TMI Blog2019 (10) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient, positive and tangible evidence on record, findings based on inferences as in the impugned order are unsustainable - however, the burden of proof that assessee had availed modvat/cenvat credit is that on the Revenue. The impugned order, to the extent it confirms the duty demand of ₹ 78,57,625/-, interest thereon and the penalty imposed upon Birla Tyres, is set aside and the dropping of the demand of ₹ 24,53,668/- is confirmed, with consequential relief to Birla Tyres - appeal allowed - decided in favor of appellant. - Excise Appeal No.33 of 2009, 35 of 2009 - FINAL ORDER NO. 76387-76388/2019 - Dated:- 22-10-2019 - HON BLE SHRI P.K. CHOUDHARY, MEMBER (JUDICIAL) AND HON BLE SHRI P.V. SUBBA RAO, MEMBER (TECHNICAL) Dr. Samir Chakraborty (Sr. Advocate) Shri Hemant Jajodia (C.A.) for the Appellant (s) Shri D. Haldar, Authorized Representative for the Respondent ORDER P.K. CHOUDHARY : 1. By an adjudication order dated August 14, 2008 read with Corrigendum dated October 24, 2008 the Commissioner, CE,C ST, Bhubaneswar has confirmed an excise duty demand of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty paid on such inputs/raw materials. Birla Tyres and three of its officers were called upon to show cause to the Commissioner as to why an amount equivalent to credit of duty/cenvat credit, being ₹ 1,04,28,167/-, should not be demanded and recovered from Birla Tyres under the First Proviso to Section 11A(1) of the Central Excise Act, 1944 (in short, the Act ) read with Rule 57I and Rule 57AH of the erstwhile Central Excise Rules, 1944 and Rule 12 of the Cenvat Credit Rules, 2001/Cenvat Credit Rules, 2002, along with interest under Section 11AB of the Act read with Rules 57I and 57AH of the Central Excise Rules and Rule 12 of the Cenvat Credit Rules and equivalent amount of penalty should not be imposed upon it under Section 11AC of the Act read with Rule 57I and Rule 57AH of the Central Excise Rules and the Cenvat Credit Rules and, further, why personal penalties should not be imposed upon the three of its officers, who were also made show cause noticees, under Rule 26 of the Central Excise Rules. (d) The show cause notice, pursuant to adjudication upon filing of reply thereto by Birla Tyres and other show cause noticees, resulted in passing of the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... October 21, 2005 by the Commissioner. From the said Cost Auditor s Certificate, it is evident that these inputs were never used as input material for manufacture of ADV tyres. Even the Chartered Accountant certificates support this fact, which would be apparent from the comparative table submitted in this regard during the course of hearing. (v) It is seen from the statement of Arindam Gupta that the weight of a 7.00-19 grade of ADV tyre is 14.19 kg. From the comparative analysis submitted it would be seen that total weight of tyres in all cases as certified by Cost Accountant/Chartered Accountant is 14.22 to 14.27 kgs. Thus Birla Tyres has reversed duty on basis of higher weight of tyres and therefore there is no revenue loss. (vi) Additionally, it would be observed that as per Shri Kanti Choudhury s list of tentative direct raw material if the quantities specified therein are added, it would result in tyre weight of 14.15 kg [14.193 kg as per impugned order, para 8.16]. In the event of additional raw material, other than as specified in the CA certificates, having been used in the manufacture of ADV tyres, the logical result would have been that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADV Tyres. (iv) Documentary evidence in support of the reversal of cenvat credit of ₹ 1,55,867/-, which has not been factored into the show cause notice. In terms of the said direction Birla Tyres submitted all the documents, including the Cost Auditor s certificate, showing the weight of ADV Tyre for the period December 1993 to February 2003 and extracts of Cost Auditor s report duly certified for the period covered by the show cause notice. However, no order was passed by the then Commissioner and, as such, a fresh personal hearing was thereafter held by the incumbent Commissioner on 05.02.2008, pursuant to which the impugned order was passed. 6.2 In the show cause notice it is alleged that during the said period Birla Tyres had used/consumed the following inputs in or in relation to the manufacture of ADV tyres: (a) EPDM rubber (b) Butyl reclaim rubber (c) Carbon Black IRB 7 LB 101 (d) Carbon Black N-220 (e) Carbon Black N-660 (f) MBT (g) TMTD (h) HBS/CBS (i) Accinox BLB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tents of the list which is termed as a tentative lists. As against this, Birla Tyres had submitted before the Adjudicating Authority, the Cost Audit Report, Stock Register and also certificate submitted from Cost Auditor, M/s S. Gupta Company, as per the direction of the Commissioner, to establish that these goods were never used as input materials, either directly or indirectly, in or in relation to the manufacture of ADV Tyres. The Cost Audit Report/Certificate submitted by Birla Tyres in terms of the direction of the predecessor Commissioner during the course of personal hearing held on October 21, 2005 in the matter has been rejected on the plea that the items in respect whereof Birla Tyres had reversed the credit amounting to ₹ 1,17,234/- did not find a place therein. We find that this has been done overlooking the fact that the Cost Audit Report was submitted strictly as per the requirement of the predecessor Adjudicating Authority, as recorded in the Record Notes of Personal Hearing held on October 21, 2005 and that there was no requirement thereunder for the Cost Audit Report or to provide details of the raw materials issued in respect of the ADV tyres which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In paras 5 to 9 of the judgment it has been observed as under: 5. The assessee challenged the order of the adjudicating authority before the Customs, Excise and Gold (Control) Appellate Tribunal (for short, the Tribunal ). It was submitted by the assessee before the Tribunal that it had not availed of Modvat credit regarding imported inputs and that it had availed of the same for the input/raw material purchased from the local market. Learned members of the Tribunal afforded an opportunity to the departmental representative to verify this aspect. Departmental representative, on the adjourned date of hearing, stated before the Tribunal that he had not received any answer from the Commissioner concerned, despite correspondence addressed to him and personal efforts made by him. On the making of this statement, the Tribunal came to the conclusion that the assessee had not availed of the Modvat credit on imported inputs/raw material and in the absence of any material to show that the assessee had availed of Modvat credit on the inputs purchased from the local market, the demand raised by the Revenue was unjustified. The Tribunal, therefore, accepted the appeal and set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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