By TIOL News Service

MUMBAI, JULY 10, 2015: THE appellant is engaged in the manufacture of electronic goods namely Televisions and Television assemblies [Ch 85].

A SCN was issued alleging that the appellant availed CENVAT credit of Special Additional Duty (SAD) of Rs.15,65,743/- on the strength of supplementary invoices issued by M/s MIRC Electronics Limited and the said credit was not available in view of the provisions contained in Rule 9(1)(b) of CCR, 2004 as the duty was paid by M/s MIRC, after detection of the case for non-levy or short Levy, by reason of fraud, collusion or wilful mis-statement or suppression of facts etc. inasmuch as the raw materials were cleared by M/s MIRC as such under Rule 3(5) of the Rules without payment of duty.

The adjudicating authority upheld the allegation and confirmed the demand along with equivalent penalty and interest.

The Commissioner(A) upheld the demand but in the matter of penalty took a view that since the appellant had taken credit on the basis of supplementary invoices and in absence of any evidence that the appellant had a role in the alleged omission by M/s MIRC, penalty was set aside.

Being aggrieved, the appellant is before this Tribunal.

The appellant submitted that the dispute is no longer res integra as for the same matter, appeals filed by Mirc Electronics & 2 others have been allowed by the Tribunal vide order dated 20th January, 2015 [2015-TIOL-636-CESTAT-MUM].

The AR had nothing new to offer.

The Bench, therefore, held -

"6. Having considered the rival contentions, I find that the present proceedings were initiated pursuant to the discrepancy noted by Revenue in the records of M/s MIRC Electronics. As the said issue was concluded in favour of M/s MIRC Electronics, no cause of action remains against the present appellant. As such I set aside the impugned order. Thus, the appeal is allowed with consequential benefit if any."

In passing: This is what was held by the Tribunal in the referred case of Mirc Electronics [2015-TIOL-636-CESTAT-MUM] -

CE - Appellants availing CENVAT Credit of CVD/CE duty and SAD paid by them when they import the parts, components and accessories for manufacturing of Colour T.V. - Appellant had not reversed SAD at the time of removal of parts, components and accessories, but subsequently discharged duty liability along with interest - amount of SAD involved in this case was reversed by the appellant before the issuance of show-cause notice as also during the pendency of the matter - SCN invokes provisions of Rule 14 of CCR, 2004 r/w s. 11A for demanding the amount which is equivalent to an amount of SAD on parts and components cleared to co-makers - Non-reversal of SAD cannot be with intention to evade duty on such components, as the appellant had discharged appropriate duty liability of CVD/CE - Since there is revenue neutral situation, there cannot be any intention to evade duty - Order set aside and appeal allowed: CESTAT

(See 2015-TIOL-1388-CESTAT-MUM)