TMI Blog2023 (11) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... turns with the excise department covering both the sugar plant and the distillery - it is thus found that the sugar factory and the distillery are one unit as far as the Central Excise is concerned. Central Excise Act, Rules and notifications should be applied accordingly. It has already been held by this Tribunal while remanding the matter that it is not tenable to hold that some products can avail area-based exemption and others need not avail area-based exemption. Once the appellant had opted for the area-based exemption notification, it is not open for it to say that it will not avail the benefit for some goods manufactured and will avail the benefit for other goods - As the exemption notification is not confined to only such products as were mentioned in the declaration but was available to all the goods manufactured in the unit including the new products manufactured after the declaration and those manufactured using newer plants and machinery installed in the unit, the exemption was available to the denatured alcohol and CO 2 . All assessees are required to self-assess and pay duty. If duty is paid in excess of what is due or paid when it is not due, the assessee can c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods between 26.03.2013 and 2.11.2014 but availed CENVAT credit in December, 2014. The return for December, 2014 would have been filed in January, 2015 and the show cause notice was issued on January 04, 2016 within one year - there are no force in the submission of the learned counsel that the show cause notice was time barred. The impugned order needs to be modified to the extent of setting aside the denial of CENVAT credit on input services to the extent of Rs. 32,82,816/- for taking credit after six months from the invoice as there is no violation of notification no. 21/2004-CE (NT) consequent interest and reducing penalty under section 11AC to this extent - rest of the demand upheld - appeal allowed in part. - MR. DILIP GUPTA, PRESIDENT AND MR. P. V. SUBBA RAO, MEMBER (TECHNICAL) Present for the Appellant : Shri Aalok Arora, Advocate Present for the Respondent: Shri Rakesh Agarwal, Authorised Representative ORDER M/s. Rai Bahadur Narain Sugar Mills Ltd. [Appellant] filed this appeal to assail the de-novo Order in Original dated 6.02.2019 passed by the Commissioner of Central Goods and Services Tax, Dehradun after the matter was remanded to him by thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... They have put up additional facility as a distillery, adjacent to the said sugar factory. They did not take separate Central Excise registration for the said distillery. It would appear that the appellant are praying that not taking separate registration under Central Excise alone should not result in denial of CENAVT credit on capital goods and input service which are otherwise eligible when used for dutiable final products. We have perused certain sample ERI 1 Returns for the relevant period. It is clear that the appellants did discharge duty on carbon-di-oxide and denatured spirit cleared from the distillery during 2014. It is not clear as to how such duty payment was accepted/assessed when the revenue contends that the assessee is one license holder and availing the area-based exemption for such license. In other words, if the unit is one and the same as contended by the Revenue, the products which are otherwise eligible for exemption under the said notification are to be cleared without payment of duty. It is not tenable to hold that some products can avail area-based exemption and others need not avail area-based exemption. Admittedly, the lower authorities recorded that va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 4,57,436/- (Rupees Four Lakh Fifty Seven Thousand Four Hundred Thirty Six only), required to be reversed under Rule 6(3A) of the CCR, and the same is to be recovered under Rule 14 of the CCR read with Section 11A(1) of the Act (iv) I confirm recovery of interest as per applicable rates on the demand confirmed at (ii) and (iii) above under Rule 14 of the CCR read with Section 11AA of Central Excise Act, 1944; (v) I impose penalty of Rs. 26,47,849/-( Rupees Twenty Six Lakhs Forty Seven Thousand Eight Hundred Forty Nine only) under Rule 15(1) of the CCR read with Section 11AC(1)(a) of the Act, 1944 upon the party. The penalty would stand reduced to twenty five percent i.e to Rs. 6,61,962/- (Rupees Six Lakhs Sixty One Thousand Nine Hundred Sixty Two only) in terms of Section 11AC(1)(b) of the Act if the reduced penalty, along with the demand confirmed at (ii) (iii) above and interest confirmed at (iv) above, too is deposited within thirty days from the date of service of this order. The aforesaid dues shall be paid forthwith. Submissions on behalf of the appellant 9. On behalf of the appellant, learned counsel made the following submissions: (i) The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehemently supported the impugned order and asserted that there is no reason to interfere with it. He made the following submissions: (i) Undisputedly, the appellant added the distillery unit to its own sugar factory and had not set up a new unit. (ii) It was located in the same premises of the sugar factory. (iii) The appellant had not applied for a separate registration and it was operating under the same Central Excise Registration as the sugar factory. (iv) The appellant was also filing a single ERI Return for each period covering both the sugar factory and the distillery. (v) There is no case, whatsoever, to say that the distillery was a separate unit. It was an additional plant within the sugar factory. (vi) The contention of the appellant that it had to obtain separate permissions, licences or registration from the other Central/State Government authorities for the distillery unit makes no difference to the fact that it was part of the same unit. The permissions or licences by various other authorities are as per the requirements of the respective laws. For instance, the distillery produces alcohol which can be fit for human consumption or denatured and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 15. The appellant s contention is that since it had obtained various permissions from the State Excise, Labour laws, Pollution Control, etc. for the distillery unit, it should be treated as a separate unit. In our considered opinion, the treatment of a unit depends on the laws which apply. For instance, if a manufacturer has several factories located across the countries and has its head office in Mumbai, under the Income Tax Act, it will have a single Permanent Account Number and it will be assessed to corporate tax as one entity in Mumbai. On the other hand, every individual manufacturing facility across the country will have a separate central excise registration and will be assessed separately. Pollution control regulations will apply to each individual manufacturing facility, effluent treatment plant, etc. In short, various facilities of the company are treated as separate units under some laws and as one by some other laws and the concerned agencies deal with them accordingly. Merely because a separate licence was issued by the State Excise, Pollution Control, etc. for the distillery does not make it a different unit under the Central Excise. In this case, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund suo moto the duty paid under the Central Excise law. There is also a mechanism of issuing a Show Cause Notice under section 11A to recover duty not levied, not paid, short levied, short paid or erroneously refunded . There is no provision to issue a notice under section 11A for any other purpose. For instance, if duty is paid where one is not to be paid, there is no provision to issue a show cause notice calling upon the assessee as to why the excess duty paid should not be refunded. If duty is short paid, a show cause notice can be issued by the officers and if it is paid in excess, the assessee has to file a refund claim. 19. For all these reasons, we find that the denatured alcohol and CO 2 manufactured by the distillery were fully exempted from duty and therefore, no CENVAT credit of capital goods used in setting up the plant could be availed by the appellant. 20. CENVAT credit of Rs. 32,82,816/- on input services was sought to be denied as per notification no. 21/2014-CE (NT) which restricted availment of CENVAT credit to six months from the date of invoice. However, this notification came into force only from September, 01 2014. According to the appellant the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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