SHOWPLA (DELHI) LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The issue involved in this appeal, filed by M/s. Showpla (Delhi) Ltd., relates to availment of Cenvat credit of the duty paid on capital goods transferred from their factory at Pune to their factory at Noida after lapse of a few years.

(2.) Shri A.R. Madhav Rao, learned Advocate, submitted that the Appellants have two units - one at Pune and another at Noida; that as their unit at Pune was to be expanded, they had imported Injection Moulding machines, etc. and also procured machines from the domestic market during the period from June, 1998 to August, 1998 on payment of the appropriate Additional Customs Duty/Central Excise duty; that the capital goods imported under 3 Bills of Entry Nos. 1576, 2912 and 2615 were received at Pune and entered in RG 23C, Part -I; that, however, credit was not taken in RG 23C, Part II in respect of one Bill of Entry No. 1576, dated ,5 -6 -1998; that in respect of Bill of Entry No. 2912, dated 9 -6 -98 they had taken part Modvat credit and in respect of Bill of Entry No. 2615 they had taken the entire credit at Pune; that three machines covered by Bill of Entry No. 2912 were sent from Pune unit to Noida unit in April, 2001 under Challans giving a cross reference of the duty payment to the corresponding Bill of Entry; that the total credit amount involved is Rs. 69,09,321/ - which was not taken at Pune and they took 50% credit (i.e. Rs. 34,54,660/ -) at Noida; that the Bill of Entry was also endorsed in favour of Noida unit; that in respect of Bill of Entry No. 1576 also, the machines were transferred to Noida unit under their challans along with the endorsed Bill of Entry; that these machines were not used at all at Pune unit which is apparent from the verification report given by the Range Officer at Pune; that the Central Excise Officers at Noida have also verified the machineries against the foreign suppliers invoices and the installation of machineries at Noida; that in these circumstances when the credit was not taken at Pune, Cenvat credit is not deniable for the reasons that Rule 57AE of the Central Excise Rules, 1944 provides that Credit be taken on the basis of, inter alia, Bill of Entry or an invoice issued by manufacturer of final products for clearance of inputs or capital goods as such; that there is no qualification in regard to Bill of Entry and credit can be taken in the manner done by them on the endorsed Bill of Entry. The learned Advocate also submitted that alternatively the Cenvat credit can be taken on the invoice/challan issued by Pune unit in favour of Noida unit since Clause (h) of Rule 57AE does not specify any particular format of the invoice unlike, for example, in Clauses (a), (c), (d), (e), (f) and (g). He mentioned that after amendment of Rule 57T by the Notification No. 7/99 -C.E. (N.T.), dated 9 -2 -1999, a Circular No. 441/7/99 CX, dated 23 -2 -1999, was issued that credit should not be denied and Department should ensure only that the capital goods in question have suffered duty and are being used in the process of manufacture.

(3.) The learned Advocate, further, submitted that the Commissioner has proceeded on the assumption that the credit had been originally availed at Pune unit; that as no credit was taken in respect of the machines at Pune, the credit of duty paid on capital goods cannot be dented to them at Noida. He also mentioned that in respect of Bill of Entry No. 2912, dated 9 -6 -1998, they had taken credit at Pune, out of Rs. 1.50 crore Additional Customs duty (approximately) paid by them, only Rs. 81,18,752/ - in respect of two machines out of 5 machines; that the balance amount of Rs. 69,09,321/ - was not taken at Pune; that those two machines were cleared to Noida unit after payment of duty in 1998 itself and corresponding credit was taken at Noida unit; that the said credit is not the subject matter of dispute in the present proceedings; that in respect of Bill of Entry No. 2615, dated 9 -6 -1998, the credit of the duty had been taken at Pune unit, and therefore, the credit of Rs. 1,17,164/ - taken at Noida unit was not correct which has been paid back by the Appellants with interest. Finally he submitted that the simplest thing for them was to have simply issued invoice after taking the credit of the duty paid on capital goods at Pune and the credit would have been available to Noida unit; that thus the entire issue is Revenue neutral; that thus there cannot be any intent to evade payment of duty and the show cause notice issued on 9 -5 -2002 for the extended period is time -barred; that imposition of penalty on them is totally unsustainable inasmuch as there is no suppression from the Department and in the monthly return filed, details of the documents, namely, the Bills of Entry on the strength of which the credit was taken, etc., were all shown.