Custom, Excise & Service Tax Tribunal
Kellogg India Pvt. Ltd vs Commissioner Of Central Excise on 14 June, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Appeal No. E/3439/05 (Arising out of Order-in-Original No. 11/Commr./05-06 dated 31.05.2005 passed by Commissioner of Central Excise Belapur, Navi Mumbai) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical) ================================================
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 : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Kellogg India Pvt. Ltd.
Appellant Vs. Commissioner of Central Excise Belapur Respondent Appearance:
Shri Prashant Patankar, Consultant for appellant Shri S.V. Nair, Supdt. (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. Raju, Member (Technical) Date of Hearing: 14.06.2016 Date of Decision: 14.06.2016 ORDER NO Per: Raju The appellant M/s. Kellogg India Pvt. Ltd., were issued a notice seeking
(i) to recover duty on MRP based assessment on goods supplied to CSD canteens and Institutions,
(ii) to deny CENVAT credit taken before receipt of goods and
(iii) to recover Central Excise duty on certain invoices recovered from the appellant on which there were errors.
The matter was adjudicated by Commissioner and he confirmed the demands on Serial No. (i) and (iii) however he dropped the demand on Serial (ii) above. The matter was agitated by appellants before the Tribunal and the Tribunal vide order dated 16.01.2004 remanded the matter to the original adjudicating authority in respect of serial (iii) above on the basis of the invoices submitted by the appellant. The Tribunal also upheld the demand of serial (i) above however, remanded the case to the original adjudicating authority for re-determination of penalties. The matter was adjudicated again by Commissioner who vide order dated 19.07.2005 upheld the demands of serial (i), (ii) & (iii) and imposed penalty equivalent to total of the amount in serials (i), (ii) and (iii) above. Aggrieved by the said order, the appellant is before the Tribunal.
2. The learned Counsel argued that in so far as serial (i) of first para is concerned they have paid the duty. Learned Counsel argued that the issue regarding the valuation of the goods sold to institutional buyers is concerned, it is a matter of interpretation and the same has been interpreted differently by various Courts. He argued that in these circumstances no motive can be attached to them and therefore no penalty should be imposed.
2.1 Learned Counsel for the appellant argued that so far as the serial (ii) of first para is concerned the demand is wrongly confirmed as they had reversed the amount on their own and in the first order of the Commissioner no penalty was imposed. Since the said order of the Commissioner was not challenged by the Revenue, no penalty can now been imposed on them.
2.2 In respect of serial (iii) of first para the learned Counsel produced the invoices. He pointed out that demand has been raised due to discrepancy in the way serial numbers have been put on invoices. He pointed out that there were three kinds of invoices. In some invoices the serial number was put by franking machine, in some other invoices the serial nos. was printed and in other invoices there was no pre-printed or machine printed serial numbers. He however pointed out in all the invoices there was a computer generated serial numbers on the invoices. He pointed out that in all the invoices, listed in the enclosure to the show-cause notice, a clear mention has been made regarding the duty paid, vehicle No. and other details of the clearance. He pointed out that in the show-cause notice there is no allegation of clandestine removal. He also argued that no evidence has been produced by Revenue to allege that there was clandestine clearance of the goods.
3. In respect of serial number (i) of first para the learned A.R. pointed out that the duty liability has been admitted by the appellant and therefore the penalty should be imposed. He argued that if the Revenue had not detected then this revenue would have been lost.
3.1 Learned A.R. in respect of serial number (ii) of first para argued that the goods were received after actual availment of credit and therefore the appellants were not entitled to credit. He argued that though the appellants have reversed the credit taken but the penalty should be imposed.
3.2 In respect of serial number (iii) of first para the learned A.R. argued that different serial number of the invoices indicates that there were parallel invoices have been made which point towards clandestine clearance of the goods. He stated that the appellant had without reservation paid substantial amount of duty and therefore had admitted their guilt. In these circumstances he argued that no further evidence needs to be produced to establish clandestine clearance.
4. We have gone through the rival submissions.
4.1 In so far as serial number (i) of first para is concerned, we find that the issue of applicability of MRP based assessment to institutional sales has been contentious matter and there have been various judgements on either side. In the instant case no evidence has been adduced to show that the appellants were aware of their liability and had deliberately suppressed from the Revenue. In these circumstances no penalty can be imposed.
4.2 In so far as the serial number (ii) of first para is concerned, the appellant had reversed the said credit on their own and in the first adjudication order no penalty on this issue was imposed. Since the said order has not been challenged by the Revenue, no penalty can now be imposed on the appellant on this count. In fact the first adjudication order finalized the issue 4.3 In so far as serial number (iii) of first para is concerned we find that all the invoices produced by the appellant show that they have invoice numbers printed by computer. In some of the invoices the serial number has also been printed by franking machine and in some others the same has been pre-printed. In all the invoices, whether pre-printed or machine printed there is computer generated identical numbers on the invoices. Furthermore, all the invoices clearly shows the duty has been paid in respect of those invoices. We find that the statements of the Director (Finance & Administration) and the Director (Operations) of the appellant do not contain any admission of clandestine clearance. The show-cause notice does not contain any allegation or evidence of clandestine clearance. In these circumstances, we cannot sustain the charge of clandestine clearance.
4.4 In view of above, demand in respect of
(a) serial number (i) is upheld along with interest,
(b) serial number (ii) is set aside.
(c) serial number (iii) is set aside
(d) penalties are set aside.
5. The appeal is disposed of in the above terms.
(Operative part of the order pronounced in Court) (M.V. Ravindran) Member (Judicial) (Raju) Member (Technical) nsk ??
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1 7Appeal No. E/3439/05