TMI Blog2022 (10) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... Act has to be followed strictly. The concerned officer should consider granting cash refund of any amount due to the appellants - the appeals are partly allowed and the matter remanded back to the original authority. - Excise Miscellaneous Application No. 85735 of 2018, Excise Appeal No. 1869 of 2010 and Excise Appeal No. 1870 of 2010 - FINAL ORDER NO. A/85952-85953/2022 - Dated:- 11-10-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri Gajendra Jain, Advocate, for the Appellant Shri Amrendra Kumar Jha, Deputy Commissioner, Authorised Representative for the Respondent ORDER These appeals are directed against Order-in-Original No. 38/BR-38/Th-I/2010 dated 30.07.2010 of the Commissioner of Central Excise, Thane-I. By the impugned order, the Commissioner has held as follows:- ORDER I) I confirm the demand of the wrongly availed Cenvat credit amounting to Rs. 4.02.49.979/- (Rupees four crores two lakhs forty nine thousand nine hundred seventy nine only) (i..e Basic Rs. 2,97,38,381/- plus Edu, Cess Rs. 5,94,764/- plus S. H. Rs 2,97,384/-plus Addl. Duty Rs 96,19,447/-) and order it's recovery from M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re/welding wire and are carrying out processes like cutting, rewinding, branding, testing and repacking on the same and thereafter clearing the same under their own brand name on payment of central excise duty. Against the imported raw materials received, appellant 1 had taken Cenvat credit of the duty paid on these raw materials. As these processes did not amount to manufacture, the Cenvat credit appeared to be inadmissible to them. 2.3 Investigations were carried on and statement of Shri S.M. Agarwal, Executive Director (appellant 2) of appellant 1 was recorded under Section 14 of the Central Excise Act. On completion of investigation, a show cause notice dated 12.05.2010 was issued to the appellants asking them to show cause as to why:- i) the Cenvat credit amounting to Rs. 4,02,49,979/- (Rupees four crores two lakhs forty nine thousand nine hundred seventy nine only) (ie Basic Rs. 2,97,38,381/- plus Edu. Cess Rs. 5,94,764/- plus S. H. Rs 2,97,384/- plus Addl. Duty Rs. 96,19,447/-) availed by them as shown in Annexure -A to the notice should not be demanded and recovered from them under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in respect of the imported raw materials still lying in stock with them or contained in the processed goods. These goods were subsequently allowed to be traded by the revenue for which the appellants obtained dealer registration and have passed on the benefit of the duty paid on these goods to their buyers. So, as they have reversed this amount from their customers by trading these goods, they do not contest the issue in respect of these traded goods. However, after taking into account these traded goods, a certain amount of credit was got reversed by the appellants which was in respect of the inputs used for manufacture of their finished goods which the department does not dispute. As a result of the reversal made by the appellants as directed by the Revenue, they were not in position to utilize these amounts during the continuance of the Central Excise Act, 1944 (till 30th June 2017). This credit which is due to them should be refunded to them in cash as per Section 142(3) of the Central Goods and Service Tax Act, 2017. 3.3 Learned AR reiterates the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warranted compliance can be overlooked, being not a non-compliance which is looked upon by the law. There is no dispute from their side that they have not availed the Cenvat credit facility which by its very definition, in Rule 3 of the Cenvat Credit Rules, 2004 is allowed to the manufacturer' only. 30. The other main contention made by M/s GEE Ltd. is that the department has forced them to reverse a particular amount on 19.02.10, after that on 20.02.10 they transferred some of the inputs to Trading Account', and the credit getting accumulated due to import of wires was not utilized for payment of duty on their other undisputed dutiable local clearances of other goods (than wire), and some imported wires were also exported as such under bond, and so, in effect, demand is more than the credit taken by them. They have submitted two charts in this regard to support their claim. On study of this contention and the charts given by them, it is seen that there is a main flaw in this contention. That is, once the credit is taken/availed wrongly the same becomes recoverable after being found it to be unavailable and the payments made from it can not be equated to reversal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the demand and other proposals are not sustainable, it is seen that it is a wrong presentation of the fact that there is no revenue implication in the matter. As discussed in the previous para credit was not lying idle in M/s GEE Ltd.'s account but was utilized by them for making payment of duty , this payment has been passed on by them through Central Excise invoices to their buyers who have availed credit thereon, creating an undesirable Cenvat chain, effecting the revenue of the department. The 'payment' can not be validated as nonrevenue- implication, also, because it is originating from an ab initio wrong credit. Treating it is a no-implication matter will also defeat the purpose of whole Central Excise duty which is a duty on manufacture of the goods, and besides taking credit of the duty paid on the inputs, the facility to pass on the credit of duty paid has also to be available to the manufacturer only. 33. Turning to the contention that the periodic returns were filed by them from time to time, and the Cenvat records were also kept properly, it is seen that the monthly returns do not show what activity is being carried out by the assessee at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collection. Further, when he was looking after production and maintaining Central Excise records by way of supervision, it is clearly indicated that he is aware of the fact that the processes carried out by them are not manufacturing process within the meaning of Section 2(1) of the Central Excise Act, 1944, and thus has also dealt with the goods which he knew were not qualifying as 'input'. Here, also his omission is deliberate and conscious effort to evade lawful payment of Central Excise duty by intentionally availing wrong and ineligible Cenvat credit, and therefore, Shri. S. M. Agarwal, Executive Director is liable for penalty under the provisions of Rule 15 (1) of the Cenvat Credit Rules, 2004. The said Rule 15 does not distinguish a person from legal person and so contention that he can not be penalized is also incorrect. 4.3 In our view, the issue is squarely covered by the decision in the case of Ajinkya Enterprises referred to by the counsel for the appellant, wherein the following has been held:- 8 . We see no merit in the above contentions. As rightly contended by the representative of the assessee appearing in person, till 1st March, 2005 the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 559 (T), S.A.I.L. - 2007 (220) E.L.T. 520 (T) = 2009 (15) S.T.R. 640 (Tribunal), M.P. Telelinks Limited - 2004 (178) E.L.T. 167 (T) and a decision of the Gujarat High Court in the case of CCE v. Creative Enterprises reported in 2009 (235) E.L.T. 785 (Guj.) has held that once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity docs not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) E.L.T. A121] by dismissing the SLP filed by the Revenue. 11 . Therefore, in the facts of the present case, in our opinion, no fault can be found with the decision of the CESTAT in passing the impugned order. 4.4 Accordingly in view of the decision of the jurisdictional High Court on the subject, we follow the same. Accordingly the demand made seeking to recover the Cenvat credit from the appellants which is in respect of the processed goods actually cleared by them on payment of central excise duty has to be set aside. 5.1 In the paper book at page 106, Annexure-12 the appellants have filed a detai ..... 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