Commissioner Of Central Excise vs M/S Banian & Berry Bearings Pvt Ltd

[ Arising out of OIO-47/COMMR/2006 dtd 29.12.2006 Passed by Commissioner of Central Excise-AHMEDABAD-II ]

Commissioner of Central Excise-

AHMEDABAD-II - Appellant(s)

Vs

1. M/s Banian & Berry Bearings Pvt Ltd 2. Shri Arun Gisalal Verma - Respondent (s)

Represented by :

For Assessee : Shri Hardik Mode, Advocate Shri Iswarbhai B Patel , Director For Revenue : Shri J Nagori, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

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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 should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

Date of Hearing / Decision : 2/7/2015

ORDER No. A/11006-11007/2015 dtd 2/7/2015

Per : Mr.P.K. Das,

Revenue filed these appeals against Adjudication Order where a portion of demand of the cenvat credit was dropped.

2. After hearing both the sides and on perusal of records, we find that the Respondent No 1 M/s Banian & Berry Bearing Pvt Ltd was engaged in the manufacture of SS Ingots, SS Flats, an SS Round Bars classifiable under Chapter 72 of the Schedule to the Central Excise Tariff Act 1985. They were availing cenvat credit on imported Nickel for use in the manufacture of final product. A Show Cause Notice dtd 30th Sept 2005 was issued proposing demand of cenvat credit of Rs 2.09 crores alongwith interest and to impose penalty on the Respondent No 1 and its Director, Respondent No 2 herein.

3. By the impugned adjudication order, the adjudicating authority disallowed the cenvat credit of Rs 1.30 cores alongwith interest and also imposed a penalty on the Respondent No.1 and Rs 25 lacs on the Director, Respondent No 2 herein. The balance amount of demand as proposed in the show cause notice was dropped by the Adjudicating Authority. The respondents filed appeal No.E/654,673/2007 against the confirmation of demand of cenvat credit alongwith interest and penalties before the Tribunal. Revenue filed the instant appeals against the impugned order to the extent of the demand of balance portion of the cenvat credit dropped and to increase the amount of penalty on both the respondents.

4. We find that the Tribunal vide FO NO A/171-181/WZB/AHD/2008 dtd 6.2.2008 allowed the appeals filed by the respondents. The Revenue challenged the order of the Tribunal before the Honble Gujarat High Court. By judgment dated 15.9.2009 in Tax Appeal No. 1123/2005 (Commissioner of Central Excise, Ahmedabad II vs Arun Verma, Director and Banian & Berry Bearings Pvt Ltd). The Honble Gujarat High Court dismissed the appeal field by the Revenue.

5. The Learned Authorised Representative on behalf of the Revenue reiterates the grounds of appeal. He submits that the evidences in respect of the LR were not appreciated by the Adjudicating Authority. It is also contended that the vehicle number mentioned in the document, are not capable to carry huge quantity of goods, which is confirmed by the Transport Manger in his statement. He submits that the Tribunal had not considered these facts in the Final Order dtd 6.2.2008. He relied upon the decision of Honble High Court of Punjab and Haryana in the case of Rajeev Alloys Ltd vs CCE, Chandigarh [2009(247).ELT.27(P&H)]. He also relied upon the decision of this Bench in the case M/s Agarwal Metals & Alloys & others vs CCE, Vapi [ 2013(2)ECS. 37.(Tri. Ahmd)].

6. We find that the adjudicating authority disallowed the credits of Rs 1.30 crores on the ground that the appellant availed the credits on the basis of invoice without receipt of the goods. The Tribunal in the respondents own case dropped the demand which was upheld by Honble High Court. The relevant portion of the decision in the case of Shri Arun Verma (Supra) are as under:

 6. We have carefully considered the submissions.

7.1 The main issue to be decided is whether, on the basis of available evidence, it can be concluded that the imported goods viz., Nickel have been diverted and consequently the credit availed should be denied and import duty should be demanded on the diverted materials. Commissioner has in his order dt 27.10.2006 came to the conclusion that there is no evidence for such diversion. However, he has in his subsequent order dt 29.12.2006 came to an opposite conclusion that the materials have been diverted and therefore they were not eligible to take the cenvat credit. He has no doubt relied upon certain additional evidence in the form, of statements to come to a different conclusion in his order dt 29/122/2006.

7.2 Even after the addition evidence relied upon by the Commissioner to pass his second order, there is reliable evidence to come to a conclusion that the material has been diverted. The assessee was registered with the jurisdictional Asstt. Commissioner for the propose of receiving goods imported duty free; followed the other formalities like filing of D 3 declarations. The Asstt. Commissioner has issued end use certificates before and after commencement o investigation. No reliable evidence of actual diversion of the imported goods has been noticed. Many discrepancies which throw suspicion have been noticed. However, the same have not been followed upon for further investigation. The evidence of Mr Chander Pal Singh is relied upon to come to a conclusion that the records have been manipulated. However, the evidence of the Production Manager on whose instructions Mr Chander Pal Singh has reportedly maintained manipulated records has not been taken. Similarly, statements of persons concerned with transportation have not been corroborated.

7.3 The manufacture of substantial quantity of 304 grade finished product and its clearance are not being disrupted. The 304 grade scrap imported is only to the tune of about 142 MTs. Therefore, use of Nickel for manufacture of the balance quantity of 304 grade as reflected in the private and statutory records maintained by the assessee-company cannot be brushed aside.

7.4 No valid reasons have been adduced by the Department to disregard the utilization certificate issued by the jurisdictional Asstt. Commissioner according to which, the imported materials have been utilized in the manufacturing by the assessee-company. The jurisdictional Asstt. Commissioner has issued such certificates even after the day of search by the officers.

7.5 Therefore, the decision of the Commissioner in his first order dt 27/10/2006 is reasonable. The additional evidence in the form of some statements does not materially change the situation to reverse the above decision. Consequently, the decision of the commissioner in his order dtd 29/12/006 cannot be sustained.

7.6 In view of the above, we hold that there is no evidence to the findings that the imported materials have been diverted. Therefore, demand of duty on the raw materials as such is no sustainable. In as much as duty has been paid on the finished product, the question of disallowing the credit on the imported Nickel does not arise.

7. Hence, the submission of the Learned Authorised Representative in respect of the balance amount of the demand, which was dropped by the Adjudicating Authority has no merit. The Learned Authorised Representative for Revenue relied upon the decisions in different context. On the other hand the decision of the Tribunal against this impugned order should be accepted as upheld by the Honble High Court. We find that the Tribunal already considered all the issues in the Final Order dtd 6.2.2008 and therefore, there is no reason to interfere the Adjudication Order. The appeals filed by the Revenue cannot be sustained. Accordingly, both the appeals filed by the Revenue are rejected.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

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