Shri Ashok Jindal, Member (Judicial)
Revenue has filed this appeal.
2. The facts of the case are that the respondents were engaged in manufacturing of cocoa and cocoa preparations viz. Chocolates as job worker of M/s Cadbury India Ltd. and also availing the CENVAT credit on duty paid inputs and capital goods. On verification of cenvatable inputs/ packing material invoices and CENVAT Credit accounts, it was noticed that the respondents maintained two different sets of account i.e. one at factory and another one which was submitted to the Range Office along with monthly ER-I returns and the entries made in the above two accounts were found to be different and it was further noticed that the respondents availed excess/double CENVAT credit of Rs.8,25,698/- during the period from January, 2003 to May, 2004. During the course of scrutiny of the records by the Audit, it was also noticed that the actual stock of packing material, on which the respondents availed CENVAT credit, was less than that accounted in the store account and on enquiry it was revealed that the respondents stored packing material outside their factory premises and the shortage of packing material found in the store/godown and the involvement of CENVAT credit was Rs.5,52,550/-. On the basis of the above facts, the respondents were issued with show-cause notice directing them to show cause as to why the amount of Rs.5,52,550/- being the amount of CENVAT credit availed on the inputs removed outside the factory premises without payment of duty should not be demanded and recovered under proviso to Section 11A of the Central Excise Act, 1944 read with Rule 12 of the Cenvat Credit Rules, 2002 alongwith interest, an amount of Rs.8,25,698/- being the excess/double CENVAT credit availed in contravention of provision of Rule 3(1) of the Rules should not be demanded and recovered in terms of proviso to Section 11A of the Act read with Rule 12 of the Rules along with interest. Penalty was also proposed under Section 11AC of the Act.
3. The adjudicating authority confirmed the demand vide order dated 30.8.2006 along with interest and penalty. Aggrieved from the said order, the respondents preferred an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) set aside the demand of Rs.5,52,550/- holding that the packing material stored outside the factory was purely a procedural lapse. With regards the excess availment of credit of Rs.8,25,698/-, he remanded the case with direction that the respondents have submitted a revised ER-1 and CENVAT account for the period January, 2003 to June 2004 with the office of the Commissioner of Central Excise, Pune-II on 17.10.2005 and the same may be taken into consideration and then it may be verified whether the entries made in the accounts maintained in the factory and the Range Office can be reconciled and it can then be verified whether double/excess credit of Rs.8,25,698/- has been availed or not.? The matter was re-adjudicated and demand of Rs.5,39,882/- was confirmed along with interest and equivalent amount of penalty was also imposed under Section 11AC. The adjudicating authority cleared held that he does not consider it necessary to go into invoice wise excess or short credit raised, otherwise he would have to call for the entire credit raised in ER-1 returns and examine the same.? Aggrieved from the said order, the respondent preferred an appeal before the Commissioner (Appeals), who dropped the demand relying on the report of the Range Superintendent saying that the excess credit has been taken of only Rs.516/- and same was disallowed asking reversal and being lower amount, no penalty was imposed. Aggrieved from the same order, the Revenue is before me.
4. The learned DR submitted that the Commissioner (Appeals) has not gone through the entire report of the Range Superintendent and as per the report, it is clear that the revised Chartered Accountant?s certificate produced before the Commissioner (Appeals) and compared with in ER-1 then the excess credit of Rs.5,39,882/- is seen. The Commissioner (Appeals) has not put any comments on this part of the report, hence the impugned order is liable to be set aside.
6. I have seen the record and examined the same. On careful examination of the record, I find that the difference is of Rs.5,39,882/- where the Chartered Accountant certified that the respondents are entitled for a credit of Rs.2,93,97,221/- and as per the Audit done by the department, the respondents have availed credit of Rs.2,91,51,548/- and as per ER-1 is Rs.2,99,37,103/-. From the above figures, it is not shown in the certificate of the Chartered accountant whether the figure in ER-1 as Rs.2,99,37,103/- is the revised figure or not and the demand has been proposed in the show-cause notice on the basis of the said figure of ER-1 returns. From this fact, it is clear that the CA certificate is not on the basis of revised ER-1 returns and it is the observation of the CA that as per Audit and the accounts audited by the CA, the respondents have availed short credit of Rs.2,45,273/-. The adjudicating authority has not considered that part of the report and the invoice wise comparison was done by the Range Superintendent and as per report of Range Superintendent the reconciliation done with invoice wise along with revised CENVAT credit account, the only difference comes out to Rs.516/-, which has been confirmed by the Commissioner (Appeals). Further, the report of the Range Superintendent clearly shows t
Please Login To View The Full Judgment!
hat the revised CA certificate was compared with figures of ER-1 returns shown originally. It is clear that the figure of Rs.5,39,882/-is not as per revised ER-1 returns, the same cannot be taken into consideration. The Commissioner (Appeals) has rightly held that no reason has been given in the Order-in-Original for not accepting the Range Superintendent?s report, who is jurisdictional officer of the respondents. The impugned order is correct as per the report of the Range Superintendent and I do not find any reason to interfere with the same. Accordingly, I do not find any merit in the appeal and the same is rejected.