TMI Blog2019 (8) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 unsubstantiated - demand on this count is set-aside. No investigation or verification of records has been done to ascertain if the goods were received in the factory and utilized for the purpose of manufacture of final product or not. The only requirement under the law to avail credit of duty paid on inputs is that the said goods should have suffered duty liability and should have been used in the production of finished goods which are liable to duty - In the instant case, no investigation whatever has been done to ascertain that the goods were received and utilized in the manufacture of goods. Whatever be the address in the invoice documents on the strength of which the credit has been availed, the credit cannot be denied if the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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/11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to supply active ingredient as well as other raw materials and packaging material for manufacture of pesticides/insecticides for the appellants. He submits that both SIL and SCPPL had granted authorisation to the appellants in terms of Notification No. 27/92-CE (NT) dated 09.10.1992 as amended by Notification No.36/2001-CE (NT) Dated 26.06.2001 to manufacture products on behalf of the company and comply with all the procedures under Central Excise Act, 1944 read with Rules made there under including payment of excise duty on final products manufactured and cleared to the company. 3. He claimed that 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 consig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamp of name of SIL and SCPPL with whitener and present again with their rebate claims. He pointed out that on the basis of scrutiny of these overwritten Cenvat Register, investigation was carried out against the Appellants on 25.11.2008 and by show cause notice dated 17.03.2012, following demands were proposed which has been confirmed by the impugned order:- S. No. Amount of demand confirmed Reasons for demand 1 ₹ 25,39,18,209/- Demand is confirmed as per Annexure-A to the show cause notice on finished goods cleared during the period February 2008 to October 2008, on the ground that duty has been paid by utilizing Cenvat Credit which 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that duty has been discharged by the Appellants from its Cenvat account. Credit of ₹ 36,20,302/- has been denied on the ground that same is claimed in excess of formula prescribed under Rule 3(7) of Cenvat Credit Rules, 2004. 6. He argued that as per the definition of Inputs, all goods, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the-final product or not, are inputs. In the present case, raw materials which were locally procured or imported by SIL and SCPPL were received by the Appellants in their Unit-II and used by the appellants in the manufacture of finished goods for SIL and SCPPL. He submits that the definition of inputs does not contain any requirement that the inputs must be owned by the assessee. The only requirement is regarding use of the inputs in the manufacture of the final product. He argued that from the entries in Gate Inward Register and Stores Register, inputs have been received in the factory and used in the manufacture of pesticides/insecticides. In fact, all invoices and challans show appellants or their factory address as consignee. Therefore, he argued that g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit cannot be denied merely on the ground that document is not in the name of job worker and has been filed by importer if the receipt and use of inputs in manufacture is not in dispute. It has also been held that credit cannot be denied on the ground that bills of entry were not endorsed in the favour of such job worker. He relied on the following case laws:- (a) Standard Grease Specialties Pvt. Limited. vs. CCE -Final Order No. A/10583-10584/2019-Tribunal (Ahmedabad) (b) Marmagoa Steel Limited vs. UOI - 2005 (192) ELT 82 (Bom.) Affirmed by Hon'ble Supreme Court - 2008 (229) ELT 481 (SC) (c) Eupec Welspun Coatings India Limited vs. CCE - 2009 (235) ELT 347 (T) - Affirmed by Hon‟ble Gujarat High Court in 2010 (260) ELT 381 (Guj.) and SLP dismissed as reported at 2010 (260) ELT A83 (S.C). (d) Advanced Enzyme Technologies Limited vs. CCE - 2014 (3) TMI- 751-CESTAT-MUM (e) Trichem Lab (Bombay) Pvt. Limited vs. CCE - 2016 (337) ELT 596 (Tri.) 8. He argued that credit cannot be denied on the ground that invoices are not in the name of appellants but are issued to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedure followed by the appellants for availment of credit is the same as was followed in Unit-I. Therefore, the appellants were under bonafide belief that credit is available to them and they are rightly utilising the credit or payment of duty on finished goods. In their written submission, they also submitted two affidavits of Shri Sanjay Raut, one in the capacity of Senior Manager Indirect Taxation of Syngenta India Limited and another in the capacity of Senior Manager Indirect Taxation of Syngenta Crop Protection Pvt. Limited. 10. Ld. Counsel also pointed out that there is no case for imposition of penalty on various employees as well on the Company as all the actions were bonafide and there is no contravention of law. 11. Ld. AR relies on the impugned order. He also relied on the following decisions to assert that the onus of establishing the receipt and use of the goods is only on the appellants:- (a) 2008 (12) STR 82 (Tri. Del.) CCE, Delhi vs. Usha Engineering Works (b) 2007 (8) STR 141 (Tri. Del.) Pharmalab Engineering Limited vs. CCE, Ahmedabad. 12. We have gone through the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Against the said purchase order, the vendor supplies material on bill to ship to ship to basis, wherein material is delivered to the job worker‟s location (Agro pack manufacturing plant) and commercial invoice is raised on SIL, Head Office for payment. However the Excise Invoice is accompanied with the material which is raised on SIL A/c Agro Pack. (c) Since the invoices are raised on the company by vendors the company is maintaining records of such receipt job worker wise. Credit on inputs are availed by job worker and utilized for payment of duty on finished goods. Any payment of duty on finished goods through PLA is made by direct debit to government account for Agro Pack. (d) All financial entries are in Books of the company: Receipt of Goods On receipt of this material at job work location, the goods receipt entry is made in the company books under the plant cod created for Agro pack (SAP system available at job worker location). Based on goods receipt the inventory is posted in Syngenta books of accounts net of Cenvat credit. Dr. Inventry RM/PM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it 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 not been disputed that SIL and SCPPL were sending material to the appellant‟s premises for the purpose of job work. Another issue raised is that SIL/SCPPL have never applied for exemption under Notification No. 214/86-CE and were not registered with Central Excise. It is not understood as to why registration and availment of Notification No. 214/86-CE is necessary for all job-workers. This notification can be used by a registered manufacturer if he wishes to avail. If one does not wish to avail this notification there is no bar in sending goods for job work. In fact a lot of entities get their goods manufactured on job work without registration and without availing Notification No. 214/86-Central Excise In this perspective, reliance placed on by impugned order on the decision of Hon'ble Supreme Court in the case of Harichand Shri Gopal 2010 (260) ELT 3 (SC) is totally out of context. The only ground on which the entire case has been built is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here 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 if the goods were received in the factory and utilized for the purpose of manufacture of final product or not. The only requirement under the law to avail credit of duty paid on inputs is that the said goods should have suffered duty liability and should have been used in the production of finished goods which are liable to duty. In the instant case, no investigation whatever has been done to ascertain that the goods were received and utilized in the manufacture of goods. Whatever be the address in the invoice documents on the strength of which the credit has been availed, the credit cannot be denied if the goods are in fact received in the factory and utilized for the manufacture of finished goods. In this context, it is seen that the appellants are claiming that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led 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 calculation forthcoming as to how these demands have been coming out. Therefore they are challenging these demands. We find that while the show cause notice cites Rule 3(7) of Cenvat Credit Rules, 2004, it does not disclose exact manner as to how this calculation has been made and the impugned has also not dealt with the issue. Thus we find that the order of the Commissioner is not a speaking order consequently, this demand is also set-aside. The Commissioner is directed to disclose the exact manner the demand has been calculated and the details of formula applicable to the facts of the case. 13. It is seen that penalty on SIL, SCPPL and Shri R.L. Shetty, ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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