M/S Apollo Metalex Pvt. Ltd vs Cce & St, Noida

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 authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

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

Excise Appeal No.E/51893/2014 and E/58186/2013

& Excise Misc. 50514/2015

[Arising out of Order-in-Original No. 34-35/Comm/NOIDA/2013-14 dated 31.12.2013 passed by the Commissioner of Central Excise, Noida).

M/s Apollo Metalex Pvt. Ltd. Appellant

Vs.

CCE & ST, Noida Respondent

Excise Appeal No.E/59299/2013 and E/51768/2014 &

Excise Misc. 50514/2015

[Arising out of Order-in-Original No.04/COMM/NOIDA/2013-14 dated 10.05.2013 passed by the Commissioner of Central Excise, Noida)

M/s.RRB Chemicals Pvt. Ltd. Appellant

Vs.

CCE & ST, Noida Respondent

Appearance:

Rep. by Shri Rajesh Chibber, Advocate for the appellant.

Rep. by Shri M.S. Negi, DR for the Respondent

CORAM : Hon'ble Mr. Rakesh Kumar, Member (Technical)

Honble Mr. S.K. Mohanty, Member (Judicial)

Final Orders Nos.51447-51450/2015 dated 9.4.2015

Per Rakesh Kumar:

The facts giving rise to filing of these appeals and miscellaneous applications are, in brief, as under:-

1.1 M/s.RRB Chemicals are manufacturers of Zinc Oxide. They availed cenvat credit in respect of the inputs received for the manufacture of Zinc Oxide. M/s. RRB Chemicals besides being manufacturer of zinc oxide are also a consignment agent in respect of zinc sheets for M/s. Asian Colour Coated Ispat Ltd. (hereinafter referred to as ACCIL). However, they did not have separate premises for trading and this activity was being done from the factory premises. Though M/s.RRB Chemicals have central excise registration as manufacturer of zinc oxide, they had not obtained registration as a registered dealer for sale of G.P. sheets under cenvatable invoices. M/s. Apollo Metalex Pvt. Ltd., Bulandshahar (U.P.) (AMPL) were purchasing G.P. sheets from M/s. RRB Chemicals who, in turn, were receiving the G.P. sheets from ACCIL. M/s. RRB Chemicals in respect of the consignments of G.P. sheets sold to them by ACCIL were availing the cenvat credit and were thereafter passing on this cenvat credit under the invoices issued by them to AMPL. Subsequently, on the departments objection M/s. RRB Chemicals obtained separate registration as a registered dealer. In respect of the period prior to obtaining separate registration as a registered dealer, the departments objection is that since they neither obtained the central excise registration as a registered dealer nor they have received the G.P. Sheets and as such, the consignment of G.P. Sheets sold by them were directly being supplied by ACCIL to AMPL. M/s.AMPL would not be eligible for cenvat credit on the basis of the invoices issued by M/s.RRB Chemicals. It is on this basis that the Commissioner vide order-in-original dated 34-35/Comm/NOIDA/2013-14 dated 31.12.2013 has confirmed the cenvat credit of Rs.2,49,93,425/- against M/s.AMPL along with interest and while penalty of same amount has been imposed on AMPL, penalty of same amount has also been imposed on M/s.R.R.B.Chemicals. Against this order of the Commissioner, appeal no.E/58186/2014 has been filed by M/s. AMPL and Appeal No.E/51893/2014 has been filed by M/s.RRB Chemicals. Misc. application no.E/Misc./50514/2015 has been filed by M/sRRB Chemicals for extension of stay.

1.2. In respect of the period after obtaining separate registration as registered dealer by RRB Chemicals, the Department was of the view that still their customers, M/s.AMPL would not be eligible for cenvat credit, as though M/s. RRB Chemicals were issuing invoices for G.P. Sheets to M/s.AMPL as registered dealer, the goods were not being received in the premises of RRB Chemicals. It is on this basis that the Commissioner vide order-in-original dated 10.05.2013 has confirmed the cenvat credit demand of Rs.2,29,13,482/- against M/s. AMPL along with interest and besides this, while equal amount of penalty was imposed on M/s.AMPL, penalty of Rs.4 Lakh was imposed on M/s.RRB Chemicals. Against this order of the Commissioner, Appeal No.E/59299/2013-EX(DB) has been filed by M/s. RRB Chemicals and Appeal No.E/51768/2014-EX(DB) has been filed by M/s. Apollo Metalex Pvt. Ltd. The misc. application No.E/Misc/50515/2015 has been filed by RRB Chemicals for extension of stay.

3. Heard both the sides.

4. Shri Rajesh Chibber, Advocate,ld. Counsel for the appellants, pleaded that during the entire period of dispute, whether during the period prior to obtaining separate registration as a registered dealer by M/s. RRB Chemicals or during the period subsequent to obtaining of separate registration as a registered dealer by RRB Chemicals, it has not been denied that the goods covered under the invoices issued by RRB Chemicals to M/s.AMPL, had been received by AMPL and that just because the goods were supplied directly by ACCIL to M/s. AMPL under the invoices of M/s.RRB Chemicals, the cenvat credit cannot be denied to M/s. AMPL. He also pleaded that in the circumstances of the case, there was no justification for imposition of penalty on M/s. RRB Chemicals.

5. Shri M.S. Negi, ld.Departmental Representative defended the impugned order by reiterating the findings of the Commissioner. He pleaded that while Shri Rakesh Mishra, Managing Director of M/s. RRB Chemicals Pvt.Ltd. in his statement given to the Central Excise Officers had stated that the consignments of G.P. sheets received from M/s.ACCIL were being unloaded in their factory and from there the same were being dispatched to M/s.AMPL, it was found that there was no facility in the factory of M/s.RRB Chemicals for unloading and loading of the G.P. sheets and also the transporters through which the consignment of G.P. sheets are claimed to have been dispatched to M/s. AMPL were found to be fake. He, therefore, pleaded that there is no infirmity in the impugned order.

6. We have considered the submissions from both the sides and perused the records.

7. M/s.RRB Chemicals are manufacturers of zinc oxide and have central excise registration as a manufacturers and there is no dispute that from the same premises, they were also conducting their trading activities in G.P. Sheets. The G.P. sheets procured by RRB Chemicals from ACCIL were being supplied as a consignment agent to M/s. AMPL. Upto certain point of time, M/s.RRB Chemicals had not obtained separate central excise registration as a registered dealer and during this period, M/s.RRB Chemicals were availing cenvat credit in their RG 23 A Account in respect of the G.P. sheets and they were also clearing the G.P Sheets as such under the invoices issued to M/s.AMPL on reversal of the credit, to M/s.AMPL and on the basis of such invoices, M/s. AMPL were availing cenvat credit. In respect of this practice, the Departments objection is that the investigation revealed that G.P. sheets were not being unloaded in the factory of M/s.RRB Chemicals and there is no evidence that G.P. sheets were dispatched from the factory to the Apollo Metalex. It is not the departments case that AMPL did not receive the G.P. sheets which were covered by the invoices of M/s.RRB Chemicals as consignment agent. In these circumstances, it would not be correct to deny the cenvat credit to M/s.AMPL and impose penalty on them as well as on M/s.RRB Chemicals. In view of this, we hold that the order-in-original no.34-35/2013 dated 31.12.2013 denying the cenvat credit to M/s.AMPL and imposing penalty on them as well as M/s.RRB Chemicals is not sustainable and the same has to be set aside.

8. In respect of the period w.e.f. the date on which M/s.RRB Chemicals obtained registration as registered dealer, the only objection of the Department is that M/s.RRB Chemicals were issuing invoices regarding sale of the G.P. sheets to M/s.AMPL without actually unloading of the goods in their premises and were actually dispatching the goods to M/s.AMPL. In this case also, it is not the case of the Department that M/s. AMPL did not receive the consignments of G.P. sheets covered under the invoices issued by RRB Chemicals. Rather it is the Departments case that M/s.AMPL were receiving the consignments of G.P. sheets directly from ACCIL under the invoices of the RRB Chemicals. When the receipt of the goods by AMPL which are covered under the invoices issued by RRB Chemicals is not denied, it would not be correct to deny the cenvat credit to M/s. AMPL and impose penalty on them as well as on M/s.RRB Chemicals. In view of this, the second order no.04/COMM/NOIDA/2013-14 dated 10.05.2013 passed by the Commissioner is also not sustainable and has to be set aside.

9. In view of the above discussion, both the orders-in-original passed by the Commissioner are set aside and the appeals are allowed. The registration of RRB Chemicals as a registered dealer, which has been cancelled by the Commissioner by his order dated 31.12.2013 may also be restored.

( Rakesh Kumar )

Member (Technical)

( S.K. Mohanty )

Member (Judicial)

Ckp.

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