TMI Blog2018 (11) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 11-A of the Central Excise Act are not applicable as it is not a case of short payment of duty, non-payment of duty or erroneously refund of duty - SCN issued u/s 11A not sustainable. Denial of CENVAT Credit on the basis of the test report of inputs - Held that:- It is admitted by the Revenue that the appellant has received the inputs and in terms of Rule 3 of the Cenvat Credit Rules, 2004, the asseesse is entitled to take cenvat credit of duty paid on inputs. It is in material whether the inputs are as per test report or not - Credit allowed. Appeal allowed - decided in favor of appellant. - Appeal No. E/1888/2011 - A/63197/2018-EX[DB] - Dated:- 27-8-2018 - Mr. Ashok Jindal, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri. T.R. Rastaugi, Advocate- for the appellant Shri. G.S. Dhillon, AR- for the respondent ORDER Per Ashok Jindal: The appellant is in appeal against the impugned order. 2. The facts of the case are as under: 1.1 The appellant located in the area specified under the exemption Notification No. 56/2002-CE in the state of Jammu Kashmir and manufacturing the goods specified in this notificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l duty payable and if the cenvat credit available at the end of the month is less than the total duty payable, the quantum of exemption would be the difference between the duty payable and cenvat credit available, subject to the cap of the duty on the value addition specified in Col. 4 of the Table in para-2. 2. The period in dispute in this case is from 2005-2006 to 17.07.2009. There are three allegations against the appellant:- (1) During this period, they inflated their production figures inasmuch as the production shown in their RG-1 Register is much higher than the production ascertained on the basis of the records of the labour contractor. On this basis, the department has alleged that the appellant by showing inflated production have received higher quantum of exemption in form of refund. On this ground, duty demand of ₹ 83,79,234/- is based. (2) During period from 11.06.2009 to 17.07.2009, the pulverizing machinery installed had been un-installed and sent out for repairs; but even during this period the appellant have recorded production, which is not possible. On this count, duty demand of ₹ 60,99,118/- is based; (3) The appellant have availed Cenva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntention that the case of the Revenue is that the samples of inputs were not as per the test report, therefore, the same cannot be input for the appellant. Admittedly, the appellant has used these inputs for manufacturing of their final product which has been cleared on payment of duty, moreover, in terms of Rule 3 of the Cenvat Credit Rules, 2004, and the assessee is entitled to take cenvat credit of duty paid on inputs. Admittedly, these inputs are duty paid, therefore, the appellant is entitled to take cenvat credit thereon. 6. On the other hand, the Ld. AR opposed the contention of the ld. Counsel and submits that after passing the assessment order, the Revenue can issue show cause notice under Section 11-A of the Act. It is his submissions that it is a case of excess refund claimed by the appellant which was not entitled to claim refund. Therefore, the appellant was not entitled for the said refund which is refunded to them, which is recoverable by way of issuance of show cause notice under Section 11-A of the Act. He also submitted that during the course of investigation, various statements were recorded and in those statements, it is admitted fact by the appellants that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him to show cause why he should not pay the amount specified in the notice : Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, as if, for the words one (Emphasis supplied). year, the words five years were substituted : A bare reading of Section 11A of the Act indicates that power can be exercised only if duty has not been levied or paid or has been short-levied etc. on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act . Insofar as the present case is concerned, the only issue that arose for consideration was whether the assessee was entitled to the benefit of Notification No. 33/99-C.E., dated 8-7-99. There was no issue of any approval, acceptance or assessment relating to the rate of duty nor was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant and the appellant have taken self credit of the same whether the provisions of Section 11AC of the Act are applicable or not? We find that the said issue has been settled by this Tribunal in the case of Jindal drugs Ltd. vide Final Order No. A/61994/2018 wherein it has been held that whether the appellant was not liable to pay duty, therefore, the provisions of Section 11-A of the Central Excise Act are not applicable as it is not a case of short payment of duty, non-payment of duty or erroneously refund of duty, therefore, the show cause notice issued to the appellant under Section 11-A of the Act is not sustainable. Issue No. 3 (c) Whether cenvat credit can be denied on the basis of the test report of inputs or not? We find that it is admitted by the Revenue that the appellant has received the inputs and in terms of Rule 3 of the Cenvat Credit Rules, 2004, the asseesse is entitled to take cenvat credit of duty paid on inputs. It is in material whether the inputs are as per test report or not. It is fact on record, the appellant has used these inputs for manufacturing of their final product. In that circumstances, cenvat credit cannot be denied, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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