HAWKINS COOKERS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant are manufacturers of pressure cooker and one of the input used is brass rods. The appellant during the period from May 2005 to April 2006 purchased brass rods from a registered dealer M/s. Manu Metal, New Delhi, who, in turn, had purchased the brass rods from the manufacturers. Subsequently, in course of investigation it was found that dealer M/s. Manu Metal by issuing invoices to his customers was passing on higher amount of credit than the duty actually paid on the goods. This was being done by mentioning duty in the invoices on the basis of higher amount of duty per unit than the duty per unit in the manufacturer's invoices. On this basis, the department has alleged that during the period of dispute, an amount Cenvat credit of Rs. 62,000/ - was wrongly availed by the appellant. Initially when by issue of show cause notice dated 22 -8 -2008 the proceedings were initiated for recovery of this credit along with interest and imposition of penalty, the same were dropped by the Deputy Commissioner vide order -in -original dated 22 -9 -2009 on the ground that the appellant had no knowledge about the higher credit having been passed on by the registered dealer and, as such, there was no fraud on the part of the appellant in availing the higher credit. However, this order of the Deputy Commissioner was reviewed by the Commissioner by filing of a review appeal before the Commissioner (Appeals). The CCE (Appeals) by the impugned order -in -appeal dated 29th October 2010 reversed the Deputy Commissioner's order and confirmed the Cenvat credit demand of Rs. 62,000/ - along with interest and imposed penalty of equal amount under Rule 15(2) of the Cenvat Credit Rules read with Section 11AC. The Commissioner (Appeals) held that the respondent have not come out clean as they continued to avail higher Cenvat credit and failed to take reasonable steps as prescribed in Rule 9(5) of Cenvat Credit Rules to ensure that only the admissible Cenvat credit is availed, while throughout during this period, the registered dealer M/s. Manu Metal was passing on higher amount of Cenvat credit than the duty actually paid on the goods. Against this order of the Commissioner (Appeals), this appeal has been filed by the appellant. Heard both the sides.

(2.) MS . Rajeshwari K.G., Advocate, the learned Counsel for the appellant, pleaded that though it is an admitted position that the registered dealer M/s. Manu Metal during the period of dispute passed on more credit than the duty actually paid by applying the higher rate of duty per unit, that the fraud, if any, has been committed by the registered dealer for which the action should have been taken against M/s. Manu Metal, and the appellant cannot be penalised for the fraud committed by the registered dealer, that there is no evidence whatsoever indicating that the appellant had knowledge about higher duty having been passed on by the registered dealer, that even in the Commissioner (Appeals)'s order (para 5 of the order), it has been mentioned that the fraud has been committed by the dealer, that in view of this, there is no justification for assuming that the appellant was also a party to this fraud and applying the extended limitation period and also invoking the penal provisions of Section 11AC, that in this regard she relies upon the Tribunal's judgment in the case of CCE, Mumbai v. Anand Arc Electrodes Pvt. Ltd. reported in : 2010 (252) E.L.T. 411 (Tri. - Mumbai), wherein the Tribunal has held that the assessee is eligible to take credit of duty on the strength of duty paying document which was correctly taken by them and the assessee was not having any responsibility to ensure that the correct duty is paid by the manufacturer, and that ratio of this judgment is squarely applicable to the facts of this case. She, therefore, pleaded, that the impugned order confirming the Cenvat credit demand against the appellant and imposing equal amount of penalty is not sustainable, as the Cenvat credit demand is time barred, and the provisions of Rule 15(2) of Cenvat Credit Rules, read with Section 11AC are not applicable.

(3.) I have carefully considered the submissions from both the sides and have perused the record.