NITCO LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appeal and stay application are directed against the Order -in -Original Nos. 69 -74/MAK(69 -71)/COMMR/RGD/12 -13, dated 28 -3 -2013 passed by the Commissioner of Central Excise, Raigad. The appellant is M/s. Nitco Ltd., Alibag. Acting on intelligence, the Central Excise Officers attached to the Preventive Section of the Raigad Central Excise Commissioner ate initiated an inquiry against the appellant in respect of Cenvat credit availed by them during the period 2006 -07 to 2010 -11. The inquiry revealed that the appellant had availed Cenvat credit of Service Tax paid on services which were used for trading activity of imported goods and relating to their real estate business and the credit so taken was utilised towards discharge of excise duty on goods manufactured at their factory at Alibag. The officers of the appellant firm, in their statements recorded also admitted to taking Cenvat credit without proper supporting documents and on services which were exclusively for trading activity. The amount of credit so taken was quantified at Rs. 2,42,02,704/ -. It was further observed that the Head Office of the appellant had distributed Cenvat credit of Service Tax paid on input services to the Alibag factory without getting themselves registered as an Input Service Distributor (ISD) and even though the services were availed by the factories at Alibag, Kanjur Marg and Silvasa, the entire credit was taken at the Alibag factory. The Cenvat credit so taken amounted to Rs. 2,92,78,755/ -. It was further noticed that the appellant had availed Cenvat credit without being in possession of proper documents as prescribed under Rule 9 of the Cenvat Credit Rules, 2004 and the credit taken without proper supporting documents amounted to Rs. 2,88,89,730/ -. It was also noticed that the appellant had taken credit twice in respect of a sum of Rs. 8,19,902/ - and therefore, the credit taken second time was liable to be recovered. It was also noticed that the appellant had taken excess credit amounting to Rs. 28,84,078/ - than what has been shown in the input service invoices and hence the appellant was not eligible for the credit in excess of what is specified in the documents. Thus, during the period September, 2006 to September, 2010, the appellant has availed ineligible Cenvat credit amounting to Rs. 8,80,80,062/ -. Similarly, for the subsequent period, the appellant had availed ineligible Cenvat credit amounting to Rs. 96,63,002/ - during October, 2010 to December, 2011. On conclusion of the investigation, show cause notices were issued proposing to recover the above ineligible Cenvat credit taken by the appellant. The appellant contested the demands and submitted that ineligible credit taken by them would be only Rs. 3,23,60,407/ - which they had reversed during the course of investigation. However, the adjudicating authority did not accept this plea and confirmed the Cenvat credit demands of Rs. 8,80,80,062/ - and Rs. 96,63,002/ - under the provisions of Rule 14 of the Cenvat Credit Rules read with Section 11A of the Central Excise Act along with interest thereon under Section 11AB. He also imposed a penalty of Rs. 8,80,80,062/ - on the appellant under the provisions of Section 11AC and a penalty of Rs. 19,62,600/ - under Rule 15 of the Central Excise Rules, 2002. Aggrieved of the same, the appellant is before us.

(2.) THE learned Counsel for the appellant made the following submissions: - -

(3.) WE have carefully considered the submissions made by both the sides.