TMI Blog2019 (2) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... ER - Held that:- The said issue has been decided in the case of Tube Investments of India Ltd. Vs. Commissioner of Central Excise, Chennai [2017 (10) TMI 1320 - CESTAT CHENNAI], where it was held that From the reading of the Rule 7 (4) of CENTRAL EXCISE RULES, 2002 it is seen that interest is payable only when any amount is payable consequent to the order for final assessment. When no amount is to be paid consequent to the order of final assessment, sub-rule 4 is not attracted at all - demand do not sustain. Demand to the tune of ₹ 50,917/- is in respect of central excise duty when the goods have been supplied by appellant to customers for periodical sample testing - Held that:- The appellants are duty bound to discharge the duty when the goods are cleared from the factory for testing. The appellant contends that they have discharged duty whenever finished product was cleared. However, this requires verification - matter on remand. An amount of ₹ 4,42,938/- is the demand of excise duty in respect of components supplied to customers and which are returned to appellant for repair work under RDC as per Rule 4(5)(a) of CENVAT Credit Rules - Held that:- It is brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssembly, shock assembly to their 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 ₹ 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 ₹ 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been available to them again at the time when the returned 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t submits that the case of the Department herein is not that no excise duty was paid on the 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 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due permission for the department and under proper documentation. The other transactions were also done 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 rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocurement of inputs. When the inputs are brought to the factory since credit is not availed, there is no requirement of reversal 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 ₹ 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 ₹ 92,64,820/- requires to be set aside, which we hereby do. 6.2 The differential duty of ₹ 11,90,475/- has been demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P) Ltd. case, which relied M/s. Apollo Tyres (P) Ltd. case, we hold that in the present case, the second leg of sub-rule (2) of Rule 16 i.e. in any other case is applicable and they had correctly discharged excise duty on the returned goods cleared as such. The appellants are not liable to pay the 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n our view, this issue also requires reconsideration by adjudicating authority. Needless to say that if the activity of repair does not amount to manufacture, the demand would not sustain. This issue is therefore remanded. 6.6 An amount of ₹ 17,84,883/- is seen to be a demand of excise duty raised when the appellant has sent inputs / capital goods for further processing or for tool grinding purposes to job workers under RDC. It is submitted by ld. counsel that the said goods were sent under Rule 4(5)(a) of CENVAT Credit Rules and received within 180 days. The department also has admitted that such goods are cleared under the 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 ₹ 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, thou ..... 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