Vedanta Limited Vs C.C.E (CESTAT Ahmedabad)
CESTAT Ahmedabad held that duty passed on via supplementary invoice is eligible for cenvat credit as it is not due to reason of any suppression of fact, fraud, collusion or wilful mis-statement, etc. and hence not barred by provisions of Rule 57AE of Central Excise Rules, 1944.
Facts- In pursuance to an intelligence that M/s. Sterlite Industries (India) Ltd., Tuticorin has raised supplementary invoices in favour of Appellant i.e. M/s Sterlite, Silvasa (Now known as M/s Vedanta Ltd.) for differential duty paid by them on account of short payment of Central Excise Duty on clearance of ‘Copper Anode’ after issuance of show cause notice for undervaluation of ‘Copper Anode’ and suppression of actual cost of production.
On scrutiny of the invoices produced by the assessee, it was observed by the department that during April, 2001, M/s Sterlite, Silvasa has availed Cenvat Credit amounting to Rs. 15,06,93,732/- on the strength of supplementary Invoices issued by M/s. Sterlite, Tuticorin. It was also observed that for short payment of duty proceedings were initiated against the M/s Sterlite, Tuticorin by issuing periodical show cause notices proposing demand of Central Excise Duty.
The said show cause notices were adjudicated and the demand was confirmed under Section 11A(2) of the Act. After the issuance of SCNs and few days before the adjudication order, M/s Sterlite, Tuticorin paid the amount of duty and issued supplementary invoices in favour of the appellant’s unit M/s Sterlite, Silvasa unit (Appellant) who in turn took credit of the duty in their cenvat credit account.
Appellant was issued show cause notice for denial of cenvat credit on the ground that the in terms of Rule 57AE of Central Excise Rules, 1944. The adjudicating authority confirmed the cenvat demand, interest and imposed penalty.
Conclusion- Held that it is clear that the duty of Rs.15,06,93,732/- paid by the appellant’s Tuticorin unit which was passed on to the appellant’s unit by issuing the supplementary invoice is not due to reason of suppression of fact, fraud, collusion or wilful mis-statement, etc. accordingly, the bar provided in Rule 57AE is not applicable in the facts of the present case. Therefore, the appellant is legally entitled for the cenvat credit on the supplementary invoices.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The present appeals are directed against the impugned order-in-original No. DMN-EXCUS-000-COM-002-18-19 dated 28-05-2019 passed by the Commissioner, Central GST & Central Excise, Daman.
1.1 Briefly the facts of the present case are that in pursuance to an intelligence that M/s. Sterlite Industries (India) Ltd., Tuticorin has raised supplementary invoices in favour of Appellant i.e. M/s Sterlite, Silvasa (Now known as M/s Vedanta Ltd.) for differential duty paid by them on account of short payment of Central Excise Duty on clearance of ‘Copper Anode’ during May,1997, to June, 2000, after issuance of show cause notice for undervaluation of ‘Copper Anode’ and suppression of actual cost of production. On scrutiny of the invoices produced by the assessee, it was observed by the department that during April, 2001, M/s Sterlite, Silvasa has availed Cenvat Credit amounting to Rs. 15,06,93,732/- on the strength of supplementary Invoices issued by M/s. Sterlite, Tuticorin. It was also observed that for short payment of duty proceedings were initiated against the M/s Sterlite, Tuticorin by issuing periodical show cause notices proposing demand of Central Excise Duty covering the period from May 1997 to June 2000. The said show cause notices were adjudicated and the demand was confirmed under Section 11A(2) of the Act. After the issuance of SCNs and few days before the adjudication order, M/s Sterlite, Tuticorin paid the amount of duty in the month of March, 2001 and issued supplementary invoices in favour of the appellant’s unit M/s Sterlite, Silvasa unit (Appellant) who in turn took credit of the duty in their cenvat credit account.
1.2 Appellant was issued show cause notice for denial of cenvat credit on the ground that the in terms of erstwhile Rule 57AE of Central Excise Rules, 1944, Cenvat Credit is not admissible on supplementary invoices where additional amount of duty become recoverable from manufacturer or importer of inputs or capital on account of any non-levy or short levy by reason of fraud-collusion or any willful mis-statement or suppression of facts or contravention of any provisions of Central Excise Act,1944 or rule made thereunder with an intent to evade payment of Central Excise Duty. The adjudicating authority vide order dated 14.09.2006 confirmed the cenvat demand, interest and imposed penalty. The said order was challenged by Appellant before the Tribunal and vide Final Order dated 16.04.2009 matter was remanded to the adjudicating authority for denovo adjudication.
1.3 In such denovo adjudication, the Learned Commissioner vide impugned Order-in-Original held that the appellant has wrongly availed credit and confirmed the demand along with interest and imposed equal amount of penalty. A separate penalty of Rs. 5,00,000/- was imposed on Shri Ramesh Nair , Associates General Manager (Commercial) of the Appellant and of Rs. 1,00,000/- on Shri K.V. Rao, Associate Manager (Commercial), Authorized Signatory of the appellant under Rule 209A of the erstwhile Central Excise Rules, 1944. Aggrieved by the said order-in-original, the appellants are before this Tribunal.
02. Shri Vishal Jain & Ms. Dimple Gohil, learned counsels appearing for the appellant submits that there is no allegation of finding of fraud, suppression with an intention to evade payment of duty against the Tuticorin unit and in the absence of the same, credit cannot be denied at the end of the Appellant unit. He placed reliance of the following judgments:-
