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2018 (10) TMI 160

Held that:- During the disputed period, invoices for clearance of goods from the factory were required to be done so under cover of an invoice in conformity with Rule 11 of the erstwhile Central Excise Rules, 2002. A number of details were required to be compulsorily indicated on such invoices including Central Excise Registration, Duty payment details, etc. It is pertinent to note that none of the invoices recovered at the time of visit of the officers indicated any of these particulars, leave alone details of duty payment. - From the facts on record it also emerges that none of the records available at the time of visit contained any details or documentations of such discharge of duty liability nor was any proof of such duty payment produced at the time of visit of the officers. - The Show Cause Notice dated 02.02.2005 while referring to CENVAT Credit availment of ₹ 15,34,147/- and ₹ 1,18,544/- (AED(T)) by the appellants as shown in their ER-3 returns filed on 03.02.2004, has however found fault with some of the availments based on alleged ineligible documents like invoices issued by depot which is not registered, invoices not issued as per Rule 11 of the Ru .....

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03 wherein it was seen that appellant had taken CENVAT Credit to the tune of ₹ 15,34,147/- (CENVAT) and ₹ 1,18,544/- (AED(T)) and shown as utilized part of the credit for the purpose of payment of duty on the final products cleared from the factory. It appeared to the Department that out of the above, appellants had taken CENVAT Credit to the tune of ₹ 6,98,444/- on the inputs received during the period from 01.04.2003 to 31.12.2003 based on allegedly ineligible documents. Accordingly, the said Show Cause Notice dated 02.02.2005 proposed disallowance and recovery of such CENVAT Credit allegedly taken wrongly by appellant amounting to ₹ 6,98,444/- with interest thereon as also imposition of penalties under various provisions of law. 3. In adjudication, both these Show Cause Notices were confirmed by the Original Authority vide Orders dated 01.04.2006 and 14.02.2006 respectively. In further appeal, the Commissioner (Appeals), vide Orders-in-Appeal dated 29.08.2006 and 28.08.2006, had dismissed the appeals for non-compliance of stay order. On further appeal to CESTAT, Chennai vide Final Order Nos. 91 and 92/2007 dated 31.01.2007, the matter was remanded to the .....

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s fact, the cum duty benefit may kindly be extended to them. (iii) The Show Cause Notice in para 2 admits the fact that the goods were sent to job worker i.e., for knitting into grey fabric and for dyeing and also for manufacture of garments under delivery challan. Therefore, in this case, the actual manufacturer is the job worker and not the appellant. Hence, the demand, if any, can only be on the job worker and not on the appellant. This is an alternate plea. (iv) Denial of CENVAT Credit to the extent of ₹ 6,98,444/- cannot be a reason for demanding duty again. In other words, once a demand for CENVAT Credit is made, again duty cannot be demanded to this extent on the ground that CENVAT Credit utilized for payment of duty was disallowed. This amounts to double taxation, once demanding CENVAT Credit and second time by demanding duty. If CENVAT Credit is repaid, that itself will amount to payment of duty and there should not be a separate demand for duty. The Hon ble Tribunal in the case of Tiwati Sugar Complex Vs. C.C.E., Meerut - 2009 (247) E.L.T. 519 held that it is not proper to demand duty once on the ground that the credit has been taken wrongly and then again on the gr .....

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es, 2002. No basic documents required for monitoring day-to-day transactions or payment of duty were available or produced at the time of visit. Only after 11 months from the date of registration of unit and well after detection of offence, the appellants had filed the ER-3 returns in the month of February, 2004. While filing the returns, it was shown as if they had taken the CENVAT Credit to the tune of ₹ 15 lakhs and utilized a part towards payment of duty. Only after taking all these aspects into account in the de novo adjudication also the adjudicating authority had confirmed the amount of ₹ 12,30,993/- with interest and had also disallowed CENVAT Credit to the tune of ₹ 6,98,444/-. 5.2 The Ld. AR points out that the Commissioner (Appeals) had upheld the demand of ₹ 12,30,993/- in respect of the goods cleared by them, however, has given considerable relief to the appellants and allowed appropriation of CENVAT Credit of ₹ 9,54,247-/ not disputed in the Show Cause Notice dated 02.02.2005 against the said demand. Ld. AR therefore submits that the impugned Order is there very fair and just and does not require any interference. 6. Heard both sides and .....

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invoices issued prior to the date of registration, amounts to ₹ 6,98,444/- only. Thus, less than half of the amount claimed as CENVAT Credit by the appellant in their ER-3 returns amounting to ₹ 6,98,444/- was disputed by the Department. 9.2 We find that in response to a Departmental letter requesting to produce documentary evidence for passing on credit to appellant, a major supplier M/s. Kesharinandan Knit Fabrics (P) Ltd. vide their letter dated 14.05.2010 have submitted ledger copies, certificates issues regarding the credits, copy of their returns, etc. We find from the details submitted by the said supplier that they have also indicated the name of the manufacturer from the Original manufacturer of the goods which had then been supplied to the appellant; the corresponding CENVAT Credit involved is ₹ 6,72,504/-, which is the predominant portion of the disputed amount, has thus been satisfactorily explained by the supplier of the inputs. Even the remaining disputed credit of ₹ 25,305/- relating to invoice issued by supplier depot which was not registered and ₹ 635/- relating to invoice issued by a supplier before registration, are all curable defec .....

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