TMI Blog2022 (2) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- In the instant case, it is not disputed that a declaration, under Rule 57(T)(i), was filed on 14.03.1997, declaring the intent to use the machine for manufacturing Bailey Acqua Water; declaration for intent to use the machine for both Bailey Acqua Water and YoFrooti was filed on 19.03.1997; Machine started for packing YoFrooti from 02.04.1997;YoFrooti Became dutiable on 14.05.1997 and Cenvat Credit was Taken 02.09.1997. The intention is clear about the usage of the machine and the declarations were not denied by the department - in the instant case, the appellants have made clear their intention to use the machine for manufacture of dutiable as well as exempted goods. They have filed two declarations to this effect. The declarations were not contested by the department at the material time. The appellants claim that they had utilised the machine for manufacture of Aqua Bailey though on trial basis and the same was not successful. The appellants cleared the scrap of such goods on payment of duty. Learned Commissioner rejects the claim of the appellants saying that the affidavits are filed in a belated manner. It is not the case of the department that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jelly ; appellants claim that the goods manufactured in one plant were used in another plant for manufacture of excisable goods. The appellant cleared final product on payment of central excise duty, as applicable. 2.1. Department carried on an investigation against the appellants; it was observed that there were shortage/excess of raw material as well as final goods in all three units; alleged shortage was found lying within one or the other premises of another unit; a show cause notice dated 11.08.1998 seeking explanation on shortage/excess of raw materials and finished goods and demanding Cenvat credit of ₹ 22,61,776 availed on TBA machine (packing machine); Commissioner of Central Excise, vide order-in- original dated 28.02.2002, dropped the entire proceedings. On an appeal filed by the department, CESTAT, vide order dated 20.11.2008, remanded matter back to the adjudicating authority on the ground that the order was a non-speaking one. The impugned Order-in- Original, dated 15.03.2009, was passed in remand proceedings. Hence, the present set of appeals. 3. Learned Counsel for the appellants submits that on physical verification of the stock of the finished excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they also filed intimation about receipt of the aforesaid machine vide letter dated 19.03.1997; the said machine was intended to be used for manufacture of packaged drinking water falling under Central Excise Tariff Heading 2201.19; YoFrooti was produced from the said machine with effect from 02.04.1997; however, credit of the CVD paid on the aforesaid machine was availed by the appellants in September, 1997 only totaling to ₹ 23,91,519; declaration was filed by the appellants on 14.03.1997 in terms of Rule 57D(1) of the erstwhile Central Excise Rules. 4.1. Learned Counsel for the appellants further submits that the appellants undertook trial production of Aqua Bailey ; however, the trial Production was not a fruitful exercise; documentary evidence in this regard, duly supported by affidavits of Shri. Bandekar Praful P., Director and another of Shri Seshadri Krishnan, General Manager (Taxation) in support of the above submission are on record; the Bailley mineral water manufactured during the course of trial run was also cleared by the appellant payment of Central Excise duty; the said trial production has also been reported in the audited balance sheet; Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T 177 (SC) and CCE Vs Chemphar Drugs 1989 (40) ELT 276 (SC) and submits that the demand being time barredno penalty can be imposed on the appellant. 6. Learned authorised representative appearing for the department reiterates the findings of the impugned order and submitted a written reply stating, inter alia, that On the appellants argument that though all the three units are registered separately, their main exit is one and goods found in other units cannot be treated as removal and no duty can be demanded, he relies upon Hon ble Supreme Court in the case of Rollatainers Ltd (supra); all the three units are independent and separately registered; therefore, all three units cannot be treated as one unit; they should have entered the particulars in the statutory records and invoice should have been issued even for movement from one unit to the other, which they fail to do so; the appellants contravened the provisions of Rule 47 of CER, 1944; during Panchnama dated 12.02.98, it was found that there was no stock of Yo Fruity in the Bonded Store Room whereas stock of YoFrooti was found in the Premises of Agro Division (39006) and Joly Jelly Division (12105); therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of events and dates involved in the matter; he submits, inter alia, that Perusal of ground plans approved by the Health Inspector as well as Central Excise department reveal that it is one contiguous premises having one common factory gate; there is no division between the units, no fencing and thus, there is only one factory; the facts were also mentioned during investigation. the three units had composite plant and machinery required for the manufacture of agro based beverages; Raw sugar syrup, the basic ingredient for the preparation of Agro based beverages was seen to be exclusively being prepared by and in the premise of M/s PIL (Jolly Jelly Division) from where it was being transferred through pipe line to their own unit s M/s PBL (Agro Division) for blending and pasteurization; pasteurized ready beverage in bulk form is thereafter transferred again through pipe line to M/s PIL (YoFrooti Division); bulk beverage in ready form is being packed by M/s PBL (Agro Division) as Mango Frooti in 200 ml pack and by M/s PIL (YoFrooti Division) as YoFrooti in 250 ml. in tetra pack; no documents whatsoever are prepared for the transfer of raw sugar syrup from M/s PIL (Jolly Je ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he factory (ii). Credit of capital goods is available to the appellants on the TBA machine purchased and installed by them. 9. Coming to the first issue, we find that the department alleges that there were excesses and shortages in different products in the company on the day of verification. It is the contention of the appellants that the products found short in one unit are found in excess in other unit. They seek to explain the shortage of 1620 trays Mango Frooti 200ml pack found in Agro unit by stating that the same amount of excess was found in Jolly Jelly unit and that these facts can be seen from Annexures C and E to Show Cause Notice. They explain the other shortages also in a similar manner on the basis of Annexures to the Show Cause Notice. They further submit that the entire factory is one unit and has got only one out gate. Whenever goods are cleared outside the factory, due duty is paid. They in fact cleared the final products on payment of duty; their submissions were not taken in to account and credit of the same was not given. 10. Learned authorised representative, for the department submits that the ground plans of the different units are earmarked separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in excess in the other. We find that the counsel for appellants relies upon Dhampur Sugar Mills Limited V/s CCE 2001 (129) ELT 73 (SC). He submits that in that case as well, the assessee had three units for manufacture of different excisable goods; goods manufactured in one plant were used in another plant for manufacture of another excisable goods; department disallowed the benefit of Notification No.67/95-CE on the ground that all the three units have different and separate registration; assessee contended that benefit cannot be denied to them just because all the three plants are located in the same premises having common boundary, exemption; Hon'ble Tribunal held thatnumber of registrations would not decide the number of factories unless and until they are situated in different premises; on appeal by the Revenue, Hon ble Supreme Court, observed in the said case that We do not find merit in this civil appeal filed by the Department. Apart from the reasons given in the impugned judgment by the Tribunal, we find that in the present case show cause notice given by the Department itself proceeds on the basis that the factory of the assessee Consisted of different units (plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted; the Bailey mineral water manufactured during the course of trial run was also cleared by the appellant payment of Central Excise duty; invoices were also placed on record along with payment of particulars of duty payment; fact of trial production was reported in the audited balance sheets. He submits that the Commissioner has overlooked the factual position; ignored the documents placed on record and commissioner has rejected the affidavits on the only ground that the same have been filed belatedly; it is not the affidavits but the documents which were to be examined by the Commissioner. 14. On the contrary, the respondents submit that the appellants availed cenvat credit of capital goods used exclusively in the exempted goods; authorised representative submits that a declaration, under Rule 57(T)(i), was filed on 14.03.1997, declaring the intent to use the machine for manufacturing Bailey Acqua Water; declaration for intent to use the machine for both Bailey Acqua Water and YoFrooti was filed on 19.03.1997; Machine started for packing YoFrooti from 02.04.1997;YoFrooti Became dutiable on 14.05.1997 and Cenvat Credit was Taken 02.09.1997. He submits that the appellants mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which in turn relied upon Hon ble Supreme Court in the case of Surya Roshni Ltd (supra). We find that in a very later judgement Tribunal in the case of Kaleesuwari refinery Private Limited V/s CESTAT 2016 (340) ELT 632 (Mad), gas referred to the decision in Spenta and had clarified that the Apex Court has not upheld the Tribunal s decision and the as such the same has not attained finality. We find that Tribunal held that 20. It appears that the decision of the Tribunal in Surya Roshni, was taken on appeal to the Supreme Court by the assessee. Though the Supreme Court dismissed the Special Leave Petition, the Supreme Court did not affirm the decision of the Tribunal on merits. The Supreme Court dismissed the appeal as not maintainable. As a consequence, Surya Roshni has again bounced back to the Madhya Pradesh High Court, which is now seized of the matter. We have seen the order passed by a Division Bench of the Madhya Pradesh High Court on 21-9-2012, which makes it clear that the very decision in Surya Roshni relied upon by the Tribunal has not attained finality. This is apart from the fact that even if it attains finality, it would have no application to the case on hand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when a manufacturer is availing full duty exemption based on the value or quantity of the goods cleared in a financial year, in which case, while initially the manufacturer will be availing full duty exemption (for some months or for several financial years at a stretch) but subsequently at some point of time when he crosses the threshold limit for exemption, his final product becomes dutiable and in such a case, even during the period of full exemption, the manufacture can take capital goods Cenvat credit which he can utilize when this final product becomes dutiable. A question arises as to when capital goods are used for manufacture of dutiable as well as exempted final product, whether for availing capital goods credit, the dutiable as well as exempted final product have to be manufactured simultaneously. In our view this is not necessary, and Cenvat credit would be admissible even if the capital goods are used for manufacture of dutiable goods and exempted goods at different points of time. However, if at the time of receipt of the capital goods, the manufacturer was using the capital goods only for manufacture of fully exempted final product and had no plan or intention to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affidavits are filed in a belated manner. It is also to note that the appellants have availed credit only after the YoFrooti became dutiable. We find that in terms of the provisions of sub-Rule (4) of Rule 6 of the Cenvat Credit Rules, 2004 Cenvat credit shall not be admissible on capital goods which are used exclusively in the manufacture of exempted goods or in providing exempted services, other than the final products which are exempt from the whole of the duty of excise leviable thereon under any notification, where the exemption is granted based on the value or quantity or clearances made in a financial year. A perusal of the provisions makes it clear that there is nothing in the provisions to indicate that the intent of use of machine is relevant at the point of receiving or installation of capital goods. The only pre condition is that the credit of capital goods should not be used exclusively in the manufacture of exempted products or in the provision of exempted services. It is not the case of the department that the appellant used the capital goods exclusively in the manufacture of exempted products or in provision of exempted services. The appellants have filed declara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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