TMI Blog2018 (11) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... t of employee - demand upheld. Exemption under N/N. 67/95-CE dated 16.03.1995 - appellant have manufactured and used sofa within their factory for captive consumption on which demand was raised - Held that:- Since the sofa was used in factory’s office, and the same being on capital goods is entitled for exemption under Notification 67/95-CE dated 16.03.1995., accordingly, the sofa manufactured and used within the factory is exempted under the said Notification - demand set aside. CENVAT credit - demand confirmed on the goods cleared by the appellant on non returnable gate passes without reversal of cenvat credit - Held that:- The appellant has not disputed the demand, however they only pleaded that the non reversal of credit is not due to intention but only due to clerical error - demand upheld. Penalty (on all issues mentioned above) - appellant strongly submits that wherever there is non payment of duty/ non reversal of credit, as explained in their submission it is not due to malafide intention but only due to clerical error, therefore penalty should not be imposed - Held that:- As per the explanation given by the appellant and the facts of the case for each and every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the vehicle number, the clerical error has occurred - credit cannot be denied - demand set aside. CENVAT Credit - credit denied by the lower authority on PVC/coated fabric on the basis of invoice raised by M/s Responsive Industries Ltd. - Held that:- There is no dispute that the inputs were recorded in the statutory record and books of account, therefore, merely because in the consignee column appellant’s name is not appearing, credit cannot be denied - demand set aside. Penalty on director of the appellant company Sh. Pulin J shah u/r 26 - Held that:- Firstly, the majority of demand has been set aside and remaining the demand is only due to clerical error which has been paid along with interest, consequently, the appellant has not directly dealt with the goods which is liable for confiscation - It is also undisputed that the SCN has not proposed confiscation of any goods on which excise duty was escaped, for this reason also the penalty on Sh. Pulin J. shah, Director of the appellant company cannot be sustained - penalty set aside. Appeal allowed in part. - E/10683, 10685/2018-SM - Final Order No. M/12606-12607/2018 - Dated:- 19-11-2018 - SHRI RAMESH NAIR, MEMBER (JU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Upadhyay, security guard 24.11.14 1,88,556/- 2 The nm size of MDF Board(inputs) in gate register is different from invoice Supplier s Invoices and receipt voucher prepared by appellant 24,65,827/- 3 Vehicle number was fake goods had been not received from K.P. Foam In voice No. 124 and 125 dt.14.6.14 mentioned vehicle number GJ3AF 8382- which is non-existent (actual number GJ3AX8382) 12,229/- 4 PVC/coated fabric on basis of invoice raised by M/s Responsive Industries Ltd but the appellant not shown as consignee Invoice mentions consignee as Karishma Sales Corporation but delivery address shown at the Appellant s factory . Transport details not available 6,14,446/- Total 32,81,058/- The adjudicating authority confirmed the above demand and imposed penalties along with personal penalties upon Sh. Pulin J. Shah Director of the Company under Rule 26 of Central Excise Rule, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise invoices gate passes, but without reversal of Cenvat Credit. In respect of this, he submits that it is essential to know that it is mere clerical error on the part of the appellant. The person handling these transactions was not well versed with technicalities and since this was not regular transaction, especially since it was not finished goods produced, no compliance was made in this regard by concerned person. For such error, the dealing person was relieved from his duty and removed from employment. E) As regard Serial No. 5, he submits that since sofas were used in the appellant s administrative Office therefore, the same was exempted Notification No. 67/95-CE dated 16.03.1995 which provides exemption under to all capital goods and specified inputs if captively consumed within factory of production. Since, said sofas were admittedly used captively by the appellant and the same was not cleared out of the factory premises, hence the duty cannot be demanded. F) As regard, Serial No. 6, he submits that the impugned order demanded reversal of Cenvat Credit of an amount of ₹ 1,00,839/- on the ground that appellant had cleared excisable and non excisable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same time, the exact MM never received and as per commercial grade, the variation in the MM thickness of board is a common practise in the industry. For e.g., board 10 MM is generally accepted to be of grade of 12 MM only. In that sense, the records are also maintained as such in specified MMs as per BOM as required for the production purpose. He further submits that it is general practise of trade that for e.g. where thickness of 12 MM of MDF board is required two boards of 6MM are joined together in order to obtain the same thickness. If any discrepancy in the thickness is found, it is merely on account of such stapling of MDF boards together. Practically the appellant receives MDF boards of 6MM from their customer, but as per the requirement, they joined 2 sheets together by stapling or nailing and obtain the required thickness of 12 MM and record the same as sheet of 12 MM in their inventories which ultimately lead to recording of half the quantity received. By impugned order it has not appreciated this aspect of the trade and conclude that the appellant have not received the goods covered under the invoice. In this regard the appellant annexed CA certificate certifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponsive Industries ltd, the invoice mentioned name of consignee as M/s Karishma Sale Corporation. He submits that the appellant s name is appearing as delivery address i.e. appellant factory, therefore, which shows the delivery of goods was made at the appellant s factory, hence credit cannot denied. He further submits that even though the statement recorded under section 14 were retracted but the appellant also requested for cross-examination whereas persons whose statement were recorded, the adjudicating authority has denied requested for cross-examination. In this position, the statement cannot at all be relied upon for confirming the demand. He further submits that as per the facts involved in the case and statement made in above, the substantial interpretation of statutory provision are involved, therefore, the bonafide views of the appellant in this regard are well supported vide catena of orders and decisions cited in this regard. Thus, it is not correct to state that the appellant had any malafide intention to evade payment of duty and had suppressed any material fact from the department. Therefore, no penalty as well can be imposed against them. As regard personal penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e variation/ short receipt of raw material and credit sought to be denied. As per the submission of Ld. Counsel, the debit note is towards compensation nature of non-lifting of goods as per the ascertained terms of contract. I agree that the compensation is not part of value of goods whereas the same is on the form of penalty for non-lifting of the goods, hence the same cannot be liable to excise duty. Ld. Counsel also submits that at the most, this could constitute as declared service, therefore on this amount excise duty is not attracted. Accordingly, the demand of ₹ 59,964/- on this count is set aside. 3. As regard serial No. 3, the duty was demanded on some invoices which were not included in the list of invoice. The demand for payment of duty and consequently it is alleged that under the said invoice, finished goods were cleared clandestinely. The appellant submits that these are the Performa invoices under which no actual transaction was taken place. It is submission of appellant that the Proforma invoices were issued as a part of introduction of new accounting system. I find that the said invoice which was alleged to have been issued for removal of goods clandestine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit, as explained in their submission it is not due to malafide intention but only due to clerical error, therefore penalty should not be imposed. I find that as per the explanation given by the appellant and the facts of the case for each and every goods there are one or other document available on record, therefore it cannot be said that the appellant had malafide intention, accordingly, they made out a good case for waiver of penalty. Accordingly, I set aside the penalty corresponding to the duty upheld in the above para. Issue No. 2 1. Under issue no 2. against serial No.1, the demand of ₹ 1,88,656/- was confirmed towards cenvat credit of inputs said to have not been received on the ground of statement given by Sh. Rajesh Kumar Upadhyay, Security Guard and non mention of invoice in the gate register. In this regard, I find that the statement of Sh. Rajesh kumar Upadhyay is not conclusive as he stated in general that he enters each and every consignment in the gate register. However he did not explicitly pointed out that invoice which is not entered in the gate register, the goods of said invoices were not received, except this there is no other evidence. There i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department could not adduce any evidence, moreover it is fact that vehicle number GJ3AX 8382 is correct as per RTO record. Therefore, it is obvious and while mentioning the vehicle number, the clerical error has occurred. Ld. Counsel in this regard also submits that the appellant had procured regularly goods from the same supplier M/s KP Foam. Accordingly, in my considered view, only for minor mistake in mentioning vehicle number it cannot be concluded that the inputs mentioned in the invoice was not received by the appellant. Accordingly, the demand of ₹ 12,229/- is set aside. 4. As regard, serial no. 4, the cenvat credit of ₹ 6,14,446/- was denied by the lower authority on PVC/coated fabric on the basis of invoice raised by M/s Responsive Industries Ltd. The only reason for denial of credit is that in the invoice, in the column of consignee, the name of M/s Karishma Sales Corporation is mentioned, however in the same invoice at the delivery address, appellant s factory address is mentioned. In this fact it is clear that the goods were meant for delivery at appellant s factory. Moreover, there is no other evidence produced by the department to show that the goods w ..... 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