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Victory Electricals Limited, Victory Transformers & Switchgears Ltd Versus CCCE&ST, Hyderabad-IV

2017 (11) TMI 11 - CESTAT HYDERABAD

Clandestine removal - inputs like CRGO steel - the revenue authorities were of the view that there was a excess consumption of raw materials like CRGO sheets, copper etc. and the same was intentionally done so, as to avail unintended cenvat credit on the inputs - whether the said VEL and VTSL are required to reverse the cenvat credit, allegedly having consumed inputs in excess and unrecorded and held to have been removed clandestinely or otherwise? - Held that: - The provisions of Cenvat Cre .....

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f inputs are ferged etc. in the absence of any such evidence it has to be held that quantum of inputs as per duty paying documents are received. - There is nothing on record to show that the said Power Corporations will reject the transformers in which, if the weight transformer exceeds the wieght in technical specification. It is also surprising that in this case Revenue authorities have conspicuously refrained from recording any statement of the responsible Officers of APEPDCL and APCPDCL .....

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- Penalty on VEL & VTSL - Held that: - the appellant has not been able to prove with concrete evidence to come to a conclusion as to the said capital goods were in fact installed in their own unit or otherwise. In the absence of any such evidence, we hold that the demand of ₹ 7,01,044/- is correct, alongwith interest and penalty imposed is also correct. - Non confiscation of raw materials and semi finished goods which were found unaccounted - Held that: - the adjudicating authority .....

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d Shri Madhu Mohan Damodhar, Member (Technical) Shri Muthu Venkataraman, Advocates for the Appellant Shri R. Narasimha Murthy, Superintendent/AR for the Respondent ORDER [Order Per : Bench] 1. By this common order, we intend to dispose of the following appeals as they are interconnected and are directed against the very same Order-in-Original: a) Victory Electricals Ltd Appeal No.E/803/2009. b) Victory Transformers & Switchgears Ltd.E/804/2009. c) Commissioner, Hyderabad appeal No.E/826/2009 .....

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ls Ltd (VEL) and M/s Victory Transformers & Switchgears Ltd (VTSL) are against the confirmation of demands raised alongwith interest and also imposition of penalties. 4. On perusal of records, the relevant facts that arise for consideration are that M/s VEL and M/s VTSL are manufacturers of transformers and discharge the appropriate duty liability on the transformers manufactured and cleared, are availing cenvat credit of various inputs and input services for the manufacturing of such transf .....

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said VEL & VTSL and recording various statements of the persons involved, the revenue authorities were of the view that there was a excess consumption of raw materials like CRGO sheets, copper etc. and the same was intentionally done so, as to avail unintended cenvat credit on the inputs. Coming to such a conclusion and after the investigation, show cause notices were issued for the demand of excess cenvat credit availed by VEL & VTSL. Show cause notice annexed various statements recorde .....

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able to justify the excess procurement of the inputs and utilisation thereof which has resulted in enabling them to avail cenvat credit; that they had not produced any material in co-relation to the cenvat credit availed to the consumption of inputs; coming to such a conclusion, demands were confirmed on both the appellants alongwith interest and also imposed penalties. The operative portion of the order is reproduced: a. I demand an amount of ₹ 1,02,11,970/- under rule 14 of CENVAT Credit .....

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section 11AC of the Central Excise Act. c. I demand an amount of ₹ 7,01,044/- under rule 14 of the CENVAT Credit Rules, 2004 read with proviso to section 11A(1) of the Central Excise Act towards the credit taken on the capital goods which are removed to other units. Since an amount of ₹ 2,28,626/- is already paid towards the credit on capital goods diverted to Unit V, I order that the amount already paid shall stand appropriated. I order that the remaining amount will be paid accordi .....

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77; 5,89,588/- and I order appropriation of the same. I order that interest under section 75 of the Finance Act, 1994 shall also be paid on the amount of service tax held payable above. However, as the non payment of service tax is on account of the bona fide reasons and no fraudulent intent is noticed, I do not propose penal action under section78 of the Finance Act by virtue of the provisions contained in section 80 of the Finance Act. However, I order that penalty shall be paid under section .....

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rtakings and the purchase orders, technical requirement are on the basis of the requirement of load in a particular area. It is his submission that the department has not confirmed the demands raised as duty on the transformers allegedly removed, but on the inputs like CRGO steel holding that appellant had shown excess consumption of the said CRGO steel, Copper, Transformers and removed the inputs clandestinely. He draws the attention of the Bench, to the specimen purchase order placed by Centra .....

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, has been shown as purchaser of 383.025 MT of MS scrap. It is his submission that the findings of the adjudicating authority as to the fact that M/s Vinayak Enterprises has not received the said scrap seems to be incorrect as appellant never sold any scrap to M/s Vinayak Enterprises but sold it to Shri Nagraj and no statement has been recorded from such scrap dealer through appellant had given phone number and other details.. It is his further submission that the adjudicating authority has also .....

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Vs. Union of India [1978(2)ELT J172 (SC)] (14-17 of Case Law compilation) c. Atlas Conductors Vs. CCE, Mumbai [2008(221)ELT 231 (Tri.-Mumbai)] d. CCE Tirunelveli Vs. SSD Spinning Mills Ltd [2008(222)ELT 392] e. Mahesh Silks Mills Vs. CCE, Mumbai [2014(304)ELT 703(Tri.-Ahmd). f. Aum Aluminium Pvt. Ltd. Vs. CCE [2014(311)ELT 354 (Tri.-Ahmd). g. Rama Spinners Pvt. Ltd. Vs. CCE, Hyderabad [2017(348)ELT 321 (Tri.-Hyd). h. Commins India Ltd. Vs. CCE, Pune [2007(219)ELT 911 (Tri.-Mum.) 6. Ld. DR, on th .....

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which cenvat credit was availed, is evident from the fact that appellant has been undertaking repairs of transformers received from State Electricity Boards and these repairs could not have been undertaken without utilisation of such inputs on which cenvat credit has been availed. He would submit that there being no issue of inputs for manufacture of different transformers, the adjudicating authority has correctly confirmed the demands received on both VEL and VTSL. It is his further submission .....

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point is regarding cenvat credit availed on capital goods but did not install them in their unit but diverted to another unit, is not in consonance with the provisions of Cenvat Credit Rules, 2004. 7. As regards Departments appeals, it is his submission that adjudicating authority has dropped the proposal for confiscation of raw materials, semi finished goods and finished goods which were seized during investigation of non accountal of goods in any records maintained by VEL as per Central Excise .....

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E, Surat-II 2007(213)ELT 109 (Tri.-Ahmd.) c. CCE, Meerut-II Vs. ASP Sealing Products Ltd 2008(221)ELT 62 (Tri.-Del.) d. CCE, Chandigarh Vs. Arihant Foam Pvt. Ltd 2005(188)ELT 46 (Tri.-Del.) e. PNP castings (P) Ltd Vs. CCE, Lucknow 2006(194)ELT 250 (Tri.-Del.) f. Sikka Papers Ltd. Vs. CCE, Meerut-I 2008(229)ELT 619 (Tri.-Del.) g. CCE, Vapi Vs. Modison Ltd 2006(203)ELT 521 (Tri.-LB). It is also his submission that the adjudicating authority has not imposed any penalty on M/s VEL despite the confir .....

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demand on capital goods, the said capital goods were in fact installed at their own unit and is covered by the decision of Hon ble High Court of Bombay in the case of 2009(324)ELT A 120 (Tri.-Bom.). As regards the service tax liability on GTA services, he submits that they had been filing the returns regularly and hence the demand is purely hit by limitation. 9. On careful consideration of the submissions made by both the sides and perusal of records, we find that the issue that requires the at .....

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technical specifications which indicate specific weight of the goods to be used in the manufacturing activity of the said transformers and calculating in reverse the quantum of the materials used for manufacturing of transformers cleared by both the appellants and tallying it with the receipts of the inputs on which cenvat credit has been availed, Revenue has come to the conclusion consumption of inputs is erroneous that there is ineligible availment of cenvat credit and consequent of these fin .....

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he said Cenvat Credit Rules. In our considered view, if it is not the case of Revenue that appellant has only received the documents and availed credit but did not receive the inputs, nor there are any findings that documents of receipt of inputs are ferged etc. in the absence of any such evidence it has to be held that quantum of inputs as per duty paying documents are received. As regards the consumption thereof, it is seen that the confirmation of the demand is based upon reverse calculation .....

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circumstances. Addressing submissions of Counsel we find that in one of the sample purchase orders placed by APEPDCL and APCPDCL for supply of 2500 Nos. of 11 KV/433-250 V 16 KVA oil immersed naturally cooled three phase 50 Hz double wound, CRGO Core Copper winding, outdoor type, conventional distribution transformers, the said purchase order also places an order for 2750 Nos. 25 KVA oil immersed naturally cooled three phase 50 Hz double wound Distribution Transformers; on mere casual perusal o .....

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Power Corporations will reject the transformers in which, if the weight transformer exceeds the wieght in technical specification. It is also surprising that in this case Revenue authorities have conspicuously refrained from recording any statement of the responsible Officers of APEPDCL and APCPDCL, which may have brought on record that excess input usage was not in their knowledge for drawing an inference against the appellant. In our view, there being absence of evidence toindicate that consum .....

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