Karnataka High Court
M/S Akzo Nobel India Ltd., vs The Commissioner Of Central Excise on 4 July, 2018
Bench: Vineet Kothari, S.Sujatha
1/11
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JULY 2018
PRESENT
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
AND
THE HON'BLE Mrs.JUSTICE S.SUJATHA
CENTRAL EXCISE APPEAL No.68 OF 2016
Between:
M/s. Akzo Nobel India Ltd.,
(Formerly M/s. Akzo Nobel Coatings India Pvt. Ltd.),
No.62A. 62B, 43E,
Hoskote Industrial Area,
Bangalore District-562114.
Represented by Venkataraju V.,
Manager - Indirect Taxation.
...Appellant
(By Mr. Gururaj B.N., Advocate)
And:
The Commissioner of Central Excise
& Service Tax, LTU,
100Ft. Ring Road, JSS Towers,
Banashankari III Stage,
Bangalore-560085.
...Respondent
This Central Excise Appeal is filed under Section 35G
of the Central Excise Act, arising out of order dated
26.08.2016 passed in Final Order No.20664/2016. praying
to (a) set aside the impugned Final Order No.20664/2016,
Date of Judgment 04-07-2018 C.E.A.No.68/2016
M/s. Akzo Nobel India Ltd., Vs.
The Commissioner of Central Excise & Service Tax.
2/11
dated 26.08.2016 at Annexure-A and allow the appeal, in
the interest of justice.
This Central Excise Appeal coming on for admission
this day Dr. Vineet Kothari J. delivered the following:-
JUDGMENT
Mr. Gururaj B.N., Adv., for Appellant The assessee has filed this appeal under Section 35G of the Central Excise Act, 1944 aggrieved by the order passed by Customs, Excise and Service Tax Appellate Tribunal, Bengaluru, on 26.8.2016 upholding the order dated 28.9.2010 passed by the Commissioner (Appeals) in Appeal No.42/2010, in favour of Revenue.
2. The relevant extract of the order of Tribunal dated 26.8.2016 is quoted for ready reference : -
"6. The learned counsel for the appellant submitted that credit has been denied on the ground that the appellant has not been able to prove the return of the goods whereas this was not an issue alleged in the show cause notice and therefore, basis for denial of Cenvat Credit traverses beyond the scope of show-cause Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax.3/11
notice. He further submitted that due to the limitations imposed by ERP system, the appellant had to take credit on RBA invoices, which were relatable to the original Excise invoice. He further submitted that the appellant is entitled to take credit against the assessee's own duty paying documents as has been held in the following cases:
i) Jindal Photo Ltd. Vs. C.C.E. [2009 (247) E.L.T. 730 (Tri.-Ahmd.)]
ii) Hitesh Plastic Pvt. Ltd. Vs. CCE & C. [2009 (243) E.L.T.419 (Tri-Ahmd)]
iii) BAPL Industries Ltd. Vs. CCE [2006 (198) E.L.T.587 (Tri.-Chennai)] He further submitted that the extended period has wrongly been invoked in this case as there was no suppression of facts but the case of the appellant was made out on the basis of records audited by the Revenue. In support of this submission, he relied upon the following case laws:
i) CCE Vs. Chemphar Drugs & Liniments [1989 (40) E.L.T. 276 (S.C.)] Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax.4/11
ii) Pushpam Pharmaceuticals Vs.
CCE (1996 (78) E.L.T. 401 (S.C.)]
7. On the other hand learned
Commissioner (A.R.) reiterated the findings of the Commissioner (Appeals) and submitted that the impugned order is perfectly in accordance with law because the adjudicating authority, after remand by the CESTAT, has examined each and every document furnished by the appellant and after examination of the documents, allowed the credit of Rs.
2,68,075/- and disallowed the Cenvat credit of Rs.6,08,239/-. Further in the impugned order, the learned Commissioner (Appeals) in Para 24 has observed as under:
"24. I have gone through the adjudication order and find that the adjudicating authority at para 25 has discussed each and every invoice and consignment under which the goods has left the factory and claimed to have returned/ received back. After verification of lorry receipts furnished by the assessee which finally confirms the receipt of goods back to the Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax.5/11
factory the adjudicating authority has allowed the credit in respect of ten consignments. In respect of four consignments where there are no details for having received the returned goods into the factory, the adjudicating authority has decided that it is not possible to allow the cenvat credit in the absence of any evidence establishing the fact of receipt of returned goods to the factory. Even at the appellate stage, the appellant has not produced any additional documents/evidences to prove that the returned/ rejected goods have been received into the factory. In the absence of any corroborative evidences, it is not possible to allow the cenvat credit in respect of the said four consignments."
It is pertinent to note that wherever the appellant has been able to produce the documents correlating the return of the goods, he has been given benefit of the same and Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax. 6/11 wherever the appellant has not been able to produce any document to substantiate their claim of return of the goods to the assessee as ordered by the Tribunal and the Commissioner (Appeals) and based on copies of the RBA invoices, this could not be established or proved that the goods were actually received by the appellant. Further in my considered view, the extended period has rightly been invoked as the appellant has suppressed the facts from the department that he was availing credit on the RBA series of invoices. In view of the aforesaid facts, I am of the opinion that there is nothing wrong in the impugned order and I uphold the same and dismiss the appeal of the appellant."
3. All the three authorities below thus have disallowed the Cenvat Credit to the assessee who is a manufacturer and dealer of industrial paints on the ground that the assessee failed to prove the sales returns in question for which it raised RBA series of Invoices and could not relate these RBA invoices to the original duty paying documents known as IBA invoices.
Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax. 7/11
4. We called upon the learned counsel to explain these abbreviated forms for which the learned counsel for the assessee has produced before us today a memo explaining the terms as follows : -
"RBA - (Reversal sales invoices from Bangalore site AAP) IBA - (Inter-State sales from Bangalore site AAP"
Learned counsel has further explained before us that the word 'ERP' used in para 6 quoted above means 'Enterprise Resource Planning".
5. We express our concern at this juncture itself that these abbreviated forms were not explained by any of the authorities in the written submission by the assessee before all the authorities below until the present appeal was filed before the High Court and we called upon the learned counsel for the assessee to explain these terms which could explain the transactions in question with clarity in a little more detail.
Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax. 8/11
6. On the basis of the aforesaid documents and the order of the learned Tribunal, the sole contention raised by the learned counsel for the assessee before us is that the Commissioner (Appeals) and the Tribunal could not have returned the findings beyond the case as per allegations contained in the Show Cause Notice given to the assessee in the present case for disallowing the Cenvat Credit to him on the "Sales Returns" made in the period in question. He relied upon certain judgments in support of the said contention which are cited below for ready reference : -
1. Commissioner of Central Excise & Customs, Surat vs Sun Pharmaceuticals Industries Limited [2015 (326) ELT 3 9(SC)];
2. C.C.E., C. & S.T., Belgaum vs Swarnagiri Wire Insulations Private Limited [2014 (301) ELT 46 (Kar)];
3. Godrej Industries Limited vs Commissioner of Central Excise, Mumbai [2008 (229) ELT 484 (SC)] and
4. Commissioner of Central Excise, Nagpur vs Ballarpur Industries Limited [2007 (215) ELT 489 (SC)].
Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax. 9/11 The learned counsel submitted that the Tribunal has not given any finding though the said contention was raised before it vide para 6 quoted above.
7. Having heard the learned counsel for the assessee, we are of the clear opinion that there is no merit in the contention raised by the learned counsel for the assessee and no substantial question of law arises in the present case requiring our consideration in the present appeal under Section 35G of the Act. From the above quoted para of the order of the Tribunal which inter alia also quotes the order passed by the Commissioner (Appeals), it is clear that a part of the relief was given to the assessee for Cenvat Credit in respect of Ten consignments, because the assessee could relate the "Sales Returns" to the original sales invoices through the Lorry Receipts with respect to said Ten consignments but for the remaining four consignments, such Cenvat Credit could not be allowed for want of relevant corroborative evidence produced by the assessee.
Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax. 10/11
8. The Tribunal while upholding the order passed by the Commissioner (Appeals) has affirmed the said finding.
9. We are of the opinion that while the second Appellate Authority affirms the orders passed by the first and the lower Appellate Authority, it need not record its own detailed findings and the affirmation of the order passed by Commissioner (Appeals) does not render such findings of the Tribunal perverse on its own.
10. The learned Commissioner (Appeals) has clearly recorded finding that the partial relief to the extent of four consignments could not be given to the assessee for want of corroborative evidence. There is no question of these authorities going beyond the parameters of the Show Cause Notice. The Show Cause Notice given to the assessee in the present case was for disallowing the Cenvat Credit and therefore after having examined each and every transaction, if the Appellate Authorities who are the fact finding authorities under the Act have returned such findings of facts based on evidence, the same cannot Date of Judgment 04-07-2018 C.E.A.No.68/2016 M/s. Akzo Nobel India Ltd., Vs. The Commissioner of Central Excise & Service Tax. 11/11 be assailed on the ground that they have gone beyond the scope of the Show Cause Notice.
11. The judgments relied on by the learned counsel for the assessee are not applicable to the facts of the present case.
12. We are therefore of the opinion that no substantial question of law arise in the case requiring our further consideration in the appeal. The appeal of assessee is found to be devoid of merit and accordingly it is dismissed. No costs.
Sd/-
JUDGE Sd/-
JUDGE ckl List No.1, Sl.No.6