Custom, Excise & Service Tax Tribunal
M/S Electronic Components & Tuners vs Cce, Delhi Ii on 18 May, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV DATE OF HEARING : 05/05/2016. DATE OF DECISION : 18/05/2016. Excise Appeal No. 54146 of 2015 (SM) [Arising out of the Order-in-Appeal No. 89/CE/DLH/2015 dated 16/06/2015 passed by The Principal Commissioner (Appeals-I), Central Excise, Delhi I.] For Approval and signature : Honble Shri B. Ravichandran, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would 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 of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s Electronic Components & Tuners Appellant Versus CCE, Delhi II Respondent
Appearance Shri S.D. Gaur, Advocate for the appellant.
Shri M.R. Sharma, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri B. Ravichandran, Member (Technical) Final Order No. 51805/2016 Dated : 18/05/2016 Per. B. Ravichandran :-
The present appeal is against order dated 16/06/2015 of Principal Commissioner (Appeals-I), New Delhi. The appellants are engaged in the manufacture of SMPS Transformers liable to Central Excise Duty. They were availing Cenvat credit on nylon granules which are inputs for manufacture of bobbins. They have taken Cenvat credit on nylon granules and sent the same for job work to various job workers to make bobbins to be received by them for use in the further manufacture of SMPS Transformers etc. Certain verifications were made in August 2004 in the premises of the appellant. On enquiry the Department entertained a view that the nylon granules sent to job workers under the cover of private challans have not been duly received back as molding of bobbins and the appellant did not maintain proper records. Accordingly, proceedings were initiated against them which concluded in an order dated 31/8/2005 confirming a recovery of Cenvat credit of Rs. 3,96,270/- and imposing penalty of an equivalent amount on the appellant. On appeal the learned Commissioner (Appeals) remanded the matter back to the Assistant Commissioner for a fresh consideration with certain directions to check up the receipt of bobbins manufactured by the job workers back to the appellants unit and their usage in further manufacture by the appellant. The matter was again adjudicated by the Assistant Commissioner on 26/9/2008 by confirming the denial of credit and imposing penalty. On appeal, the learned Commissioner (Appeals) upheld the order. On further appeal the Tribunal vide final order No. 56038/2013 dated 26/3/2013 remanded the matter again to the Original Authority with specific directions to check up certain facts and to pass a fresh order. The Original Authority again passed a denovo order dated 13/5/2014. He confirmed the denial of credit and imposition of equivalent amount of penalty. On appeal, the Commissioner (Appeals) upheld the order. Aggrieved by this, the appellant has filed this appeal. As per seen from above progress of the case, the Original Authority decided this show cause notice three times, first time on original proceedings, second time on a remand by the Commissioner (Appeals) and third time on a remand by the Tribunal. It is apparent that the remand directions were not followed by the Original Authority as can be seen that the repeated remand happened mainly on the question of certain facts to be verified and commented upon by the Original Authority. Unfortunately, there is no improvement in the situation even in the third round of litigation.
2. The latest remand direction by the Tribunal is to the Original Authority for giving a clear finding as to whether (a) The appellant had maintained account for the receipt and utilization of the nylon granules in their RG-23, Part-I and Part-II account ;
(b) Whether the Cenvat credit availed nylon granules had been sent to the job workers under job work challans ; and
(c) Whether the nylon granules sent to the job workers had been received back by the appellant, even if, after 180 days.
3. The Tribunal observed that if the nylon granules had been received back the Cenvat credit has to be allowed. A perusal of the impugned orders by the lower Authorities clearly indicate that no attempt has been made to answer with clarity point no. (b) and (c). For point No. (a) it has been admitted that the appellant did maintain proper records of RG-23 Pt. I and Pt. II account. Regarding the point whether Cenvat credit availed nylon granules had been sent to the job worker under job work challans, it is clear that the case itself was made against the appellant to the effect that the nylon granules sent were not duly received back and were unaccounted. It was alleged that the nylon granules were sent under private challans. Considering that there is no prescribed specific document for movement of raw material to the job worker and the challan issued by the appellant formed apparently the basis of current demand, I find point no. (b) also to be answered in favour of the appellant. As already noted on point no. (b) and (c), the Original Authority even after specific remand direction simply recorded that the party could not produce any record or document evidencing receipt back of goods from job worker. The main issue at point no. (c) is to the effect whether the goods sent to the job worker had been returned after process. The same could have been cross verified for a finding on fact with production records etc. It is the case of the appellant from the beginning that they have received the molded bobbins and have used the same for manufacture of SMPS Transformers. They have in the first round of litigation itself, submitted the full production details of bobbins and their further use in their manufacture. Originally, the recovery of Cenvat credit was mainly sought to be made on the ground of not following proper procedure for sending the goods for process by job workers. This issue has already been discussed and requires no further reiteration that there is no general rule about the point whether procedural lapse, if any, could contribute to denial of a substantial benefit. The matter has to be looked into on a case to case basis depending upon the available evidence to collaborate a factual assertion. In the present case when the matter was remanded for a third time adjudication, it is expected on the part of the Original Authority to conduct a cross verification of other material evidence like usage of bobbins by the appellant, documents, if any, available at the job workers side to corroborate the job work and return of goods etc. A one line finding to the effect that party failed to produce record hence he is denying Cenvat credit is not legally sustainable. All the records available in the factory premises have been resumed by the visiting officers. Further, it is the Department which is making allegation of non-receipt of job worked goods back to the appellant, necessarily certain more verification is required to support such assertion.
4. I find that the lower Authorities did not adhere to the remand direction by the Tribunal to the full extent which is basically to find out the correct facts of the case. Any further remand will not serve any purpose. As such the original order as upheld by the impugned order is not sustainable in view of above analysis. As such, I am constrained to set aside the impugned order and allow the appeal.
(Order pronounced in the open court on 18/05/2016.) (B. Ravichandran) Member (Technical) PK ??
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