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TMI Blog2008 (6) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the investigations by the department the alternator was not manufactured by ITPL and therefore, there was no clearance of the aforesaid capital goods under the invoice issued by ITPL based on which credit of Rs. 88 lakhs was taken. (d) Commissioner, accordingly, confiscated the goods and allowed redemption of the same on payment of fine of Rs. 2 crores; he disallowed credit of Rs. 88 lakhs and ordered recovery of interest on the said amount; imposed penalty of Rs. 88 lakhs on M/s. Manaksia Ltd.; he also imposed penalty of Rs. 10 lakhs on Shri Rajib Lalwani, Vice-President of M/s. Manaksia Ltd. and Rs. 10 lakhs each on ITPL and its director Shri Kiran Bhagwat. 4. The learned advocate appearing for M/s. Manaksia Ltd. and Shri Rajib Lalwani submitted that they had placed orders with ITPL: received the duty paid goods along with the invoice; took the credit as indicated in the invoice and there was no irregularity in their taking the credit. He relied upon the decisions of the Tribunal in case of CCE, Vadodara-I v. M/s. Hylite Cables - 2007 (212) E.L.T. 284 (Tri-Ahd) and in the case of CCE, Mumbai-III v. Mardia Tubes Ltd. - 2007 (209) E.L.T. 60 (Tri-Mumbai) = 2007(5) S.T.R. 207( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry or depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer 8.2 The invoice referred to in this Rule has to be the invoice contemplated under Rule 11 of the Central Excise Rules which reads as follows: Rule 11. Goods to be removed on invoice "(1) No excisable goods shall be removed from a factory or a warehouse except under an invoice signed by the owner of the factory or his authorized agent.............. (2) The invoice shall be serially numbered and shall contain the registration number, name of the consignee, description, classification, time and date of removal, mode of transport and vehicle registration number, rate of duty, quantity and value, of goods and the duty payable thereon." 9.1 ITPL is claiming themselves as manufacturer. As a manufacturer they are required to clear the goods manufactured by them from their factory issuing invoice containing the relevant particulars mentioned above. They cannot issue an "excise invoice" for goods manufactured in the premises belonging to somebody else. 9.2 ITPL was not precluded from sending their goods for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d goods from the job workers' premises to ITPL or directly to M/s. Manaksia and no such evidence have been adduced. 9.8 It is also claimed that some fabrication works have been undertaken at the premises of M/s. Manaksia Ltd. The goods are claimed to have been transported through three lorries and the investigation suggest that two of the lorries did not go through the concerned check posts and the goods transported through the third lorry was only pre-fabricated structure valued at about Rs. 3.5 lakhs. 9.9 There are other inconsistencies to the claim that the goods received under the cover of the invoice was manufactured by ITPL. For example, the control panel is claimed to be of 12-15 years' old and if that be so, including the value of the same in the invoice of the alternator for the purpose of paying duty is not understandable. It is also admitted that the said control panel was directly received from the third party and installed in the premises of M/s. Manaksia. Similarly, AVRS was admittedly a bought out item and not supplied by ITPL. 9.10 Thus, it is seen that the claim that the goods are manufactured by ITPL is not acceptable and therefore, the claim that they supplied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off as follows: (a) The appeal by M/s. Manaksia Limited is partly allowed on the following terms. The order disallowing and recovering credit of Rs. 88 lakhs availed by M/s. Manaksia Limited is upheld. The demand of interest on the above amount is also upheld. The penalty of Rs. 88 lakhs imposed on M/s. Manaksia Limited is also upheld. The redemption fine imposed on the confiscated goods is reduced from Rs. 2 crores to Rs. 20 lakhs. (b) Penalty of Rs. 10 lakhs imposed on ITPL is upheld and their appeal rejected. (c) The penalties imposed on Shri Rajib Lalwani and Shri Kirsan Bhagwat are set aside and their appeals allowed. (Pronounced in Court on..................) Sd/- (M. Veeraiyan) Member (Technical) 13. [Per: Archana Wadhwa, Member (J)]. - I have gone through the order proposed by my Id. Brother. With respect, I do not agree with the same and my order is being recorded separately. 14. The facts already stands detailed in the order of ld. Member (Technical). As recorded in para-7.2 of his order, the disputed issue before us as regards the claim of M/s. Manaksia Ltd. to avail the credit of duty paid on the Speed Alternator with AVRS and Voltage Control System. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id goods, M/s. Manaksia Ltd. would be entitled to avail the credit on the same. If at all, Revenue is of the view that the goods have not been actually manufactured by M/s. ITPL in specified area and they are not entitled to refund the duty paid by them, they can always refuse to do so at the time of considering the claim of M/s. ITPL for refund of the duty. Viewing the said dispute from another angle, I find that if M/s. ITPL has not manufactured the goods, they are not liable to pay duty on the same, in which case the same is in any case liable to be returned to them, even if the Revenue's case is accepted. As such the finding of the lower authorities that M/s. ITFL has shown payment of duty on the goods as having been manufactured by them with an ulterior motive, do not further the Revenue's case, because not having manufactured the goods, they were not in any case liable to pay the duty. As such on the short ground itself that the duty paid goods having been received by M/s. Manaksia Ltd., irrespective of the fact that whether the duty was required to be paid by M/s. ITPL or not, I am of the view that credit of such duty cannot be denied. The above views get strengthened by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue is that the said M/s. ITPL is not manufacturer and could not have issued the invoice. 21. He submits draws my attention to the letter of the Superintendent of Taxes, Khanpara Check Post, Assam to indicate that the vehicle numbers which are mentioned in the documents had crossed the check post of the Khanapara Station and were carrying prefabricated structures were of transporter Suraj Road Lines of consignment note No. SRL 6263/ dt. 12-4-2003. He also submits that the M/s. Manaksia Limited has paid the amount of invoice which has been raised by their supplier which find reflection in the statement of account of their bankers i.e. ICIC Bank. He draws my attention to the invoice i.e. duty paying documents to show that the amount has been paid by the supplier and debited in their accounts. 22. He draws my attention to Rule 7 of the Cenvat Credit Rules, 2002 and submit that as long as the provisions of the said Rule are followed by the appellant, the question of denial of Cenvat credit will not arise. 23. The ld. SDR & JDR submit that the capital goods which are as mentioned on the invoice are not received by the appellants. In was submitted that the provisions of Rule 7(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er :- "Rule 7 Documents and accounts. - (1) The CENVAT Credit shall be taken by the manufacturer on the basis of any of the following documents, namely (a) an invoice issued by - (i) a manufacturer for clearance of — (I) inputs or capital goods from his factory or from his depot or from the premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, (II) Inputs or capital goods as such; (ii) an importer; (iii) an importer from his depot or from the premises of the consignments agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002"; It can be seen from the above reproduced provisions, that Cenvat credit can be taken by an assessee or invoice issued by a manufacturer for the clearance of input and capital goods. The provisions of the Rule 7(1A) of the Cenvat credit Rules, 2002, mandate that there should not be any denial of the Cenvat Credit on the ground that the documents do not contain all the particulars as required to be contained therein. The only provisions which mandates the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier unit. 2. Whether the Tribunal could have allowed the credit of deposit in contravention to the Modvat Credit Rules and Hon'ble High Court's decision in case of M/s. Eltex Rudy Ltd. v. Superintendent of Central Excise [1994] (70) EL.T. 208 (Mad.) (H.C.)] 3. Whether the Tribunal could have traveled beyond the show cause notice by citing the provisions of Rule 57-E which can only be applied at the suppliers end and not to the recipient's end. Heard Ms. Sejal K. Mandavia, learned Additional Standing Counsel on behalf of the appellant-revenue. The controversy is in a narrow compass and as the facts show does not give rise to any substantial question of law. In the impugned order dated 12th May 2004 made by the Tribunal it is recorded, and there is no dispute to this fact, that the person supplying goods to the assessee had made payment of duty at the rate which was in excess than the prescribed rate. The goods received by the assessee from the said supplier were accompanied by duty paid documents and on the basis of the same the assessee had availed of Modvat credit. The Tribunal has recorded that the assessment of the assessee cannot be disturbed without, in the first ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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