KALPENA INDUSTRIES AND ORS. Vs. COMMISSIONER, CENTRAL EXCISE & SERVICE TAX
LAWS(CE)-2015-7-15
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on July 23,2015

Kalpena Industries And Ors. Appellant
VERSUS
Commissioner, Central Excise And Service Tax Respondents

JUDGEMENT

H.K.THAKUR - (1.)THESE appeals have been directed against OIO No. 18/MP/VAPI/2011, d. 25.08.2011 issued on 02.09.2011. Appeal No. E/1323/2011 has been filed by the main Appellant M/s. Kalpena Industries Ltd, Silvassa.
(2.)The other appeals are filed by Shri Narendra Surana, M.D., Shri Prakash Sahu, Assistant Manager -cum -Authorised Signatory and Shri Manoj Jain, Commercial Head & Company Secretary -cum -Authorised Signatory of the main Appellant with respect to penalties imposed upon them. Shri Rahul Gajera (Advocate) appearing on behalf of the Appellants submitted that the case is with respect to storage of duty paid inputs by the main Appellant in a godown situated away from the factory. That the officers of Central Excise visited the factory premises of the Appellant on 03.02.2010/04.02.2010 and conducted verification of the stock lying in the factory including stock lying in the nearby premises outside the declared godown. That 52,075.00 kgs. of various inputs, valued at Rs. 30,71,202.00 were found to have been stored in godown situated outside the factory without obtaining necessary permission from the jurisdictional Central Excise Assistant Commissioner/Deputy Commissioner under CENVAT Credit Rules and without reversal of CENVAT Credit originally taken on the inputs. That the same were seized by the officers and provisionally released to the Appellants on execution of Bank Guarantee of Rs. 7,67,800.00. That after detailed investigation, a show cause notice dt. 02.08.2010 was issued which was confirmed by the Adjudicating authority under Order -in -Original, dt. 25.08.2011. That Adjudicating authority has confiscated the inputs seized by the officers and a redemption fine of Rs. 6,67,800.00 was imposed which was recovered by enforcing the Bank Guarantee. That CENVAT Credit of Rs. 4,44,626.00 pertaining to the seized inputs was also confirmed, alongwith interest and equivalent penalty was also imposed upon the main Appellant.
2.1 Learned Advocate argued that before storage of inputs in the adjoining godown, a letter dt. 18.07.2007 was written by the main Appellant to the Assistant Commissioner, Silvassa regarding storage of inputs outside the factory and sought permission under Rule 8 of CENVAT Credit Rules 2004. That no response came from the Department and, therefore, they issued another reminder dt. 01.04.2008 to the Assistant Commissioner, Silvassa. That as no permission was granted by the Department, therefore, they went ahead and stored the goods in the godown situated outside the factory. That the entire inputs after provisional release were used in the manufacture of finished goods, therefore, no violation of CENVAT Credit Rules has been made by the Appellant and CENVAT Credit disallowed and penalties imposed are required to be set aside. He relied upon the case law of Sanchit Polymers Vs. CCE & C, Daman [2009 (241) ELT 240 (Tri -Ahmd)] to argue that under similar circumstances, it has been held that confiscation of inputs was not justified and penalties imposed were set aside.

(3.)SHRI L. Patra, (AR) appearing on behalf of the Revenue argued that it is not disputed by the Appellants that the inputs were cleared without getting necessary permission from the Department under Rule 8 of CENVAT Credit Rules 2004. He made the Bench go through Para 60 of the Order -in -Original, dt. 25.08.2011 and argued that no records were maintained by the Appellant at their godown situated outside the factory, whereas in their letter dt. 18.07.2007, main Appellant specifically mentioned that proper records will be maintained at the factory and at the place of storage outside their factory. It was also his case that no documents were prepared by the Appellant for movement of inputs from their factory to the temporary storage godown. It was also argued that in the original letter dt. 18.07.2007, no address of the storage place outside the factory was provided. That in the reminder dt. 01.04.2008, only addresses were given and one of the addresses belonged to another factory of the Appellant mentioned by Adjudicating authority in Para 63.2 of Order -in -Original, dt. 25.08.2011. That photocopy of the letter of intimation provided by the Appellant does not bear the signature of any officer of Department, therefore, the same cannot be treated as authentic delivery of intimations.
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