Customs, Excise and Gold Tribunal - Delhi
Hindustan Coca Cola Beverages Pvt. Ltd. vs Cce on 15 November, 2006
Equivalent citations: 2006(108)ECC504, 2006(109)ECC504, 2006ECR504(TRI.-DELHI), 2006(200)ELT143(TRI-DEL)
ORDER M.V. Ravindran, Member (J)
1. This appeal is directed against order in appeal dated 08/09/2004.
2. The relevant fact that arise for consideration are the appellants are availing Cenvat credit on the duty paid inputs used by them. During the scrutiny of the records by the audit party, it was noticed that appellant had availed excess modvat credit of Rs. 59,950/- in respect of the inputs on which credit note was issued by the appellant for various discounts. Show cause notice was issued to the appellant for reversal of the said amount and also for imposition of penalty. Appellant contested the show cause notice on the ground that the reduction in the rate in itself will not amount to lesser payment of duty paid on inputs. The reduction in rate is nothing but a commercial arrangement with their suppliers. The learned adjudicating authority did not accept these contentions and confirmed the demand and imposed equivalent amount of penalty. On an appeal, learned Commissioner (Appeals) also concurred with the findings of the adjudicating authority and upheld the order. Hence this appeal.
3. The authorized representative appearing on behalf of the appellant submits that the issue is now squarely covered by the various decisions of the Tribunal. It is his submission that the amount of discount claimed by them from their suppliers is for many reasons, like it may be due to cash discount or quantity discount that was offered by the supplier. It is his submission quantity discount means the discount is granted to them for lifting of a specified quantity. He relies upon the decision of the Tribunal in the case of Eveready Industries India Ltd. v. Commissioner of Central Excise, Allahabad as reported at 2000 (120) E.L.T. 0379 - Tri. and in the case of Central Excise, Surat v. Trinetra Texturisers Pvt. Ltd. as reported at 2004 (166) E.L.T. 384 (Tri. - Mumbai).
4. Learned DR on the other hand submits that the provisions of Cenvat credit rules are specifically made for this purpose. It is his submission that the appellant had to first verify correct amount of duty paid by the supplier to avail the Cenvat credit. It is his submission that if subsequent issuance of credit, reduced the basic value of the goods supplied, then in that case, the amount of credit availed by the appellant should be proportionately reduced.
5. Considered the submissions made at length by both sides and perused records. It is seen from the records that denial of the modvat credit has arisen only on the ground that the appellants have issued debit notes to their suppliers for the amount of discount to be received by them from their suppliers due to the early payment, upliftment of the quantity as contracted etc. This in itself would not reduce the assessable value of the goods received by the appellant. If any reduction of assessable value has to be claimed it has to be by the supplier at his end. Once an assessment is done by the authorities at the suppliers end, there cannot be any reassessment of the goods nor there can be any reduction of the excise duty paid by the supplier until and unless it is brought on record that there was short supply of the inputs at the recipient's end. In this case, there is no allegation that there is short receipt of the inputs, by the appellant.
6. The decision of the Hon'ble Tribunal in the case of Commissioner of Central Excise v. Trinetra Texturisers Pvt. Ltd. (Supra) squarely covers the issue. The Hon'ble Tribunal in its order has held as under:
3. I note that the grounds in the appeal are totally misplaced. The departmental authorities have committed high-handedness and illegality by coercing the respondents to reverse the Modvat Credit on a proportionate basis with reference to the credit notes issued by the input supplier. The effect of the credit note is that the purchaser has received the input at a cheaper price equivalent to the amount of credit note. Whether on account of issue of such credit notes, the assessable value of the input had to be scaled down and whether on such scaling down, the duty that has been paid by the supplier, as reflected in the invoices and the other statutory records of the supplier, has to be scaled down or not is a matter that has to be determined by the Central Excise authorities in charge of the suppliers unit. There is no evidence on record to suggest that such exercise was in fact carried out and such a duty reduction in respect of the consignments received by the respondents has actually occurred and the corresponding duty paying documents had been corrected. This having not been done, the entire exercise at the end of the purchaser factory for cutting down the credit, was without the authority of law. It has not been demonstrated in the appeal as to how the original exercise of pruning down the credit amount is supported by the provisions of the law. It is well settled legal position that the Central Excise authorities in charge of factories receiving inputs, have no jurisdiction to reassess the duty on inputs received [Kerala State Electronic Corporation v. CCE, Kochi ].
7. Accordingly, respectfully following the decision and order of the Hon'ble tribunal in the case of Trinetra Texturisers Pvt. Ltd. (supra), the impugned order is set aside and appeal allowed with consequential relief, if any.
(Dictated and pronounced in the open court)