Custom, Excise & Service Tax Tribunal
M/S. Uni Deritend Limited vs Commissioner Of Central Excise Nagpur on 6 October, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. E/812/2009-Mum. (Arising out of Order-in-Appeal No. SN/136/NGP/2009 dated 14/05/2009 passed by the Commissioner (Appeals) Central Excise & Customs, Nagpur) For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Uni Deritend Limited
:
Appellants
VS
Commissioner of Central Excise Nagpur
Respondents
Appearance
Shri Bharat Raichandani, Advocate for Appellants
Shri V.K.Singh, JDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of hearing : 06/10/2010
Date of decision : /11/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
The appellant has filed this appeal against the denial of Cenvat credit availed on inputs along with interest and equivalent amount of penalty.
2. The facts of the case are that, a show cause notice was issued to the appellant on the ground that they played an active role in the fraudulent availment of Cenvat Credit on Central Excise duty paying documents of Hot Rolled Trimming (HRT) with an intent to evade payment of Central Excise Duty from PLA Account at the time of clearance of their final products. The HRT were not physically received and used, for its final products but were diverted and sol to various parties in the local market. The lower authorities confirmed the demand along with interest and penalty. Against the said order, the appellants are in appeal.
3. The learned Advocate appearing on behalf of the appellants submitted that the appellants have procured the said input against the duty paid invoice issued by the second stage dealer (M/s. Nagpal Steels ) and the same has been cleared after processing on payment of duty. There is no allegation against the appellant that they have not received the goods in their factory and there is no statement of any of the representative of the appellants that they have not received the goods as per description in the invoice. He also submitted that the allegation made by the department that the said goods has not received in the factory of the appellant is baseless as they have not physically found in the factory of the appellant that these goods were not used in their manufacturing of their final product. Furthermore before the processing the said goods, appellants carried out the quality test of the input procured by them as per the invoice. He further submitted that there is no allegation that the appellants had not received the impugned goods against the duty paid invoice and there is also no allegation that they have not discharged their duty liability. He further submitted that in the appellants own case on identical facts this Tribunal Vide Order No. A/1434/C-IV/SMB/2007 dated 11.10.2007 had allowed their appeal. Following the decision of M/s. Rishabh Industries Vs. Commissioner of Central Excise, New Delhi reported in 2003 (153) ELT 114 (Tri.Del.)], which was confirmed by the Honble High Court of Delhi and same is reported in 2008 (228) ELT 347 (Del.) Commissioner of Central Excise, Delhi-II and submitted that as per the CBEC Circular No.766/82/2003-CX dated 15.12.2003, the Board had clarified that on the issue of availment of credit by the user manufacturer, it is clarified that action against the consignee to reverse/recover the Cenvat Credit availed of in such cases need not be restored to as long as the bona fide nature of the consignees transaction is not in dispute. In the case of supplier has received payment from the buyer. (including the amount shown as duty of excise) i.e. the person taking CENVAT Credit has made payment of invoice amount action should also be taken against the supplier under Section 11D and 11DD of the Central Excise Act, 1944. Hence, the demands are not sustainable.
4. On the other hand, the learned DR submitted that it is a case of M/s. Ispat Industries Ltd. sold the HRT through auction to M/s. Shree Durga Iron & Steel, who diverted the same to Virangam without issuing invoices to them and issued invoice to the second stage dealer M/s. Nagpal Steel who availed credit of the Central Excise duty who further issued invoices to the appellant and the appellant has taken the credit for the same without receiving the goods supplied by M/s. IIL which was cleared against payment of duty. These facts have been admitted by both the dealers i.e. first stage dealer and the second stage dealer (supplier to the appellant). In that case, the department has been able to prove that the credit has been taken by the appellants without receiving the goods. Hence the impugned order are sustainable.
5. On careful examination of the submission made by both sides. I find that in this case it is not disputed by both the parties that the appellants has not received the inputs against the duty paying document. Only dispute in this case is that the inputs which were received by the appellant are not those inputs which are mentioned in the invoice, this allegation can be verified only by inspection of the input in the factory of the appellants only, which could not be done in this case as the inputs have already gone in the process of manufacturing. Being a prudent buyer the appellant has taken the credit on a duty paying document which is not in dispute and same has been cleared after processing by paying duty on the same at the time of clearance. In that situation, if there is an allegation that the appellant has taken the credit at bonafide belief same is to be dealt with in accordance with the CBEC Circular No. 766/82/2003/-CX dated 15.12.2003 wherein it has been clarified that if any action is to be taken; that is to be taken against the supplier of the goods. On the identical facts, this Tribunal has already held that demand is not sustainable in the appellants own case vide order dt.11/10/2007, which has been accepted by the department, hence following the judicial discipline, I am also of the view that the appellant has taken the credit on the duty paid invoice in accordance with the law. In the facts and circumstances of the case, the demand, interest and penalty are not sustainable. Accordingly impugned order is set aside and the appeal is allowed.
(Pronounced in court on /11/2010)
(Ashok Jindal)
Member (Judicial)
Sm
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