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TMI Blog2019 (2) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... customers viz. M/s. Hyundai Motors, M/s. Hyundai Plaza, M/s. Ford India, M/s. Mobis India etc. without payment of central excise duty to the tune of Rs. 41,15,705/- during the period from 1.4.2006 to 28.2.2010 under delivery challans as per Annexure A3 to the Notice * The assessee had received certain goods from their customers as rejected goods and have taken CENVAT credit. In few cases, they have cleared the rejected finished goods as scrap and failed to pay the differential duty to the tune of Rs. 11,90,475/- i.e.. difference between the CENVAT credit availed on rejected finished goods and duty on the scrap value, as per Rule 16 of Central Excise Rules, 2002 during the period from 1.4.2006 to 28.2.2010 as per Annexure A4 to the notice. * The assessee had manufactured certain tools for M/s.Mahindran Renault and issued invoices but failed to pay appropriate excise duty to the tune of Rs. 7,13,683/- during the period from 1.4.2006 to 28.2.2010 as per Annexure A5 to the notice. 2. After due process of law, the adjudicating authority confirmed the demand along with interest and also imposed penalty. Aggrieved, the appellants are now before the Tribunal. 3.0 On behalf of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inputs are brought back from Panelpina Warehouse to the factory for use in manufacture. This credit would have been eligible and would have been utilised towards excise duty payments. To have followed the process as demanded by the Department in the instant case would have only resulted in more scriptory work to the assessee as well as to the Department, with no revenue leakage as even a distant consequence. 3.6 The Appellant submits that the decision of the Tribunal in Commissioner of C. Ex., Rajkot vs. Reliance Industries Ltd. reported at 2008 (224) E.L.T. 117 (Tri. - Ahmd.) wherein the Tribunal noted that as the demand was available as credit to the Appellant, denying exemption would have added in more scriptory work to the assessee, without resulting in any revenue earning to the Department or revenue loss to the assessees. The above decision was relied upon by this Tribunal in Vodafone Essar Cellular Ltd. vs. CCE&ST, Coimbatore vide Final Order No. 40972/2018 dt. 01.03.2018. It is also settled law that when the exercise is academic with no revenue implication, the proceedings merit to be dropped. Reliance in this regard is placed on CCE v. Indeos ABS Ltd. [2010 (254) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said final products. However, the finished goods are sent out so that the customer may test the said final products, and then place Purchase Orders on the Appellant on the basis of parameters as satisfied by the samples provided by the Appellant. As there is no allegation that the said finished goods were not received back by the Appellant, or that even a part of them escaped duty at the time of clearance for sale, the Appellant submits that the demand is wholly misplaced and must be set aside. 3.11 The demand for excise duty on repair work done for customers is not sustainable as the said repairs do not amount to manufacture. The Appellant submits that finished goods are received from customers for carrying out repair work. These are sent back to the customers after executing repairs. Such repairs do not amount to manufacture, and therefore, no excise duty is liable to be paid. The Appellant submits that Excise Duty is liable to be paid only where manufacturing activity is undertaken on the goods. It is well-settled that onus of proving that manufacture has been undertaken rests on the Department. Reliance is placed on Flex Engineering Ltd. v. CCE [2012 (276) E.L.T. 153 (S.C.)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one under the cover of appropriate documentation such as Rule 4(5)(a) challans, etc. All the necessary information was gathered by the Department upon verification of the internal records of the appellant which itself shows that due disclosures had been made. The impugned order has invoked extended period on the sole ground that the appellant has voluntarily paid the entire duty. The order does not bring out any case apart from this to prove suppression or mala fide intention on part of the appellant. It is settled law that for invocation of extended period, there ought to be positive act on the part of the appellant. In this regard, reliance is placed on Continental Foundation Jt. Venture v. CCE [2007 (216) E.L.T. 177 (S.C.)]. In the present case, the department having failed to establish the same, extended period is not invokable. Therefore, if at all, the demand ought to be restricted to the normal period, i.e., from 01.02.2010 to 28.02.2010. 4. On behalf of Revenue, ld. AR Shri B. Balamurugan supported the findings in the impugned order. He submitted that the inputs were received in the factory, the appellant have availed credit and thereafter have returned it to the warehouse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsal of credit as under 3(5) of CENVAT Credit Rules, 2004. The credit is availed only when entire quantity of inputs as per an invoice is used for manufacture. The allegation therefore that the appellants are liable to pay credit of Rs. 92,64,820/- cannot sustain. As rightly argued by the ld. Counsel, the strict compliance of provision of law by reversing the credit, each time when the inputs are sent to the warehouse due to space constraints would only add more accounting work. Since there is no revenue loss from such acts of the appellants and is only a procedural infraction, we consider that the demand cannot sustain. The Tribunal in the case of Reliance Industries Ltd. (supra), in a similar situation, held that when there is no revenue loss and the procedure would only add more scriptory work to the assesse, the demand would not sustain. For the discussions made above, we hold that the demand on this score to the tune of Rs. 92,64,820/- requires to be set aside, which we hereby do. 6.2 The differential duty of Rs. 11,90,475/- has been demanded under Rule 16. The appellant undertake repair of rejected goods which are returned by customers. They avail credit in terms of Rule 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount equal to cenvat availed on the returned goods. Accordingly, the demand is set aside in the assessee's appeal. Consequently, they are not liable for any penalty and the same is also set aside." Following the above decision, we hold that the demand cannot sustain and requires to be set aside, which we hereby do. 6.3 An amount of Rs. 40,85,299/- has been demanded on various grounds which can be summarized as under, as tabulated by appellant:- Issue Particulars of Demand Duty demanded (INR) Goods sent to customers for testing Goods are supplied to customers on Just-in-Time Basis, due to which the customer carries out sample periodical testing, inspection and verification instead of testing every spare parts as and when supplied. Sample are sent to customers for such testing under RDC and are received at the appellant's factories that very day or the next day. 50,917/- Goods returned to customers after repairs Components supplied to customers are returned to appellant for repair work, under RDC as per Rule 4(5)(a) of the Credit Rules. Appellant carries out repair work and then supplies the repaired commodities to customers under its RDC 4,42,938/- Goods sent out fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provision of law. Interestingly, the demand of excise duty is not on job worked goods and instead the demand of excise duty is on inputs / capital goods which are sent for job work which, in our view, is incorrect and cannot sustain and is liable to be set aside, which we hereby do. 6.7 An amount of Rs. 18,06,561/- is raised alleging that there is delay in issuing invoices. From the facts brought out before us, it is seen that in certain circumstances when there was failure in the system, the appellant had delayed raising the invoices, though the goods were cleared. In such situation, they have cleared goods under RDC and then subsequently raised the central excise invoice. In fact, there was no delay in payment of central excise duty and duty was paid when goods were cleared. There was delay in raising the invoices only. This has occurred only due to some technical fault in system to raise invoices for which the assessee cannot be burdened with demand of excise duty. It is not the case of department that duty was not paid when goods were cleared. The said demand therefore requires to be set aside, which we hereby do. 7. From the discussions made above, the appeal is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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