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2019 (8) TMI 314

..... ters of the appellant were called for scrutiny while their application for sanction of rebate claim was being examined - credit has been availed on the documents of SIL/SCPPL - HELD THAT:- It has been pointed out by the appellant that each page of register also contains ECC Code of appellant. Appellant have explained that two separate registers maintained by them in respect of inputs received from two different clients and thus there is no error in mentioning the names of their clients in the Cenvat registers. There is no prescribed format for making such registers and there is no law which debars the appellants from maintaining separate registers for two different clients. In these circumstances the allegation in the notice and in the impugned order that the Cenvat credit taken and utilized from the said two registers does not belong to the appellant is misplaced - if the Revenue believed that the said registers did not belong to the appellant and in fact belonged to SIL and SCPPL, then the same could have been essentially verified from the other financial record of the appellant. There is no scrutiny of other financial records done and therefore, the allegation remains unsubstant .....

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..... rder passed and consequently, penalty on SIL and SCPPL and Shri R.L. Shetty is set-aside - As regards penalties on Shri Tushar Patel, Shri Bipin Patel and Shri Harish M. Patel, employees of M/s. Agro Pack Limited, the matter is remanded for determination of penalty, after examining the facts in respect of wrong availment of credit, if any. Appeal allowed in part. - Excise Appeal No. 11302 of 2014, 11334 of 2014, 11335 of 2014, 11336 of 2014, 11337 of 2014, 11338 of 2014, 11339 of 2014 - A/11463-11469/2019 - 5-8-2019 - MR. RAMESH NAIR, MEMBER (JUDICIAL) And MR. RAJU, MEMBER (TECHNICAL) Shri V. Sridharan, Sr. Advocate with Shri Anand Nainawati, Advocate for the Appellants Shri T.G. Rathod, Joint Commissioner for the Respondent ORDER RAJU These appeals have been filed by the following appellants against the duty or penalty imposed against them:- S. No. Appeal No. Appellant Duty (in Rs.) Penalty (in Rs.) 1. E/11302/2014 Agro Pack Limited (Unit-II) 34,58,84,344/- 34,58,84,344/- 2. E/11334/2014 Shri. R.L. Shetty (Employee of Syngenta India Limited.) - 5,00,000/- 3. E/11335/2014 Syngenta Crop Protection Pvt. Limited - 1,00,00,000/- 4. E/11336/2014 Syngenta India Limited. - 1,00,00,000/- 5 .....

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..... appellants are maintaining all the statutory records party wise i.e. to say separate Cenvat Register of Principals SIL, SCPPL and maintaining separate RG-1 register and PLA Account etc. The appellants receive inputs which are procured locally or are being imported by SIL and SCPL. In respect of the goods procured locally, SIL, Royal Insurance Building, 14, J. Tata Road and SCPL, Royal Insurance Building, 14, J. Tata Road were shown as buyers of the goods in the sale invoices. However, goods are consigned to the appellants. Some invoices under which inputs are consigned by input supplier to the Appellants showing buyer/consignee were also produced. He claimed that there is no dispute that aforesaid inputs were received by the Appellants and were used by them in the manufacture of insecticides/pesticides cleared to SIL or SCPPL. He submits that SIL and SCPPL were also importing certain major raw materials which are consigned to the appellants. Bills of Entry for Home Consumption are filed by SIL or SCCPL and the name of the appellants is declared on such bills of entry (address of Unit-I continued to be referred by CHA in some cases) and goods are delivered from port to Unit-II of t .....

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..... do not belong to the Appellants. 2 ₹ 7,60,14,689/- Credit is denied as per Annexure-B to the show cause notice on inputs received under Bills of Entry on the ground that same are in the name of SIL/SCPPL and therefore not a valid document. 3 ₹ 1,18,55,284/- Credit is denied as per Annexure-C to the show cause notice on inputs procured locally on the ground that goods are not owned by Appellants but belongs to SIL and SCPPL. 4 ₹ 36,20,302/- Denial of credit as per Annexure-D to the show cause notice on inputs procured from 100% EOU on the ground that same is availed in excess. 5 ₹ 4,75,860/- Cenvat Credit has been availed twice. 5. He pointed out that Cenvat credit is mainly denied to the appellants by alleging as under:- (a) Invoices on which Cenvat Credit has been availed, mentions the consignee as: (i) M/s Syngenta India Limited, C/o Agro Pack, Plot No. B/155, GIDC, Ankleshwar; (ii) M/s Syngenta Crop Protection Pvt. Limited, C/o Agro Pack, Plot No. B/155, GIDC, Ankleshwar; (iii) M/s Syngenta India Limited., At Agro Pack, Plot No. B/155, GIDC, Ankleshwar; (iv) M/s Syngenta Crop Protection Pvt. Ltd., At Agro Pack, Plot No. B/155, GIDC, Ankleshwar; (v) M/s A .....

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..... a document to be eligible for availing credit is that such document should evidence payment of duty. The proviso to the rule also makes it clear that the Cenvat credit is not to be denied even if some of the information is missing, subject to the condition that the Deputy/Assistant Commissioner is satisfied that the goods have been received and accounted for in the books of accounts of the receiver. He argued that there is no dispute that all the requisite particulars are contained in the invoices issued. He argued that while the said proviso inter alia, requires mentioning of the details regarding the supplier of inputs/provider of input service, issuing the invoice, there is no requirement to mention the name of the consignee. The Rule nowhere states that the name of the person availing Cenvat credit must be mentioned on the invoices. In the present case, SIL and SCPPL were the buyers of these goods and therefore, their names are mentioned in the invoices. 7. He argued that there is no condition in the Cenvat Credit Rules, 2004 that the documents for availing of Cenvat credit must be issued in the name of the person availing the Cenvat credit or the ownership of the goods must v .....

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..... d vs. CCE - 2008 (232) ELT 802 He also relied on the Board Circular No. 766/82/2003-CX dated 15.12.2003 wherein the following has been prescribed :- On the issue availment of credit by the user-manufacturer, it is clarified that action against the consignee to reverse/recover the CENVAT Credit availed of in such cases need not be resorted to as long as the bonafide nature of the consignee s transaction is not in dispute. He argued that the manner in which the Cenvat Registers are, maintained is not the determinative factor for availment of credit. 9. He argued that the demand of cenvat credit totally ₹ 36,20,302/- has been raised on the ground that in some cases, credit has been taken in excess on the basis of the invoices issued by the 100% EOUs than the actual amount of credit available as per the formula given under Rule 3(7) of the Cenvat Credit Rules, 2004. He argued that they contest the entire demand of ₹ 36,20,302/- on limitation and merits in as much as it has not been mentioned anywhere in the show cause notice that under which formula the appellants was required to avail cenvat credit. Even no formula has been referred in the show cause notice on the basis of .....

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..... the name of SCCPL. On the strength of these registers, where the name of SIL and SCPPL were replaced by the name of appellant, it was alleged that the entries made therein and the credit taken in the register does not belong to the appellant but the same belong to SIL and SCPPL. Consequently, the duty paid while clearing goods manufactured by appellant by using credit taken in the said registers was sought to be demanded as duty not paid. It was alleged that the debits made in the said registers do not amount to duty payment as the register did not belong to appellant but the same belong to SIL and SCPPL. It is nowhere disputed that appellants are engaged in the manufacturing of pesticides on job work basis for SIL and SCPPL. The appellants have claimed that they were receiving various raw materials directly or indirectly from SIL and SCPPL. 12.1. It has also been asserted by way of an affidavit of Shri Sanjay Rout, Sr. Manager, Indirect Taxation of both SIL and SCPPL that they ahd authorized appellant in terms of Notification No. 27/92-CE(NT) dated 09.10.1992 to manufacture products on behalf of SIL/SCPPL and comply with all legal provisions. He describes the procedure of account .....

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..... uty Payment A/c Cr. Excise duty Liability A/c Excise duty payment Excise duty liability is discharged by Agro Pack net of Cenvat credit. However, Excise duty payment is done by Syngenta directly to Government Portal under the registration of Agro Pack. Dr. Agro Pack PLA A/c Cr. Bank A/c Set off / Utilization of Cenvat credit Set off entry is passed in Financials based on the total excise duty payable net of Cenvat credit: Dr. Excise duty Payable A/c Cr. Excise duty Agro Pack A/c Cr. Agro Pack PLA A/c 12.2. We find merit in the aforesaid argument. The appellant have clearly stated that the registers in which Cenvat credit was taken were maintained separately for their two clients for whom they were manufacturing various final goods. It has been argued by them that goods were received and the job work was being done by them for these goods, details of which were entered in the said registers. It has also been stated that two registers were maintained in respect of Cenvat credit availed for these two clients. This was done to keep accounts of two clients separate. The Commissioner in his order has not disputed the fact that appellant were doing job work for SIL and SCPPL. It has also .....

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..... dia Limited., At Agro Pack, Plot No. B/155, GIDC, Ankleshwar; (iv) M/s Syngenta Crop Protection Pvt. Ltd., At Agro Pack, Plot No. B/155, GIDC, Ankleshwar; (v) M/s Agro Pack, 227/1, GIDC, Panoli; (vi) M/s Syngenta India Limited, A/c Agro Pack, Plot No. B/155, GIDC, Ankleshwar; The Commissioner has observed as follows:- 52.1. M/s. Agro Pack, Ankleshwar have also availed Cenvat credit on the Bills of Entry in the name of M/s. Syngenta India Limited, 227/1, GIDC, Panoli and M/s. Syngenta Crop Protection Pvt. Limited, 227/1, GIDC, Panoli to the tune of ₹ 7,60,14,689/-. M/s. Agro Pack Ankleshwar is a distinct separate unit having separate registration and is therefore not eligible to avail credit on the bill of entry of in the name of SIL and SCPPL. There has been no endorsement nor there is any corelation or records maintained. M/s. Agro Pack has availed the credit by way of suppression of facts with intent to avail inadmissible credit and evade duty. Therefore, the Cenvat credit amounting ₹ 7,60,14,689/- availed and utilized is liable to recovered under rules 14 of Cenvat Credit Rules, 2004. We find that no investigation or verification of records has been done to ascertain .....

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..... lso set-aside and the matter is remanded for verification of facts. 12.6 The next issue relates to availment of credit in excess. The show cause notice alleges that credit has been availed in excess by not following the formula. The Commissioner while confirming the said demand has observed as follows:- 52.3. Further in several cases M/s. Agro Pack has availed excess Cenvat credit amounting to ₹ 34,49,355/-, education cess ₹ 1,13,965/- and SHEC of ₹ 56,982/-. The excess credit has been admitted by the notice. Also in respect of invoice No. 812 dated 11.06.2008 the credit of ₹ 4,62,200/-(BED), ₹ 9,240/- (ED) and ₹ 4,620/- (HSED) has been wrongly availed twice vide entry number 441 dated 14.06.2008 and again by entry No. 1139 dated 25.10.2008. These excess availment is by way of suppression of facts with intend to avail excess credit. The same is liable to be recovered. Shri R.L. Shetty and Shri Bipin Patel during their statements have confirmed excess availment and agreed to pay these sum. The appellant have contended they are challenging that there no formula has been stated in the show cause notice or in the impugned order. There is no calculati .....

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