TMI Blog2018 (9) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... also themselves procured HR Coils with sizes 11 X 1147 MM and 14.2 X 1553.4 MM. All these HR Coils were exclusively used in manufacture of exempted pipes and were not used in any other duty paid pipes - the availment of CENVAT Credit will be barred by Sub-rule (1) of Rule 6 of the Rules - credit availed is required to be reversed - the appellant has to be given adjustment of the amount already reversed as above. For this limited purpose of re-quantification of demand on this issue, after giving adjustment of the amount already reversed by the appellant, we remand the matter to the adjudicating authority. Time Limitation - Held that:- There is no positive evidence to show suppression of facts with intention to evade payment of duty attracting the ingredients for invocation of extended period. In such event, the demand for the extended period with respect to the issues which are not contested on merits requires to be set aside as being time barred - the appellant is liable to pay the duty demand falling under the normal period. Penalties also set aside. Appeal allowed by way of remand. - E/00327/2012 - Final Order No. 42390/2018 - Dated:- 6-9-2018 - Ms. Sulekha Beevi C.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TOTAL 11871831/- 2. Accordingly, a Show Cause Notice was issued to the appellants, inter alia proposing recovery/demand of the aforesaid disputed CENVAT Credit/Central Excise Duty with interest thereon as also imposition of penalty under various provisions of law. In adjudication, the Commissioner vide the impugned Order dated 20.01.2012 confirmed the demand of the amounts proposed in the Show Cause Notice with interest and also imposed penalty equal to the total amount demanded under Rule 15(2) of the CENVAT Credit Rules read with Section 11AC of the Central Excise Act, 1944. Hence, this appeal. 3.1 When the matter came up for hearing, the appellants represented by Shri. Santhana Gopalan D. submitted that they are not contesting the following liabilities on merits. Sl. No. Issue in dispute Amount (in Rs.) I Non-reversal of CENVAT Credit attributable to inputs, viz. Cement, wire mesh, coal tar, enamel, paint thinner, epoxy paints, inner wraps, and outer wraps, etc., used in manufacture of exempted pipes [2009-10] 19,88,92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of dispute and have indicated the amount of CENVAT Credit that has been reversed. He also submits that non-reversal or non-payment of proportionate credit amount on filler ware and other consumables used in the manufacture of pipes was only due to inadvertence. For these reasons he submits that there cannot be any justification for imposition of penalty. Ld. Advocate also submits that they have paid 5% of the value of exempted final product. However, that payment has not been taken into account while computing the demand in respect of credit availed on HR Coils. Hence, even if the demand on this issue is to be confirmed for argument s sake, the same would be required to be re-computed. 4.1 On the other hand, Ld. AR Shri. A. Cletus supports the findings in the impugned Order. In respect of the demand of ₹ 41,77,866/- in respect of HR Coils, Ld. AR submits that they are a job worker who has received specific order for manufacturing the pipes which they knew right from the beginning were not exempted. Hence, they should not have taken credit ab initio on the HR Coils received from the principal manufacturer or even those which they have procured on behalf of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the cost of material plus processing charges prior to 1-4-2007 when the provisions of Rule 10A were inserted into the Central Excise Valuation Rules, 2000. It is also undisputed that the said LABSA is returned back to M/s. HUL for further consumption in their factory premises for manufacturing of soaps and detergents. It is nobody s case that LABSA consumed by HUL is on behalf of the appellant herein. 7. On these factual matrix we need to appreciate the provisions under Rule 10A, which is reproduced herein under :- RULE 10A. Where the excisable goods are produced or manufactured by a job-worker, on behalf of a person (hereinafter referred to as principal manufacturer), then, - (i) in a case where the goods are sold by the principal manufacturer for delivery at the time of removal of goods from the factory of job-worker, where the principal manufacturer and the buyer of the goods are not related and the price is the sole consideration for the sale, the value of the excisable goods shall be the transaction value of the said goods sold by the principal manufacturer; (ii) in a case where the goods are not sold by the principal manufacturer at the time of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue s case that provisions of Rules 3, 4, 5, 6 and 7 would also apply in this case. Revenue is of the view that provisions of Rule 8 will apply. In order to understand the Revenue s case, we reproduce the provisions of Rule 8. RULE 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be [one hundred and ten per cent] of the cost of production or manufacture of such goods. 7. The ratio of above decision is applicable to the present case also. 8. Following the same, we are of the view that the impugned orders are not sustainable and the same is set aside. The appeals are allowed with consequential relief if any. 6.2 We find that the above ratio is applicable on all fours to the facts on hand. Hence, we hold that the demand of ₹ 40,70,960/- with interest, cannot be sustained and is, therefore, set aside . So ordered. 7.1 Coming to the issue on ineligible credit availed on HR Coils involving demand of ₹ 41,77,866/-, we find that the HR Coils were used only in manufacture of water pipes which were not in the exempted or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants would very well be required to reverse the amount of CENVAT Credit of ₹ 41,77,866/- availed in respect of such HR Coils. 7.6 It is submitted by the Ld. Counsel for appellant that the appellants have reversed 5% of the value of the exempted goods. Hence, we are of the view that the appellant has to be given adjustment of the amount already reversed as above. For this limited purpose of re-quantification of demand on this issue, after giving adjustment of the amount already reversed by the appellant, we remand the matter to the adjudicating authority. 8.1 With regard to the issues which the appellant is not contesting on merits and show in the table in para 3.1, the Ld. Counsel for appellant advanced arguments on the ground of limitation. He submitted that the appellants had maintained separate records with regard to HR Coils that were used for the manufacture of exempted goods. All the figures for raising demand have been adopted by the Department from the accounts maintained by the appellant. Thus, in their statutory records, the appellants have disclosed the entire details. 8.2 So also, the credit availed was disclosed in the ER-1 returns. They happen to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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