M/S. Venkatesh Cones Pvt. Ltd vs C.C.E. & S.T. Jaipur

[Arising out of Order-in-Original No. 158-160(DK)/CE/JPR-I/2010 dated 15.03.2010 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Jaipur].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

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?

M/s. Venkatesh Cones Pvt. Ltd. .Appellants

Vs.

C.C.E. & S.T. Jaipur .Respondent

Appearance:

Shri Rupinder Singh, Advocate for the Appellants

Shri G.R. Singh, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 09.04.2015

FINAL ORDER NO. 51421/2015-EX(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order denying Cenvat Credit. Consequently demanding duty along with interest and imposing penalty.

2. The facts of the case are that appellant is engaged in manufacturing of paper cones. Generally to manufacture of paper cones, the craft paper is the raw material but during the period December 2000 to January 2002 the appellant procured certain quantity of art paper for manufacturing of paper cone. An investigation was conducted at the premise of the appellant on 19.03.2002 wherein no variation of stock or other documents was found but it was observed that to manufacture paper cone the appellant has also procured art paper which is not the input for appellant. Therefore, it was presumed that art paper has not been procured by the appellant only invoices have been procured. Therefore, Cenvat Credit was sought to be denied and art paper used by the appellant for manufacturing paper cone. In these set of facts a show cause notice was issued on 31.09.2004 by invoking extended period of limitation to deny Cenvat Credit on art paper. Show cause notice was adjudicated. Cenvat Credit was denied. Demand on duty was confirmed along with interest and penalty was also imposed. On appeal before the ld. Commissioner (A) the adjudication was set aside. Against the said order Revenue filed the appeal before this Tribunal and this Tribunal vide order dated 23.12.2008 remanded matter back to ascertain the following facts:

a) To ascertain and come to the conclusion that art paper was used in manufacturing process.

b) Art paper was essential input and such input has seen in the light of the day by appropriate evidence shown in existence

c) Used in manufacturing process from place of origin to destination by chain of evidence on record.

3. With these observations, matter was remanded back to Ld. Commissioner (A). In remand proceedings the Ld. Commissioner (A) instead of following the Tribunals remand order, he framed the following issue:

a) They have taken the unutilized Cenvat Credit on art paper without bringing or purchasing the same.

b) They have taken Cenvat Credit on goods which is not admissible to them.

c) They have removed finished goods clandestinely.

4. The Ld. Commissioner (A) observed that the transactions are doubtful in nature. Therefore, Cenvat Credit was denied. Consequent to that appellant is before me.

5. The Ld. Counsel for the appellant submits that the appellant is using art paper / craft paper for manufacturing of paper cones. Process of manufacturing of art paper / craft paper is same. For better quality of yarn, art paper cone is required and for rough quality of yarn the craft paper is used.

6. He further submits that the department has not verified from the supply of art paper. Moreover, they have not verified from the buyers of art paper cone and also Ld. Commissioner (A) has observed that transaction is doubtful. If anything is doubtful benefit of doubt goes to the appellant. Therefore, the impugned order is set aside.

7. On the other hand Ld. AR reiterated the impugned order.

8. Heard the parties. Considered the submission.

9. In remand proceedings the issues which were framed by this Tribunal have not been examined at all. Moreover, no effort has been done at the end of supplier of the art paper and no effort has been done at the end of the buyer of the art paper cone and also from the transporter. If this exercise would have been done by the department, the truth would have come out. In the absence of any exercise done by the department the Ld. Commissioner (A) has rightly held that transactions is doubtful and when transaction is doubtful benefit of doubt goes in favour of the assessee.

10. Therefore, I hold that Cenvat Credit in these circumstances cannot be denied to the appellant by invoking extended period of limitation. In these terms, impugned order is set aside. Appeal is allowed with consequential relief.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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E/1619/2010-EX(SM)