Custom, Excise & Service Tax Tribunal
M/S.Techma Engineering Enterprise vs Commissioner Of Central Excise, ... on 25 July, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.EA-687/12
(Arising out of Order-in-Appeal No.90/KOL-II/2012 dated 27.09.2012 passed by the Commissioner of Central Excise(Appeals), Kolkata-III.)
FOR APPROVAL AND SIGNATURE
HONBLE SHRI H.K.THAKUR, 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 should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s.Techma Engineering Enterprise
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Kolkata-II
Respondent (s)
Appearance:
Shri M.K.Guha Neogy, Consultant for the Appellant (s) Shri K.Choudhury, Supdt.(AR) for the Revenue CORAM:
Honble Shri H.K.Thakur, Member(Technical) Date of Hearing/Decision :- 25.07.2016 Date of Pronouncement :- 25.07.2016 ORDER NO.FO/A/75669/2016 Per Shri H.K.Thakur.
This Appeal has been filed by the Appellant against Order-in-Appeal No.90/KOL-II/2012 dated 27.09.2012 passed by the Commissioner of Central Excise(Appeals), Kolkata-III as First Appellate Authority.
2. Shri M.K.Guha Neogy (Consultant) appearing on behalf of the Appellant argued that certain shortages in different types of inputs and scrap were detected by the Officers of Central Excise. That Shri Samir Paul, Authorized Representative of the Appellant admitted the shortages as per his statement dated 26.03.2003. That the amount of Rs.1,30,024/-(Rupees One Lakh Thirty Thousand and Twenty Four only) with respect to shortages of 111.320 MT of inputs was paid by the Appellant. It is the case of the Appellant that stock-taking of the inputs and the finished goods were not properly taken, therefore, demands decided against the Appellant are required to be set aside.
3. It is also the case of the Appellant that the inputs were not cleared as such, but were cleared for job-work as waste and scrap and duty was paid on the transaction value. That no penalty in this case is attracted as the goods were cleared under job-work challans.
4. Shri K.Choudhary, Supdt.(AR) appearing on behalf of the Revenue made the Bench go through para 8a and 8c of the show cause notice to argue that job-work challan Nos.71-78 were issued by the Appellant to create paper, but in reality the goods were never sent to M/s.Rima Gases (P) Ltd. for job-work. It is the case of the ld.AR that there was a deliberate attempt to clandestinely clear inputs without reversal of Cenvat Credit. It is also the case of the ld.AR that no processes were done on the inputs which were cleared as such and equivalent credit taken with respect to these inputs was required to be reversed instead of payment of duty as waste and scrap on transaction value.
5. Heard both sides and perused the case records. The issues involved in these proceedings are as follows:-
(a) Whether Appellant has correctly paid duty on shortages detected by the Officers of Central Excise in a joint stock verification?
(b) Whether Cenvat Credit is required to be reversed with respect to total credit taken on the inputs or at the time of receipt the same is required to be discharged at the transaction value?
(c) Whether the penalties are imposable upon the Appellant?
6. So far as detection of shortages of inputs and finished goods are concerned, the same were detected in a joint verification done by the Appellant and the departmental officers. The same was also admitted by the Authorized Representative of the Appellant. Subsequently taking a stand that stock verification was not done properly can only be considered as an after-thought and is rejected. Appellant has therefore, correctly paid duty with respect to shortages found and are correctly liable to penalty.
7. So far as reversal of Cenvat Credit on goods cleared as such is concerned, the Appellant is of the view that inputs were in the form of rods and after receipt some of the inputs were found to be defective. It is also the case of the Appellant that these inputs were sold as scrap and cannot be considered as removal of inputs as such. To a specific query from the Bench whether any processes were carried on the inputs before selling them as waste and scrap, ld.Consultant appearing for the Appellant could not bring any evidence on record to suggest that any process was done on the inputs before the same were sold. Under Cenvat Credit Rules, 2004 when inputs are cleared as such then an amount equivalent to Cenvat Credit taken is required to be reversed. The argument of the Appellant that inputs on receipt were found defective and were cleared as waste and scrap is not tenable because even if the defective inputs are sold as scrap then also the actual Cenvat Crdit taken at the time of receipt of these inputs was required to be reversed. It is also observed from the case records that challans were prepared only to create paper whereas Shri P.K.Maity, Accounts Manager of M/s.Rima Gases (P) Ltd. clearly stated in his statement dated 06.12.2005 that they never received any scrap from the Appellant for job-work, but these consignments were purchased from the Appellant. In view of the above the conduct of the Appellant is mischievous and penalty has been correctly imposed by the Adjudicating Authority and upheld by the First Appellate Authority.
8. In view of the above observation, Appeal filed by the Appellant is dismissed and order passed by the First Appellate Authority is upheld.
(Operative part of the order was pronounced in the open court.)
SD/
(H.K.THAKUR) MEMBER(TECHNICAL)
sm
4
Appeal No.EA-687/12