despite this claim in the rule 570 de .....

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he machine. The appellant acquired and kept in stock some spares which were to be supplied for the machine that was to be exported. It is accepted that the export did not take place, the export order having been aborted in the year 1991-92 when it was due for export. It is also accepted that the spares in question could not be utilised in the manufacture of any goods subsequently because the company has stopped manufacturing operations for the last ten years. In that situation, it is clear that .....

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ot inputs was wrongly taken has been admitted by the appellant. There is no explanation as to why, despite being clear that manufacturing activity had come to a stop, the appellant did not from 1991 i till 1997 (when the notice was issued two years after) reversed the credit. The credit was only reversed in pursuance of an order of the Tribunal. The claim that the appellant was hoping for five years to get a purchase order is difficult to accept. 6. Having regard to the duly involved, we reduce .....

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and shrink wrapping machines on which they did not carry out any manufacturing activity and were not used in or in relation to manufacture of final products with an interest to evade Central Excise duty by incorrectly availing modvat credit on these goods, which were subsequently cleared without payment of Central Excise duty or reversing the modvat credit availed on these goods. b) The findings on this aspect are as follows- "As regards the question of limitation, 1 find that the assessee .....

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by the adjudicator was in statement recorded immediately after the detection by the officers and the legal positions thereon has not been given in detail. The said admission was made out of compulsion and that should not have been relied. This submission has force along with the plea of a bonafide belief on the part of the appellant that the credit was available to them therefore they made the declarations. The submission on how the base of 6 months limitations was not applicable in the facts a .....

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in-Original No. 229/96-Commr. Dated 30.9.1996 is reconfirmed except Modvat Credit availed on Air Compressor which was allowed to the assessee by Hon ble CEGAT vide their order No. CII/2953/WZB/2002 dated 4.10.2002. (iii) No order on penalty as the amount of penalty of ₹ 15 lakhs imposed on M/s Shavik Glasstech Ltd. has been reduced to ₹ 10 lakhs by Hon ble CEGAT/CESTAT vide their order referred above. Aggrieved by the said order, the appellants are before Tribunal again. 2. The only .....

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uch for home consumption or export under Bond. He pointed out that at the relevant time all the spares were cleared along with such final products, value of which was included in the assessable value of the final product. He argued that the products in question and the impugned items were both exported under Bond. It was argued that since the goods in dispute were ultimately exported out of India, the appellant could have claimed rebate or drawback, if they did not claim the CENVAT Credit and th .....

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not arise. He relied on the decision of Hon'ble Mumbai High Court in the case of Hindalco Industries Ltd. 2011 (272) ELT 161 (Bom). He further argued that in these circumstances, penalty under Rule 173Q is not sustainable. 4. Learned AR appearing for the Revenue relies on the impugned order. 5. We have gone through the rival submissions. We find that the issue on merit has already been decided by the Tribunal vide order dated 4.10.2002, which is not challenged. Now the only issue needs to be .....

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coercion of the departmental authorities is patently absurd. The said order also records that it is impossible to believe that the appellant s reply, was drafted by an advocate and dictated by any officer of the department. 5.2 We find that the defence of the appellant is largely based on the fact that there was no revenue loss as the goods were exported and the fact that even if the credit was taken on spares, it was possible to export the same and avail refund of the duty paid in terms of Rul .....

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lisation of the inputs and the manner of utlisation of the credit allowed in respect of duty paid thereon. Rule 57F (1)(ii) permits removal of the inputs as such for export under bond. Proviso to Rule 57F(1)(ii) permits removal of the inputs as such for export under bond. Proviso to Rule 57F(4) deals with manner of utilisation of credit in cases of export of "final products" or "intermediate products" under bond. Export of inputs as such under bond were treated as "final .....

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