M/S. Sapna Coils Pvt. Ltd vs Cce Thane Ii

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II

APPEAL NO. E/89445/13  Mum

(Arising out of Order-in-Appeal No. 314/BPS/MUM/2013 dated 06.08.2013 passed by the Commissioner of Central Excise & Service Tax (Appeals), Mumbai IV.)

For approval and signature:

Shri. M.V. Ravindran, 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 : No 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. Sapna Coils Pvt. Ltd. : Appellant

Versus

CCE Thane II

Respondent

Appearance

Ms. Kiran Doiphode, Advocate for Appellants Shri N.N. Prabhudesai, Supdt (A.R.) for Respondents

CORAM:

Shri. M.V. Ravindran, Member (Judicial)

Date of Hearing : 01.04.2015 Date of Decision : 2015

ORDER NO.

Per : M.V. Ravindran This appeal is directed against Order-in-Appeal No. 314/BPS/MUM/2013 dated 06.08.2013.

2. Relevant facts that arise for consideration are that the appellant is manufacturer of excisable goods and are availing CENVAT Credit facility. During the scrutiny of the documents by the audit party, it revealed that appellant had wrongly availed CENVAT Credit of Rs.2,33,311/- on the quantity of imported raw material which has not been received by them in their factory but had been diverted to their Head Office. Show-cause notice dated 11.11.2009 was issued for demand of wrongly availed CENVAT Credit, interest thereof and seeking to impose penalty. The said show-cause notice was contested by the appellant. Adjudicating authority after following due process of law, confirmed the demand raised with interest and imposed penalty. Aggrieved by such an order, the appellant preferred an appeal before the first appellate authority who also concurred the views of the adjudicating authority and rejected the appeal.

3. Learned Counsel appearing on behalf of the appellant would draw my attention to the facts of the case and take me through the records. It is her submission that the goods which were imported by them were partly sent to their head office or sister concern. It is her submission that the goods were imported by Bill of Entry dated 22.10.2007 and on payment of duty, after the clearance was undertaken a part of the quantity were diverted to the sister concern. She would draw my attention to the Bill of Entry filed by the appellant and submit that the description of the goods imported were the same which were cleared to the sister concern. It is her submission that there cannot be demand of duty as on 30.10.2007 the appellant had prepared an invoice by debiting the amount of duty liability in their CENVAT Credit account which has nullified the demand raised by the department. It is her submission that the appellant had already paid back the amount to the department and the show-cause notice issued on 16.09.2009 received by them on 11.11.2009 is not required to be issued. She would also draw my attention to the submission of the officials of the appellant and submit that they had very clearly recorded that the goods were cleared to their own sister concern and there is no dispute as to part diversion of the goods to their own sister concern.

4. Learned D.R. on the other hand would draw my attention to the findings recorded by the first appellate authority. He would submit that the claim of the appellant as to part goods were cleared to their sister concern is not forth-coming from the records. It is his submission that the goods as mentioned in the Bill of Entry and on the documents for debiting the amount of CENVAT Credit attributable to such diverted goods do not match. He would also submit that the appellant was aware that the goods need to be taken to the factory and excess CENVAT Credit was wrongly availed. He would submit that the appellant has intentionally done so and if it would have not noticed by the audit party, it would have gone undetected.

5. I have considered the submissions made by at length by both the sides and perused the records.

6. The issue in this case is whether the appellant is required to be saddled with the duty liability of CENVAT Credit of an amount of Rs.2,33,311/-, interest thereof and equivalent amount of penalty on the appellant.

7. The undisputed facts are that the appellant imported Seamless copper tube ASTM B280 size 9.48 mm x 0 and paid the customs duty and CVD thereof. It is also undisputed that the part of quantity of 3597 Kg. was diverted to one of the sister concern M/s Sapna Engineering. The only issue disputed in this case is that whether the appellant having already reversed CENVAT Credit on the quantity of goods diverted to sister concern, again needs to be saddled with the same amount as ineligible CENVAT Credit.

8. On perusal of the records, I find that the appellant has recorded the receipt of the quantity of the goods imported by him as 7438.80 kgs of Seamless copper tube ASTM B280 size 9.48 mm x 0 in RG 23 Part-I records on 30.10.2007. It is also noticed that the appellant has debited the said RG 23 Part I record for a quantity of 3597 Kg. as per the invoice having been issued dated 30.10.2007. I notice that RG 23 Part-II Register the appellant had indicated availment of CENVAT Credit of CVD paid on imported consignment as also debited of an amount attributable as CVD credit on the quantity of goods cleared to their own sister concern. The said entry is also dated 30.10.2007. I find that the appellant has shown the receipt of total quantity of the goods imported by Bill of Entry and prepared an invoice indicating the clearance of the goods to their sister concern. I find both the lower authorities have disputed this position only on the basis of invoices raised by the transporter indicating the quantity of the goods diverted to the sister concern. In my considered view if the quantity which has been delivered to the sister unit does not match in the case in hand though invoices prepared by the appellant is showing more quantity means that appellant has paid more duty. The intention of the appellant is very clear inasmuch as he has reversed the amount of CENVAT Credit attributable to the inputs cleared to their sister by raising duty paying invoice is the only conclusion that can be reached. I find that appellant is saddled with the duty liability of CENVAT Credit when the appellant has not taken CENVAT Credit of the duty paid on quantity which has been cleared to the sister concern. The entire issue is raised an afooting that there is mis-matching of the description by the lower authorities. Both the lower authorities have overlooked the description in its correct perspective, as the invoices which has been raised by the appellant for clearing to their sister concern indicates that the dimension in inches while when the goods were imported and the Bill of Entry indicates the description in mm. On casual conversion of the dimensions in Bill of Entry and on the invoice I find that there is no difference.

9. In view of the foregoing, I am of the considered view that impugned order is incorrect and is liable to be set aside and I do so. Impugned order is set aside and the appeal is allowed.

(Order pronounced in Court on.)

(M.V. Ravindran) Member (Judicial)

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