MIRC ELECTRONICS Vs. COMMISSIONER OF CENTRAL EXCISE
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
COMMISSIONER OF CENTRAL EXCISE
Referred Judgements :-
HINDUSTAN STEEL LTD. V. STATE OF ORISSA
CCE V. SOMAIYA ORGANO CHEM.
LAWKIM V. CCE
IND -SWIFT LABORATORIES LTD. V. UOI
COSMO FILMS LTD. V. CCE
LG ELECTRONICS PVT. LTD. V. CCE,PUNE -III
INTERNATIONAL AUTO LTD VS. COMMISSIONER OF CENTRAL EXCISE
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M.V. Ravindran, J. -
(1.)ALL these appeals are disposed of by a common order as they are raising the same question of law and arise out of same set of facts. The relevant facts that arise for consideration are that during the visit of the premises of the main appellant M/s. MIRC Electronics it was noticed by the officers that appellant was importing various items like colour picture tubes, components and accessories and sending the same to the co -makers for manufacture of colour Television sets. While clearing the inputs from their factory premises, the assessee was doing so by raising an invoice on which they indicated reversal of Central Excise duty/CVD. It was noticed by the officers that the appellant having availed Cenvat credit of Special Additional Duty (SAD) did not reverse the same while removing the components to their co -makers. The amount of SAD involved in this case was reversed by the appellant before the issuance of show cause notice as also during the pendency of the matter. Show cause notice was issued to the appellant for appropriation of the amounts paid by them and also for demand of interest and imposition of penalties. Adjudicating authority after following due process of law came to the conclusion that the main appellant as well as other appellants needs to be imposed with penalties and interest also needs to be demanded.
(2.)LEARNED Counsel after taking us through show cause notice, order -in -original and the records would submit that the issue is due to disfunctioning of the computers software wherein the SAD duty was visualized and no provisions were made in system to catch this data and was not considered when the SAP programme were made. It is his submission that this non -indication of payment of SAD was detected by them on 30th May 2006. The said issue was taken up with their office; kept in touch with the software programmers who had installed the said programme in the appellants factory. He would submit that they had already noticed the issue the lacunae and has started paying duty by TR -6 challan. He would submit that there was no intention to evade duty as the appellant had paid duty of CVD which was accepted and is undisputed. The submission of the learned Counsel is that an identical issue on the same set of facts was decided by this Bench in the case of LG Electronics Pvt. Ltd. v. CCE, Pune -III - : 2010 (255) E.L.T. 135 (Tri. -Mumbai). It is his submission that the said order was carried in appeal of the Revenue to the Hon'ble High Court and the same was dismissed as reported at 2014 (308) E.L.T. A118 (Bom.). He would also draw our attention to the decision of this Tribunal in the case of Cosmo Films Ltd. v. CCE - 2010 (251) E.L.T. 130 (Tri. - Mum.) which was also considering the same issue but in respect of some other importers. He would submit that even this judgment of the Tribunal was carried in appeal by the Revenue and the same was dismissed by the Hon'ble High Court on 28 -7 -2011. He produced the copies of the said judgment. It is also his submission that the entire exercise of the Revenue of demanding duty of SAD from the appellant would be revenue neutral as the appellant's co -makers avail Cenvat credit and discharged duty liability on the colour TV based upon the MRP of the main appellant i.e. MIRC Electronics. He would submit that matter of fact the amount in dispute in these appeals, the co -makers of the appellant had already availed Cenvat credit paid by the appellant on supplementary invoices.
Learned Departmental Representative while drawing our attention to the very same e -mail correspondence between the Senior personnel of the main appellant would submit that when the main appellant was aware of the problem, they should have informed the department or approached the department for clarification. He would also submit that the appellants were aware of the problem hence there is suppression of fact with intention to evade duty. He would also submit that out of total demand, question of revenue neutrality would not arise atleast in respect of one of Rs. 14,63,111/ - which was in respect of inputs cleared to branches/service centers and there is no question of availment of Cenvat credit by the said branches/Service Centers.
(3.)IN rejoinder the learned Counsel would submit that the entire issue is of whether the appellant has suppressed any material fact with intention to evade duty. He would draw our attention to the confirmed demands on which he submits that as per Rule 14 of Cenvat Credit Rules, 2004 read with Section HA of the Central Excise Act, 1944, penalties are imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. His submission is that the provisions of Rule 14 of Cenvat Credit Rules, 2004 are not attracted in this case. He would submit that it is the ratio of the judgment of the Tribunal in the case of LG Electronics Pvt. Ltd. (supra).
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