Custom, Excise & Service Tax Tribunal
R N Alloys vs Commissioner, Cgst-Dehradun on 6 November, 2023
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CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO.III
Excise Appeal No.50333 of 2021
(Arising out of Order-in-Appeal No.DDN/EXCUS/000/APP/42/2020-21 dated 08.07.2020 passed
by the Commissioner (Appeals), Central Goods & Service Tax, Dehradun)
M/s. R.N. Alloys, Appellant
Plot E-48, Industrial Area,
Bahadrabad, Haridwar,
Uttarakhand-249 408.
Versus
Commissioner of Central Goods & Respondent
Service Tax, E-Block, Nehru Colony, Haridwar Road, Dehradun, Uttarakhand-248 001.
APPEARANCE:
Shri Alok Arora, Advocate for the assessees. Shri Rakesh Agarwal, Authorised Representative for the Revenue.
CORAM:
HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL) HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER No.51509/2023 DATE OF HEARING:09.08.2023 DATE OF DECISION:06.11.2023 BINU TAMTA:
Challenging the Order-in-Appeal No.DDN/EXCUS/000/APP/42/ 2020-21 dated 08.07.2020 passed by the Commissioner (Appeals), the appellant has filed the present appeal.
2. The brief facts of the case are that the appellant is engaged in the manufacture of Aluminium Alloy Die Cast Components falling under 2 heading number 7616000 of the Central Excise Tariff Act, 1985. The process of manufacture involved was Die Casting of Components from Aluminium Metal followed by finishing through machines. An Audit of the records of the appellant for the period February, 2015 to March, 2016 was conducted and it was found that the appellant had manufactured Aluminium Die Cast Components Engine part on job work basis for M/s Rockman Industries Ltd. and took job work charges @ Rs 11 or 11.60% and paid service tax thereon. The Revenue was of the view that the process of conversion of Metal into Engine Components involved excisable goods and this manufacture/production of goods does not constitute a taxable service as defined under the Finance Act, 1994 because such manufacture or production falls under the Negative List as defined under section 66 D (f) of the Finance Act, 1994 and, therefore, the service tax paid by the appellant was not applicable on the job work charges.
3. In order to avail the exemption from payment of duty under job work Notification No. 214/1986-CE dated 25.03.1986, the goods manufactured at the end of principal manufacturer using the goods manufactured by the appellant were required to undergo payment of duty or if such goods are sold as such the duty must be paid on such goods. The principal manufacturer - M/s Rockman Industries Ltd. were availing area exemption under Notification No. 50/2003 - CE dated 10.06.20003 and, therefore, were not paying central excise duty on their final products. Since the principal manufacturer was exempted from payment of duty under the area exemption notification, the conditions for grant of exemption under the job work notification were 3 not fulfilled and, therefore, the job worker, i.e., the appellant has to be treated as the actual manufacturer of the goods and was liable to pay excise duty on the goods so manufactured by them. On verification of the cenvat records of the appellant, it was found that they had availed cenvat credit against the debit notes, which is not a valid document as per Rule 9 of the Central Excise Rules, 2002 (hereinafter referred to as CER, 2002) to issue invoices for availing cenvat credit and they were issued by various parties, which were not registered.
4. Accordingly, show cause notice dated 28.04.2017 was issued to the appellant on two counts :
(i) the demand of duty to the extent of Rs 35,15,228/ on account of non-payment of duty in capacity of job worker alongwith interest and penalty.
(ii) demand of Rs 6,75,737/ on account of improper availment of cenvat credit in respect of goods returned by un-registered or exempted customers, who issued the debit notes along with interest and penalty.
5. The adjudicating authority vide order dated 19.07.2018 confirmed the demand under both the counts in terms of the show cause notice. Being aggrieved, the appellant filed an appeal, however, the Commissioner (Appeals) by the impugned order dismissed the same and affirmed the order-in-original. The appellant has now filed the instant appeal before this Tribunal.
6. We have heard Mr. Aalok Arora, the learned Counsel for the appellant and also Shri Rakesh Agarwal, the Authorised Representative for the Revenue and have perused the records of the case. 4
7. The learned Counsel for the appellant submitted that the liability to pay duty was on the principal manufacturer i.e. M/s Rockman Industries Ltd since the raw material was sent by them on job work challan. It was also their submission that the process carried out by the appellant does not emerge into marketable goods as the goods were unfinished Aluminium Casting and hence, no duty was payable thereon. The learned Counsel had also taken the plea of revenue neutral situation by submitting that even if goods were liable to duty, cenvat credit on raw material and capital goods would be available to them and duty liability on value addition would be equal to service tax paid in cash. They relied on the decision of the Rajasthan High Court and also of this Tribunal to say that cenvat credit is permissible on the basis of debit notes. Lastly, according to them extended period of limitation cannot be invoked as there is no suppression on their part.
8. The Revenue relied on the findings of the Authorities below and according to them from the process involved, it is clear that the appellant was manufacturing Pressure Die Component from Aluminium, which amounts to manufacture and were, therefore, liable to pay excise duty. They also referred to the non-compliance of the condition of the job work exemption notification in the present case and in support thereof relied on the decisions laying down the principles for construction of exemption notification. On the issue of cenvat credit, the learned Authorised Representative for the Revenue referred to the findings that the debit notes are not the specified document as per Rule 9, therefore, no benefit of cenvat credit can be allowed to the appellant. 5
9. The following two issues arise for our consideration :
"(i) whether the process of conversion of metal into Engine Components carried out by the appellant amounts to manufacture and if so whether he is entitle to avail exemption from payment of duty under the job work Notification No. 214/86-CE dated 25.3.1986.
(ii) whether the appellant can avail cenvat credit on the basis of debit notes which are not the prescribed document under Rule 9 of the CCR, 2004."
10. The first issue, which needs to be considered is whether the process involved in the job work contract with M/s Rockman amounts to manufacture. We find that M/s Rockman in terms of the contract supplied the raw material, i. e., Aluminium Ingots to the appellant, who processed them by using specific moulds and dies supplied by M/s. Rockman, whereby the product Aluminium Die Casting Components were produced. The term 'manufacture' has been defined in Section 2
(f) of the Central Excise Act,1944 as under :
"2 (f) "manufacture" includes any process--
(i) incidental or ancillary to the completion of a manufactured product;
(ii) which is specified in relation to any goods in the Section or Chapter notes of the Schedule to the Central Excise Tariff Act, 1985 as amounting to manufacture, (5 of 1986 ). and the word"
manufacturer" shall be construed accordingly and shall include not only a person who employs hired 6 labour in the production or manufacture of excisable, goods, but also any person who engages in their production or manufacture on his own account;]"
It is a settled principle of law as interpreted in catena of decisions that the definition of the term 'manufacture' is an inclusive definition and has to be given wider import, so any person who is engaged in any activity as specified in the clauses of section 2(f) would fall in the category of a manufacturer and would be liable to pay the excise duty unless exempted. We are therefore of the opinion that the activity carried out by the appellant who happens to be a job worker amounts to manufacture, more particularly when it says that the word 'manufacture' shall also include any person, who engages in their production or manufacture on his own account. We find it relevant to take note of the factual situation as noted by the Adjudicating Authority that they were involved in two types of transactions:-
"I- Firstly, to make pressure die components and sell it on payment of central excise duty to the customers, namely M/s Havells India Pvt. Ltd., M/s Onkar Engine & Generator (P) Ltd etc. after availing cenvat facility provided under the CCR, 2004.
II- Secondly, they were also manufacturing pressure die components from Aluminium supplied by M/s Rockman on job work basis."
Taking into account the above two types of transactions, it is sufficient to hold that the process undertaken by the appellant amounts to manufacture and that is why he was paying excise duty when he was 7 selling the same product to other companies. This also nullifies the contention of the appellant that the goods manufactured are not marketable just because they are unfinished. In fact, the Larger Bench in Thermax Babcock & Wilcox Ltd V Commissioner of C.EX., Pune, 2018 (364) ELT 945,decided the issue whether the job worker was liable to pay duty on intermediate manufacture of parts of boiler against the party.
11. Having come to the conclusion that the Die Casting of Components from Aluminium after finishing through machines results in manufacture, the necessary corollary will be that the appellant is liable to pay excise duty and not service tax. The provisions of section 66D of the Finance Act, 1994 provides for negative list and says :
"66D The negative list shall comprise of the following services :
(a) services by Government or a local authority excluding the following services to the extent they are not covered elsewhere--
(i) services by the Department of Posts by way of speed post, express parcel post, life insurance and agency services provided to a person other than Government;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers; or
(iv) [any service] ,[support service], other than
services covered under clauses (i) to
(iii)above, provided to business entities;
(b) services by the Reserve Bank of India;
(c) services by a foreign diplomatic mission located in India;
(d) ...........................
(e) Trading of goods;8
(f) Services by way of carrying out any process amounting to manufacture or production of goods excluding alcoholic liquor for human consumption;"
Thus, from careful reading of Section 66 D(f) of the Finance Act, 1994, there is no ambiguity that the statute does not envisage levy of service tax on any process amounting to manufacture or production of goods.
Consequently, we hold that the payment of service tax by the appellant on the job charges collected on Die Casting of Components from Aluminium Metal was totally unwarranted and against the spirit of the law as quoted above. In fact, the appellant was required to pay central excise duty on the said activity which amounts to manufacture and was not required to pay service tax.
12. To consider the plea taken by the appellant that the liability to pay the excise duty was on the principal manufacturer, i.e. M/s Rockman, who supplied the raw material etc. and they being the job worker, were exempted from payment of duty under the Notification No. 214/ 86-CE dated 25.3.1986. We have no issue that Notification No 214/86 grants exemption to job workers from payment of duty, however, the same is subject to the condition of filing of the undertaking by the principle manufacturer. The relevant provisions of the said notification are as under :
"Specified goods manufactured in a factory as a job worker and used in the manufacture of final products In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts goods specified in column (1) of the Table hereto annexed (hereinafter 9 referred to as the said goods) manufactured in a factory as a job work and :-
(a) used in relation to the manufacture of final products, specified in column (2) of the said Table,
(i) on which duty of excise is leviable in whole or in part; or
(ii) for removal to a unit in a free trade zone or to a hundred per cent. export-oriented undertaking or to a unit in an Electronic Hardware Technology Park or Software Technology Parks or for supply to the United Nations or an international organization for their official use or for supply to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 108/95-Central Excises, dated the 28th August, 1995, or
(iii) for removal under bond for export, or
(b) cleared as such from the factory of the supplier of raw materials or semi-finished goods -
(i) on payment of duty for home consumption (on which duty of excise is leviable whether in whole or in part); or
(ii) without payment of duty under bond for export; or
(iii) without payment of duty to a unit in a free trade zone or to a hundred per cent. export-
oriented undertaking or to a unit in an Electronic Hardware Technology Park or Software Technology Parks or supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 108/95-Central Excises, dated the 28th August, 1995"], from the whole of the duty of excise leviable thereon, which is specified in the schedule to the Central Excise Tariff Act, 1985 (5 of 1986) 10 (2) The exemption contained in this notification shall be applicable only to the said goods in respect of which :-
(i) the supplier of the raw material or semi-
finished goods gives an undertaking to the [Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise] having jurisdiction over the factory of the job worker that the said goods shall be -
(a) used in or in relation to the manufacture of
the final products in his factory; or
(b) removed from his factory without payment of
duty
(i) under bond for export; or -
(ii) to a unit in a free trade zone or to a hundred per cent. export-oriented undertaking or to a unit in an Electronic Hardware Technology Park or Software Technology Parks or supplied to the United Nations or an international organization for their official use or supplied to projects funded by them, on which exemption of duty is available under notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 108/95-Central Excises, dated the 28th August, 1995; or".
(c) removed on payment of duty for home
consumption from his factory, or
(d) used in the manufacture of goods of the
description specified in column (1) of the table hereto annexed by another job worker for further used in any of the manner provided in clause (a), (b) and (c) as above.
(ii) the said supplier produces evidence that the said goods have been used or removed in the manner prescribed above; and
(iii) the said supplier undertakes the responsibilities of discharging the liabilities in 11 respect of Central Excise Duty leviable on the final products.
Explanation I. - For the purposes of this notification, the expression "job work" means processing or working upon of raw materials or semi-finished goods supplied to the job worker, so as to complete a part or whole of the process resulting in the manufacture or finishing of an article or any operation which is essential for the aforesaid process.
Explanation II shall be omitted. (vide Notification No. 33/2000-C.E., dated 31-3-2000) Description Description of Inputs of final product (1) (2) All goods falling under All goods falling under the the First Schedule to First Schedule to the the Central Excise Central Excise Tariff Act, Tariff Act, 1985 (5 of 1985 (5 of 1986), other 1986), other than than the following, namely high speed diesel oil :-
and motor spirit,
commonly known as (i) matches;
petrol.
(ii) fabrics of cotton or
man-made fibres falling
under Chapter 52, Chapter
54 or Chapter 55 of the
First Schedule to the said
Act;
(iii) fabrics of cotton
or man-made fibres
falling under Heading
Nos. 58.01, 58.02,
58.06 (other than
goods falling under
sub-heading No.
5806.20), 60.01 or
60.02 (other than
goods falling under
sub-heading No.
6002.10) of the First
Schedule to the said
Act."
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The Notification No 214/86 has been the subject matter of interpretation in various decisions of the Tribunal as well as of the Supreme Court. The condition of submitting an undertaking by the principal manufacturer or the supplier of the raw material as provided in the notification has been held to be a substantive condition and not merely a procedural one for the reason that it shifts the burden of the tax liability from the job worker to the supplier of raw materials or semi-finished goods. It has also been held that the above procedure set out in the notification is a pre-requisite and it being the mandate of law that unless such an undertaking is given, the benefit of exemption notification shall not be attracted and the job worker only is liable to discharge the duty liability at the time of clearance of the said goods from the premises of the job worker, Kartar Rolling Mills Vs. CCE 2006 (197) ELT 151 (SC). We are not multiplying the decisions taking such a view, which is settled over the period and has been consistently followed, however, we would like to refer the decisions of the Larger Bench in the case of Thermax Babcock & Wilcox Ltd V Commissioner of C.EX., Pune, 2018 (364) ELT 945, which has not been challenged by the party and has been followed by the Tribunal in a latest decision in Commissioner, Central Excise & CGST, Jodhpur-1 V Khemani Metal Industries Pvt. Ltd, Excise Appeal No. 51328 of 2019 dated 30.06.2013 observing that the Larger Bench decision has set the controversy at rest. The non-compliance of the said condition of the Notification No 214/86 by the principal manufacturer 13 has resulted into duty liability upon the job worker. Relevant paragraph of the decision of the Larger Bench is quoted hereunder :
"7.6 The job worker being the manufacturer of goods is liable to pay duty on goods manufactured by him albeit on job work. The ownership of the goods is immaterial for the purpose of levy of duty and thus any person who has undertaken the activity of manufacture is liable to pay duty. In order to save the job worker from payment of duty the principal manufacturer has to own the liability to pay such duty. It is only by virtue of the Notification No. 214/86-C.E., dated 25-3-1986 that the liability of the job worker to pay duty is transferred to the principal manufacturer who undertakes to pay duty.
7.7 The intention of enactment of Notification (supra) was to shift the liability of payment of duty from job worker to the principal manufacturer under certain conditions as provided in the said notification.
There is no blanket machinery provisions in the Central Excise law under which the liability to pay duty is transferred from the job work manufacturer to another person i.e. principal manufacturer. However when the principal manufacturer does not own up the liability to pay duty on finished goods, the provision of Notification No. 214/86-C.E., dated 25-3-1986 does not apply. In that case, it is the ultimate manufacturer i.e. the job worker who has to pay the duty. Following the procedure and conditions of the Notification (supra) only by the principal manufacturer, the job worker would be saved from payment of duty on goods manufactured by him."
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13. We may now consider whether in the facts of the present case, the appellant is entitled to the benefit of the exemption notification. The principal manufacturer- M/s Rockman issued challan under Rule 4 (5)
(a) of the CCR, 2004 for the purpose of delivery of the material at the factory premises of the appellant for undertaking job work of complete manufacturing. The agreement between the appellant with M/s. Rockman Industries for manufacture of goods on job work basis, particularly Clause 6 says :
"6-Rockman will give raw material ADC-12 and bop (sleev rear and anchor pin rear) on 57 F4 to RN Alloys for production on job work basis. Shot rate will be 22/- and die will be run on 420 ton machine. Rockman payment terms will be 45 days after received of material."
Thus, the principal manufacturer - M/s Rockman supplied the raw material/inputs to the job worker, the appellant herein, as per the challan under Rule 4 (5 ) (a) of CCR, 2004. If the appellant had to avail the benefit of the exemption from payment of duty under the notification, then it was incumbent upon them to ensure that the principal manufacturer gives an undertaking in terms of the notification that the said goods shall be removed on payment of duty for home consumption from his factory, which they failed to do. There is no dispute that the principal manufacturer had neither given any such undertaking nor paid the excise duty. Consequently, the appellant cannot escape the liability to pay the excise duty on the goods manufactured by them on job work basis.
1514 Since we have decided the issue of excisability against the appellant, we would now consider whether the levy of interest and the penalty is maintainable in the present case. The appellant has deliberately indulged in evading the duty liability in as much as he has been paying the excise duty in respect of the supply of the same goods to other customers, which shows that the appellant is aware of the duty liability. On the one hand, the appellant has been taking shelter under the exemption notification to say that the liability to pay the excise duty is on the principal manufacturer but, on the other hand, he is avoiding the conditions under the Notification, whereby he would be eligible to seek exemption. The appellant cannot be allowed to pick and choose what is beneficial to him and discard the conditions specified. That the ingredients of willful suppression of facts so as to avoid the payment of central excise duty exists. The Authorities below are justified in imposing penalty under the provisions of Section 11 AC of the Act, relying on the decision of the Apex Court in the case of Chairman, SEBI Vs. Shriram Mutual Fund - 2006 5 SCC 361 that mens rea is not an essential element for imposing penalty. Further, in view of the law laid down in Union of India Vs. Rajasthan Spinning and Weaving Mills - 2009 (238) ELT 3 (SC) that once the ingredients to attract the provisions of Section 11 AC are attracted, the discretion to quantify the amount of penalty ends and in view thereof, the Adjudicating Authority has rightly imposed the penalty equal to the duty amount. Similarly, interest under Section 11AA has also been rightly imposed as the appellant knowingly and deliberately evaded payment of excise duty.
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15. The second issue as to whether the appellant is entitled to take cenvat credit on the strength of debit notes, which is not the document prescribed under Rule 9(1) of the CCR, 2004 to avail the cenvat credit, is no longer res-integra and has been decided by the High Court of Rajasthan in the case of Commissioner of Central Excise, Jaipur -1 Vs. Bharti Hexacom Ltd, 2018 (360) ELT 515. The Division Bench decided the issue after considering the long line of decisions, where same issue was considered and decided infavour of the party and against the Revenue. The various decisions as cited are:-
1. Karur KCP Packaging Pvt. Ltd.,vs. Commissioner -2009 (16) STR 609 (Tribunal).
2. Commissioner vs. Grasim Industries Ltd., 2011 (24) STR 691 (Tribunal).
3. VSL Steels Ltd., vs. Commissioner 2013 (295) ELT 725 (Tribunal)
4. Supreme Industries Ltd., vs. Commissioner 2014-TIOL-115-CESTAT-MUM.
5. Jaquar & Co. v. Commissioner -2015 (39) STR 273 (Tribunal)
6. Aditya Polysack Pvt. Ltd., vs. Commissioner -
2015-TIOL-996-CESTAT-Delhi
7. Emmes Metal Pvt. Ltd., vs. Commissioner-
Appeal No. E/1015 of 2011, decided on 09.03.2016
8. Commissioner vs. Nav Bharat Metallic Oxide Industries Pvt. Ltd., - Order of CESTAT-
Ahmedabad
9. Mahanagar Gas Ltd., vs. Commissioner
-Order of CESTAT-Mumbai.
All the above decisions in clear terms have laid down the principle that cenvat credit can be allowed on the basis of the debit note if they 17 contain the information as required under Rule 4A of Service Tax Rules, 1994. In fact, the observations of the Tribunal in the case of Grasim Industries Ltd (supra) is to the effect that if the debit notes contain all the details, which are required to be mentioned in the invoice and except for its name, it can be treated as an invoice and cenvat credit can be allowed on the basis of the said debit note. Similarly, in the case of Navbharat Metallic Oxide Industries(Supra), this Tribunal reiterated the principle that a debit note could also belong to the category of invoice, where all the prescribed details are available and further, the Revenue has not been able to bring on record as to what are the standard elements of an invoice or bill or challan, which are lacking in the case of debit note. The Mumbai Bench in Mahanagar Gas Ltd. (supra) has also held that debit note is at par with the documents prescribed under Rule 9(1) of CCR, 2004 and, therefore, held that the debit note containing all the details as required under Rule 9 (2) of CCR, 2004 is a valid document for the purpose of taking cenvat credit. In VSL Steels LTD (Supra), the Tribunal took the view that one should not look at the title of the document but should rather see the contents thereof to determine its status.
16. The learned Counsel for the appellant has also relied on a latest decision of the Ahmedabad Bench in Kevin Process Technology Pvt Ltd V Commissioner of C EX., Ahmedabad 2021 (378) ELT 441, wherein the Tribunal relying on Bharti Hexacom (supra) has held that as per Rule 9 of CCR, 2004 not only invoice or bill of entry but any other document can also be valid document for availing credit and debit 18 note containing all the details as required to be mentioned in cenvatable documents.
17. We are fully bound by the law laid down in these decisions and particularly the decision of the Rajasthan High Court in Bharti Hexacom (supra), which seems to have been accepted by the Revenue as no appeal seems to have been filed challenging the same. In the light of the law laid-down, we may now examine the facts of the present case. The learned Counsel for the appellant had filed the supplementary paper book on 3rd June 2022, where at Serial No.4, he has annexed the copies of the debit notes along with the chart showing the details of the debit notes. On perusal of the debit notes, we find that they contain all the particulars and details, as are required to be mentioned in the invoice to avail the cenvat credit. Consequently, the appellant is entitled to claim the cenvat credit and the Authorities below have erred in denying the same. Both the Adjudicating Authority as well as the Appellate Authority have rejected the claim for cenvat credit on the ground that the debit notes were not a proper document as prescribed under Rule 9 of CCR, 2004 for availing cenvat credit and, therefore, did not examine the particulars given therein in terms of Rule 4A of Service Tax Rules. Though the law has been well settled by the earlier decisions as early as in the year 2009 and subsequently, thereafter and finally by the Rajasthan High Court in the case of Bharti Hexacom(supra), which was much earlier in time on 15.11.2017, whereas the order by the Adjudicating Authority was passed on 19.7.2018 and by the Appellate Authority on 8.7.2020, however, both the Authorities failed to take note of the law as enunciated by the 19 Tribunal and later affirmed by the Rajasthan High Court by which they were bound. In the case of Pharmalab Process Equipments Pvt Ltd Vs. Commissioner 2009 (16) STR 94, Ahmedabad Bench had observed:
"Since it is not clear as to whether the same documents which were produced before me were produced before the Assistant Commissioner or not, the matter has to go back to the Assistant Commissioner who shall go through the documents, verify whether service has been received and whether all the particulars as required under the Rules are available in the debit notes and adjudicate the matter afresh. If documents contain details required under Rule 98 (sic) [9(2) of CENVAT Credit Rules, benefit of Service Tax Credit may be extended."
Similarly, in the case of Shri Cement Limited versus commissioner of Central Excise 2013 (29) STR 77, the Principle Bench of the Tribunal while allowing the Appeal of the party observed :
" 6. At the interest of revenue, if the adjudicating authority so chooses he may send copies of debit note relied by Assessee to the concerned jurisdictional officer for verifying whether the service tax realised by those debit notes have gone into the treasury."
18. Considering the above two decisions of this Tribunal, we could have remanded the matter to the Adjudicating Authority, however, in the facts of the present case, when the Department has not raised any objection to the debit notes in any respect, it would be a futile exercise. The documents, i.e., debit notes produced are self- explanatory as to the details, which are required under Rule 4A of the ST Rules and, therefore, unnecessarily dragging the party all the way again to the litigation is not justifiable, moreso when the departmental authorities had adopted a very callous attitude in not considering even 20 the contents of the documents in the light of the decisions of the Tribunal. Hence the demand of Rs 6,75,737/- along with interest and penalty is not sustainable.
19. The appellant has raised the issue of revenue neutrality referring to a latest decision of this Tribunal in M/s Parvatiya Plywood Pvt. Ltd. Vs. Commissioner of Customs, Central Excise and Service Tax, Meerut-II - Final Order Nos.51158-51167/2022 dated 08.12.2022, where the explanation added in section 4(1) after clause
(b) of the Act (w.e.f.) 14.05.2003 was considered to say that where excise duty have not been collected separately by the manufacturer- seller, the price charged shall be treated as cum-duty, excluding the sales tax and other taxes, if any actually paid. We therefore, remand the matter to the Adjudicating Authority to re-compute the duty liability in terms thereof and determine the actual duty liability of the appellant.
20. The period in dispute is from February 2015 to March 2016. Since the show Cause Notice has been issued on 28.4.2017, the delay as pointed out by the Department is of merely two months, i.e. February and March, which also, in the facts of the case, as discussed above, are covered by virtue of the extended period of limitation.
21. In view of our discussion above, we are of the view that the appellant is liable to pay the excise duty as determined along with interest and penalty. On the other issue, we hold that the appellant is entitled to claim the cenvat credit on the basis of debit notes and, therefore, the interest under section 11 AA of Central Excise Act and 21 penalty under Rule 15 (3) CCR, 2004 read with section 11 AC of the Act are not leviable thereon.
22. The Appeal is, partly allowed in the above terms and the matter is remanded to the Adjudicating Authority for the purpose of re- computation only.
[Order pronounced on 6.11.2023] (Binu Tamta) Member (Judicial) (P. V. Subba Rao) Member (Technical) Ckp.
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