Custom, Excise & Service Tax Tribunal
M/S. Jamna Auto Industries Ltd vs C.C.E.&S.T., Indore on 8 June, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 08.06.2015
For Approval & Signature :
Honble Mr. S.K. Mohanty, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No. E/50147/2014-EX[SM]
[Arising out of Order-in-Appeal No.IND/CEX/000/APP/ 106/2013, dated 24.09.2013 passed by C.C.E.&S.T. (Appeals), Indore]
M/s. Jamna Auto Industries Ltd. Appellant
Vs.
C.C.E.&S.T., Indore Respondent
Appearance Mr. B.L. Narasimhan, Advocate Mr. Vipul Agarwal, Advocate - For Appellant Mr. G.R. Singh, DR - For Respondent CORAM: Honble Mr. S.K. Mohanty, Member (Judicial) Final Order No.__54133/2015_, dated 08.06.2015 Per Mr. S.K. Mohanty :
In this case, taking of CENVAT credit by the appellant on the basis of challans certified by the Directorate of Revenue Intelligence (DRI) was objected by the Central Excise Department, on the ground that payment of differential amount of duty was made by the supplier upon detection of the fact of under-valuation of imported goods. Thus, according to the Department, since the amount was paid by reason of fraud, collusion, suppression of facts with the intention to evade payment of duty, CENVAT credit on the basis of challan is not admissible, in terms of Rule 9(1)(b) of the CENVAT Credit Rules, 2004. Show Cause Notice issued in this regard was adjudicated vide Order-in-Original dated 07.10.2012, wherein CENVAT credit of Rs.40,24,224/- was disallowed and equal amount of penalty was imposed by the adjudicating authority. In appeal, the Commissioner (Appeals) vide the impugned order dated 09.10.2013 upheld the adjudication order. Hence, the present appeal is before this Tribunal.
2. Ld. counsel for the appellant submits that the issue arising out of the present dispute has already been settled in favour of the appellant by the Settlement Commission vide Final Order dated 28.03.2011, holding that non-payment of differential duty on the part of the appellant was a bona fide mistake. He further submits that the CENVAT credit has been rightly availed by the appellant on the basis of valid duty paying documents in terms of provisions of Rule 9 of the CENVAT Credit Rules, 2004. To support his stand that CENVAT credit is admissible to the appellant on the strength of duty paid challans certified by the DRI officials, ld. Advocate has relied on the following decisions:-
(i) Commr. Vs. Silver Oak Laboratories Pvt. Ltd. [2014 (310) ELT 256 (All.)]
(ii) Silver Oak Laboratories Vs. CCE [2006 (201) ELT 261 (Tri.-Del)]
(iii) Bosch Chassis Systems India Ltd. Vs. CCE [2008 (232 ELT) 622 (Tri.-LB)]
(iv) Indian Oil Corporation Ltd. Vs. CCE [2011 (274) ELT 193 (Tri.-Mum.)]
(v) Indian Oil Corporation Ltd. Vs. CCE [2013 (298) ELT 556 (Tri.-Kol.)]
3. On the other hand, ld. Departmental Representative submits that since non-payment of duty at the time of importation was due to suppression of facts, as per the investigation by the DRI officials, the embargo created in Rule 9(1)(b) of CENVAT Credit Rules, 2004 is applicable and consequently, the appellant is not entitled to avail the CENVAT credit based on the certified copies of challans.
4. Heard both parties and perused the records.
5. In the present case, the appellant had availed CENVAT credit on the basis of the challans dated 19.10.2009 and 22.10.2009, certified by the DRI officials. The CENVAT credit so availed has been denied by the authorities below on the ground that the non-levy or short levy of duty was occasioned by fraud, collision, wilful mis-statement, which falls under the restricted provisions of Rule 9(1)(b) of CENVAT Credit Rules, 2004. Thus, according to the lower authorities, the embargo created in Rule 9(1)(b) of the Rules is applicable, which restricts availment of CENVAT credit, on the strength of the supplementary invoices.
6. I find that the issue involved in the present case has already been resolved by the Settlement Commission vide Final Order No.F.938/CUS/11/SC(PB), dated 28.03.2011. In the said order, the Settlement Commission has not given any finding that the short-levy or non-levy of the duty was the result of any fraud, collision, wilful mis-statement, etc. The relevant paragraphs in the said order is extracted herein below:-
16. .. The ld. Advocate briefly narrated the facts of the case and submitted that .. the mistake occurred and change of practice of assessment at Chennai was not brought to the notice of the dealing staff at Delhi and Malanpur. However, the applicant immediately paid the differential duty when the mistake was pointed by the DRI. Hence under these circumstances, this mistake was bona fide as the applicant had no mala fide intentions to evade customs duty as alleged in the Show Cause Notice..
17. The Bench has carefully considered the material available on record and submissions made by the Ld. Advocate of the Applicant and representative of the Revenue at the time of hearing. The Bench observes that the Applicant has made true and full disclosure of their additional duty liability and has fully cooperated in the proceedings before the Commission. They have also discharged their additional duty and admitted interest liability even before the issue of Show Cause Notice.
7. From the above order passed by the Settlement Commission, it is established that short payment of duty was due to bona fide mistake, for which the charges of suppression, wilful mis-statement, fraud, etc. cannot be levelled against the appellant. Since the Show Cause Notice dated 19.09.2011 was challenged by the appellant before the settlement Commission, the said Notice cannot be adjudicated by the officers below, and as there is no adjudication order for the said notice, the question of framing charges of fraud, suppression of facts, etc. does not arise. Thus, in my view, the embargo created in Rule 9(1)(b) of the Rules does not apply to the facts of the case, disentitling the appellant to avail CENVAT credit.
8. The case of the appellant is squarely covered by the decision of the Larger Bench of the Tribunal in the case of Bosch Chassis Systems India Ltd. Vs. CCE (supra), the relevant para in the said decision is extracted below:-
11. If the law? permits the applicant to explain the non-discharge of his full duty liability, it may be difficult to hold that the payment of additional differential duty suo motu on receipt of the show cause notice would per se amount to acceptance of the allegations that non-payment or short-payment etc. was the result of any fraud, collusion or suppression of facts etc. We hasten to clarify that this observation should not be understood to suggest that irrespective of the nature of the allegation and the attending facts and circumstances, no adverse conclusion can be drawn. We simply wish to emphasis that the non/short payment of duty could be bona fide and there may be good reasons for the assessee to opt for settlement and not contest the show cause notice. Taking recourse to the Settlement Scheme and the payment of additional/differential duty on receipt of the show cause notice , therefore, per se may not necessarily treated as admission of guilt. The admission, if any, may be found in pleadings of the applicant, that is to say the manner in which he seeks to explain the occurrence of the liability. In Sir Shadi Lal Sugar and General Mills Ltd. v. C.I.T. (supra), a similar argument as one made on behalf of the Revenue in the present case was rejected in these words :
16.............. We find that the assessee admitted that?these were the income of the assessee but that was not an admission that there was deliberate concealment. From agreeing to additions, it does not follow that the amount agreed to be added was concealed. There may be hundred and one reasons for such admissions, i.e. when the assessee realizes the true position it does not dispute certain disallowances but that does not absolve the revenue to prove the mens rea of quasi criminal offence................... If the plea of the Revenue is accepted, it will render the entire exercise before the Settlement Commission nugatory and the provisions of Section 32E (1) [manner in which such liability has been derived] redundant."
9. On perusal of Rule 9(1)(b) of the Rules, it is revealed that the bar/restriction provided therein operates only when the goods sold by the manufacturer or the importer and an invoice in terms of the provisions of Central Excise Rules, 2002 has been issued. However, the restriction contained therein is not applicable to a case where the imported goods are not sold, but has been consumed captively by the importer himself, in the manufacture of final products in his factory, and no invoice in terms of Central Excise Rule has been issued. In the present case, since the appellant himself paid the differential duty into the Govt. exchequer and availed the CENVAT credit on the strength of the challans duly certified by the DRI officials, the restriction provided in Rule 9(1)(b) is not applicable and the appellant is eligible to avail the CENVAT credit.
10. In view of the foregoing, I do not find any merits in the impugned order, and thus, the same is set aside and the appeal is allowed in favour of the appellant.
[Operative portion pronounced in the open court] (S.K. Mohanty) Member (Judicial) SSK -8-