M/S. Bhagya Alloys vs Commissioner, Central Excise, ...

[Arising out of Order-in- Appeal No. PIII/RP/83-84/2013 dtd. 25/3/2013 passed by the Commissioner(Appeals), Central Excise & Customs, Pune-III]

For approval and signature:

Honble Mr Ramesh Nair, Member(Judicial)

======================================================= 1. Whether Press Reporters may be allowed to see : No 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 : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. Bhagya Alloys Mr. Kashinath A. Pande : Appellants

VS

Commissioner, Central Excise, Pune-III : Respondent

Appearance

Shri. M.S. Joshi, Advocate for the Appellants Shri. Ashutosh Nath, Asst. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 16/4/2015 Date of decision /2015

ORDER NO.

Per : Ramesh Nair

The appeal is directed against order-in-appeal No. P/III/RP/83&84/2012 DATED 24/3/2013 passed by the Commissioner (Appeals) Pune-III, wherein the Commissioner (Appeals) passed the following order: ORDER

A. In respect of Appellant - 1 The Order-In-Original PUN-CEX-002-ADJ-ADDL-13-2011 dated 09.09.2011, passed by the Additional Commissioner, Central Excise, Pune  III Commissionerate is modified as under :

(a) Order regarding recovery of CENVAT credit of Rs. 8,81,669/- under Rule 14 of the CCR, read with proviso to Section 11A(1) of the Act is upheld.

(b) Order regarding confirmation of the demand of interest on the above amount, under Section 11AB of the Act read with Rule 14 of the Rules is upheld.

(c) Penalty of Rs. 8,81,669/- imposed under Section 11AC of the Act read with Rule 15(2) of the Rules is upheld.

(d) Redemption fines totaling Rs. 10,80,476/- are set aside.

B. In respect of Appellant - 2 The Order-In-Original PUN-CEX-002-ADJ-ADDL-13-2011 dated 09.09.2011, passed by the Additional Commissioner, Central Excise, Pune  III Commissionerate is upheld as legal and proper.

C. Both the Appeals are disposed off accordingly.

The fact of the case is that the appellant No. 1 M/s. Bhagya Alloys during a period March 2005 to April 2005 availed the Cenvat Credit against bill of entry however i.e. goods aluminum scrap covered under said bill of entry was diverted somewhere else and they neither received in the factory nor used in the production. Therefore a show cause notice dated 26/3/2010 was issued proposing denial of Cenvat credit, imposition of penalty and confiscation of goods. In the adjudication following order was passed.

In respect of Appellant  1:

(a) Recovery of CENVAT credit of Rs. 8,81,669/- under Rule 14 of the CENVAT Credit Rules, 2004 (hereinafter referred to as the Rules) read with proviso to Section 11A(1) of Central Excise Act, 1944 (hereinafter referred to as the Act).

(b) Confirmed the demand of interest on the above amount under Section 11AB of the Act read with Rule 14 of the Rules.

(c) Imposed penalty of Rs. 8,81,669/- under Section 11AC of the Act read with Rule 15(2) of the Rules.

(d) Imposed fine of Rs. 5,40,238/- under Rule 15(1) of the Rules in lieu of confiscation of inputs valued at Rs. 54,02,380/- under Section 34 of the Act.

(e) Imposed fine of Rs. 5,40,238/- under Rule 25 of the Rules in lieu of confiscation of manufactured finished goods valued at Rs. 54,02,380/- under Section 34 of the Act.

In respect of Appellant  2:

* Imposed penalty of Rs. 50,000/- on M/s Llakshya Container Carriers and Rs. 50,000/- on Kashinath Ajabnarayan Pande, partner of M/s Llakshya Container Carriers under Rule 26 of the Rules.

Aggrieved by the said order the appellant filed appeal before the Commissioner(Appeals), who dismissed the appeal for non-compliance of the order of pre-deposit in terms of Section 35F of the Act. In appeal before the Honble CESTAT vide order No. S/183&184 /12/SMB/ C-IV and A/104& 105/12/CSMB/C-IV both dated 7/5/2012 remanded the matter to the Commissioner(Appeals). The Ld. Commissioner(Appeals) in the second round confirmed demand, demanded interest under Section 11AB, imposed penalty of equivalent amount under Section 11 AC, however redemption fine was set aside. In respect of appellant No. 2 order was upheld, aggrieved by the said order the appellant are before me.

2. Shri. M.S. Joshi, Ld. Counsel for the appellant mainly submits on the ground of limitation that in the show cause notice the demand is pertaining to March 2005 to April 2005 and show cause notice though dated 26/3/2010 but was received by the appellant on 17/5/2010 thus demand is beyond the maximum period of five years and there is no provision in law to issue show cause notice for the demand pertaining to the period beyond five years. He submits that entire demand liable to be quashed only on the threshold point of the limitation without going into merit of the case. He submits that as regard the service of show cause notice DGCEI intimated to the Ld. Commissioner that the show cause notice was sent by speed post on 26/3/2010 outward no. 1688 however no evidence was produced regarding delivery date of the show cause notice therefore show cause notice is time bar.

3. On the other hand, Shri Ashutosh Nath, Asst. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as per the services of the show cause notice the DGCEI submitted report to the adjudicating authority wherein it was informed that the show cause notice was issued on 26/3/2010 accordingly nothing more is required and with this fact show cause notice was issued well within the prescribed time limit of five years therefore demand is not time bar.

4. I have carefully considered the submissions made by both the sides and perused record.

5. I find that primary issue to be decided is that the date of service of show cause notice. From the findings of the Ld. Commissioner(Appeals) it was observed that DGCEIs, Addl. Director General vide letter dated 1/1/2013 informed the actual date of receipt of show cause notice by the two appellants however in respect of show cause notice issued to the M/s. Bhagya alloys it was informed by the Addl Director, DGCEI vide letter dated 19/3/2013 that the show cause notice was issued on 26/3/2010 with outward no. 1688. It was also informed that show cause notice was under speed post dated 11/4/2010 however there is no proof available regarding the date of delivery of the show cause notice. In view of this position, in my considered view it is desirable that adjudicating authority should once again verify the fact of the dispatch of show cause notice and delivery thereof to appellant M/s. Bhagya Alloys with this observation I remand the matter to the adjudicating authority to establish fact of date of dispatch and delivery of show cause notice thereafter the adjudicating authority shall pass a fresh order. All the issues are kept open. Needless to say that the appellants should be given sufficient opportunity of personal hearing before denovo adjudication in the matter. Appellants should also co-operate in speedy denovo adjudication. Adjudicating authority is directed to complete the denovo adjudication proceedings within a period of three months from the date of receipt of this order. Since appeal of the M/s. Bhagya Alloys is remanded, other appeal of the co-appellant, Mr. Kashinath A. Pande also stand remanded.

(Order pronounced in court on_____________)

Ramesh Nair Member (Judicial)

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