- (1.) THIS central excise appeal under Section 35G of the Central Excise Act, 1944 (in short the Act) arises out of the final order dated 9.3.2004 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (CESTAT, New Delhi) partly allowing the appeal, confirming the decision of the Commissioner (Appeals) in respect of CENVAT Credit of Rs. 51, 811/ - as well as penalty of Rs. 50, 000/ -, and has set aside the order in relation to the CENVAT Credits of Rs. 46, 600/ - and Rs. 30, 05, 054/ - modifying the orders of Commissioner (Appeals) accordingly. By the same order the appeal filed by the revenue was allowed for the credit of Rs. 30, 05, 054/ -. The appeal was admitted on 7.5.2013 on questions Nos. 1, 2, 3 and 5 in the memo of appeal, which were found to be sufficient to cover the entire controversy: 1. Whether the duty having been admittedly paid on the inputs stored outside the factory premises, which was received in the factory after 1.3.2001, the tribunal was not justified in not considering Rule 57(A)(B)(1) for the purposes of CENVAT credit of Rs. 30, 05, 054.00.
(2.) WHETHER the principle of law i.e., the applicability of Rule 57(A)(B)(1) being absolutely the same as for Rs. 46, 600.00 and also for Rs. 30, 05, 054.00. The tribunal was not justified in taking conflicting view in the same order merely because the application for permission was filed by the appellant. Whether the tribunal was not justified in holding that prior permission of the Commissioner is required for storing the inputs outside the factory premises when the circular dated 1.5.1996 does not put such condition. 5. Whether the very same Deputy Commissioner after keeping the Application with him for over 1 year, returning the same on 19.3.2002, was justified in issuing a Show -cause Notice dated 8.4.2002 denying the credit only on the procedural ground of lack of permission from the Commissioner without on merits holding that the appellants are in any way disentitled to the credit? That there is no allegation that the inputs have not been used in the manufacture of final products or directed to third parties. 2. We have heard Shri Bharat Ji Agrawal, Sr. Advocate assisted by Shri Piyush Agarwal and Shri Aditya Bhattacharya for the appellants. Shri Siddartha Shukla appears for the revenue. 3. Brief facts giving rise to this appeal are that M/s. Securipax India Private Limited -the appellant is engaged in the manufacture of excisable goods falling under Chapter 48 of the Central Excise Tariff Schedule for which the company obtained registration on 20.3.2001. The company is availing CENVAT Credit facility in respect of the inputs since 30.3.2001. The appellant had taken CENVAT Credit of Rs. 46, 600/ - in respect of inputs, which were not found available and stored in the registered factory premises. Another credit of Rs. 51, 811/ - was taken on inputs on 19.3.2001, prior to the date of Central Excise registration. The company had also taken CENVAT Credit of Rs. 30, 05, 054/ - during the period March, 2001 to February 2002 in respect of inputs, which at the material time were stored outside the factory premises without prior permission of the jurisdictional Commissioner of Central Excise. The Deputy Commissioner, Central Excise, Noida disallowed these credits and imposed penalty of Rs. 31 lacs on the company. The Commissioner (Appeals) upheld the decision of the original authority in respect of Cenvat Credits of Rs. 46, 600/ - and Rs. 51, 811/ - but allowed the credit of Rs. 30, 05, 054/ -. It also reduced the quantum of penalty to Rs. 50, 000/ -. In appeal the appellant challenged the denial of Cenvat credit of Rs. 46, 600/ - and Rs. 51, 811/ - as also imposition of penalty. The revenue also filed an appeal challenging the decision of lower appellate authority in respect of MODVAT Credit of Rs. 30, 05, 054/ - and the deduction of penalty.
(3.) THE CESTAT found that the CENVAT Credit of Rs. 46, 600/ - was taken on the inputs in March, 2001 and was utilised in April, 2001. The credit was denied on the ground that inputs were not found lying in the registered factory premise. They were lying elsewhere. The inputs were duty paid and had been used in the manufacture of final product. The CESTAT found that Rule 57AB(1) relied on by the Commissioner (Appeals) provides that the inputs should have been received in the factory after 1.3.2001. There was no allegation that the inputs in question were not so received in the factory nor it was alleged that the inputs were not duty paid and not used in manufacture. The CENVAT Credit was thus found to be disallowed without any justification.;