Mit Wi.A. *t altar Date of Issue :

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1 33rWr. ZiWtRr retk err, 3154" I OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD4 3Frr4 l Sian, tiffaer4victi two CENTRAL EXCISE BUILDING, NEAR GOVT. POLYTECHNIC alarrarj1; arsinrc AMBAWADI, AHMEDABAD F. No: V.84/15-07/Patel/ADC/0A-I/2014 flg'4"s 1 : Date of Order : Mit Wi.A. *t altar Date of Issue : FM" ITiftff / Passed by: Shri P. M. RAO, JOINT COMMISSIONER ************************************************************************ FLW AfOrder-In-Original No.: 03XX-I Ahmd/JC/PMM015 * **** * ***** ***** ***** *********** ***** ****** ***** ***** * ***** ***** * **** * ********* ZIr 111". 3B. alf4a. (zit).1, 1/9* (Wdt) rat.mi11 %ell Sidi t, (301 ) cldlci Tzrzitir 1Wr *t ciich t I This copy is granted free of charge for private use of the person(s) to whom it is sent. elfd chl 3 3fraw tr Th-t 311:17C 31T-Tq' chic!! t, at 4$" r 31T-br fatic 31137a- (3141-6), i c41c c4414 tardw, 315FaarC N 1-1 ir.v.-1 a 5T t1mc11 t I ictri " WW1' tr 31T-bi tiieflet 00) 3111S Sich 1ATLF1 chi.) tt tittlta grat filtr. Ofiern L Wkr 2.00/- ciei wro-e4144iete1!1 faitac wirr vrity I Any person deeming himself aggrieved by this Order may appeal against this order in Form E.A.1 to Commissioner (Appeals), Central Excise, Central Excise Bhavan, Near Government Polytechnic, Ambawadi, Ahmedabad -15 within sixty days from date of its communication. The appeal should bear a court fee stamp of Rs.2.00/- only. sciti 3i pr Clitzit 4 wi Q-1 4 cifit4 Tai L I 3+14t 0-41q 3c414 qff (3iltW) fa4.4j-iiciell, 2001 t Pew 3 3M' ft k 391T11". 3ititgWa3it oicaitt rt7itrit rev otiolq-ritvi *,94meliti ricori 7EQ- : The Appeal should be filed in form No. E.A.-1 in duplicate. It should be filed by the appellants in accordance with provisions of Rule 3 of the Central Excise (Appeals) Rules, It shall be accompanied with the following: *T Sift I Copy of the aforesaid appeal. srftzfr (3tie 4 trw 3-fr 3Thaw *t Sinai 1t1 srisr tar ftfrk fds, urt anidi 311a /- a r 0-o W-1 sr fectic FaVT R ii Mittr I Copies of the Decision (one of which at least shall be certified copy of the order appealed against) or copy of the said Order bearing a court fee stamp of Rs.2.00/-. Tfr att31- t 41% 319--a" (31trtR) t 7.5% at6izrc Pt' aord-hoil qsztic p 3gra jqlio11 al6i erkotthloil i krk--4 facic p Mich! 31Sr4 chi4) 31titg *t sir 31mcfl ti An appeal agaisnt this order shall lie before the Commissioner (Appeals) on payment of 7.5% of the duty demanded where duty or duty and penalty are in dispute, or penalty, where penalty alone is in dispute". Ni t/reference :chttui aa1311 it:ten Tut. F.No: V.84/15-07/Patel/ADC/0A-I/2014 dated issued to M/s. Patel Alloys Steel (P) Ltd, Vatva, Ahmedabad.

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3 // 1 // 010 No. 03/CX-1Ahmd/JC/PMR/2015 BRIEF FACTS OF THE CASE: M/s. Patel Alloy Steel (P) Ltd, , Phase II, GIDC, Vatva, Ahmedabad (herein after referred to as 'the noticee') is registered with the Central Excise department having number AABCP2984JXM001 for manufacture of Steel/SGI/ClCasting Engineering items & Wind Mill parts falling under heading 73 an 84 of Central Excise Tariff Act, The noticee was availing cenvat credit facility under Cenvat Credit Rules, 2004 on their inputs as well as capital goods. The noticee had procured capital goods worth Rs 1,29,15,845/- and Rs 73,12,366/- during the financial years and (upto ) respectively and availed first 50% of the Cenvat Credit on these capital goods to the tune of Rs 10,54,211/- and Rs 5,96,688/- respectively during the year in which it was procured. The balance of the cenvat credit was availed in the subsequent financial years on and respectively. However these capital goods on which the credit was availed were sent to their sister concerns, namely, M/s Patel Alloys Steel (P) Ltd, unit II and M/s Patel Alloys (P) Ltd, unit III, for jobwork, but the same were not returned to their premises even after lapse of 180 days from the date of clearance. 2.1 It was also further observed that the capital goods were not in their possession even at the time of availing the second half of the cenvat credit. Moreover no extension was sought from the jurisdictional Assistant Commissioner/Deputy Commissioner of Central Excise to bring back the capital goods sent for job work. 2.2 It was also observed from the records that the above mentioned sister concerns of the noticee and who were also doing the job work of the noticee, are also registered with the department and therefore they are both having different entity. 3. From the facts mentioned above, it was clear that the noticee had contravened the provisions of Rule 4(2)(b) of Cenvat Credit Rules, 2004, in as much as they had wrongly availed the second half of the cenvat credit to the tune of Rs 16,50,899/- on the capital goods cleared from the factory of the noticee without having possession of the said capital goods. Thus it was also clear that the noticee had failed to make payment of Rs 33,01,798/-, the total amount equivalent to the cenvat credit availed on the capital goods cleared from their factory to their sister concerns for job work purpose during the years and as the capital goods were not received back in the factory within 180 days, thereby violating the provisions of Rule 4(5)(a) of Cenvat Credit Rules, Further it was clear that the noticee had also violated the provisions of Rule 3(5) of Cenvat Credit Rules, 2004 in as much as they cleared the capital goods as Page 1 of 5

4 /1 2 // 010 No. 03/CX-I Ahmd/JC/PMR/2015 such, without making payment of duty equivalent to the cenvat credit availed and without issuing proper invoice required under Rule11 of Central Excise Rules, On issuance of show cause notice on , reversal of Rs 33,01,798/- was confirmed along with interest and penalty. 5. Vide OIA No 64/2008 dt , the noticee's appeal was rejected, but when the same was appealed in CESTAT, the matter was remanded back to Commissioner (A) vide Order No A/771/WZB/AHD/2011 dt / for a fresh decision with regard to imposition of penalty only Commissioner (A) vide OIA No 86/2011(Ahd-I)CE/MM/Commr(A) dt upheld the order in original but gave an option to pay 25% of the penalty, if the same along with duty/cenvat credit as well as interest is paid within 30 days of the receipt of the OIA under Section 11AC of Central Excise Act, The above order of Commissioner (A) was challenged again by the noticee in the Tribunal. Honorable CESTAT vide Order No. A/10535/WZB/AHD/2013 dated / set aside the penalty imposed on the noticee under the provisions of Section 11AC of Central Excise Act, As a consequence of the Tribunal setting aside the penalty imposed on the noticee under the provisions of Section 11AC read with the provisions of Rule 15 of the Cenvat Credit Rules, 2004, with consequential relief, the noticee filed a refund claim on seeking the refund of penalty of Rs 8,25,450/- paid by them as per Commissioner(A)'s order dated However the above said CESTAT's order has not been accepted by the department on the grounds that CESTAT was not right in concluding that the entire matter was revenue neutral and that all the units of the noticee were the same even though all the three units have separate central excise registration. Department also did not find it correct that the cenvat credit was taken by the noticee at a time when the capital goods were not in possession of the noticee thus proving the intention of the noticee to evade payment of duty/cenvat credit For the reasons stated supra, a Tax Appeal had been filed by the department before the Hon'ble High Court of Gujarat against the said Tribunal's order. 8. The notice filed a refund application on with Assistant Commissioner, Division III, Central Excise, Ahmedabad-I, claiming refund on the basis of CESTAT's order No A/10535/WZB/AHD/2013 dt / Honoring Page 2 of 5

5 /1 3 // 010 No. 03/CX-I Ahmd/JC/PMR/2015 Tribunal's order, the Assistant Commissioner vide his 010 No MP/17/AC/ Ref dated sanctioned the refund of Rs 8,25,450/-. 9. Now, since the department had filed an appeal No. 649/2013 registered on before the Honorable High Court of Gujarat against the above mentioned Tribunal's order and the refund was sanctioned by the Assistant Commissioner, Central Excise Division-Ill, Ahmedabad-I Commissionerate under Order in Original Number MP/17/AC/ Ref dated , in pursuance to the Tribunal's order ibid amounting to Rs 8,25,450/-, the said refund is erroneous and the same appeared to be recoverable from them under the provision of Section 11A(1)(a) along with interest under Section 11AA of Central Excise Act, Therefore, M/s. Patel Alloy Steel (P) Ltd, No , Phase-II, GIDC, Vatva, Ahmedabad were called upon vide impugned show cause notice to show cause as to why:- (i) (ii) The refund of 8,25,450 (Rupees Eight Lakhs Twenty Five Thousand Four Hundred and Fifty only) which has been erroneously sanctioned to M/s. Patel Alloy Steel (P) Ltd., vide Order-In-Original No. MP/17/AC/ Ref. dated , should not be demanded and recovered under the provisions of Section 11A(1)(a) of Central Excise Act,1944; Interest should not be charged/ recovered from them under Section 11AA of the Central Excise Act, DEFENCE REPLY: 11. The assessee has submitted it's defence reply dated wherein they have stated that the charges and allegations purported to have been made in the Show Cause Notice are on the basis of the filing of an appeal before the Hon'ble High Court. 12. That the appeal filed against the CESTAT order No. A/10535/VVZB/Ahd/2013 dtd has been dismissed by the Hon'ble High Court of Gujarat by order dtd Therefore the very basis of the show cause notice does not hold the ground. 13. That Hon'ble High Courts and Appellate Tribunals have been consistently taking the view that mere filing of appeal before the Higher Forum does not automatically stay the operation of the earlier order as held in the case of CCE, New Delhi-I vs. Ishaan Research Laboratories P. Ltd (172) ELT-484(Tri. Del.) and Vidarbha Vineer Industries vs. ACCE 1991 (55) ELT-167 (Born.) and Dhanalaxmi Controls & Equipments vs. CC, Cochin 2007 (213) ELT-284 (Tri.Bang.) Page 3 of 5

6 1/4// 010 No. 03/CX-I Ahmd/JC/PMR/2015 PERSONAL HEARING: 14 The personal hearing in the matter was held on , wherein Shri P. G. Mehta, Advocate appeared on behalf of the assessee for the same and reiterated the stand taken by them in their written submission dtd and requested to decide the case on its basis. DISCUSSIONS AND FINDINGS: 15 I have carefully gone through the case records and both written and oral submissions made by the assessee in their defense. From the facts of the case on records, I find that the basic issue to be dealt with in the impugned show cause notice pertains to eligibility of the refund of Rs.8,25,450/- sanctioned to the noticee in context of the appeal filed by the department as detailed in the show cause notice. 16. I find that as per the show cause notice, the department had filed an appeal 649/2013 registered on before the Honorable High Court of Gujarat against the Tribunal's order No. A/10535/WZB/Ahd/2013 dtd and the refund ibid amounting to Rs.8,25,450/- was sanctioned by the Assistant Commissioner, Central Excise, Division-III, Ahmedabad-I Commissionerate under Order in Original No. MP/17/AC/ Ref dated , in pursuance to the said Tribunal's order. 17. I also find that Hon'ble High Court of Gujarat while dismissing the aforesaid appeal of the department has observed as under: [3] At the outset, it is required to be noted that in the present appeal, the amount of penalty involved is Rs.8,25,450/-. Therefore, as such, in view of the Circular dated issued by Department, the appeal ought not to have been preferred by the department, as the amount involved is less than Rs.10 lakhs, unless the issue involved is recurring and/or it raises a pure substantial question of law. [4] Even otherwise, we have considered the impugned judgment and order passed by the CESTAT on merits. [5] It appears from the impugned judgement and order that learned CESTAT has quashed and set aside the order of penalty imposed under Section 11AC of the Central Excise Act, 1944 read with Rule 15 of the Cenvat Credit Rules, 2004 on the ground that there will be a revenue neutrality and there was no loss to the department. While holding in para-9, the learned CESTAT has observed as under : "On the factual matrix as reproduced hereinabove, I find that the entire case can be decided on the question of revenue neutrality. When it is not disputed that the capital goods on which credit was availed was transferred / cleared for the purpose of doing job work to the appellant's own unit i.e. unit No.2 & 3 within the same Commissionerate, it cannot be said that the appellant had cleared the capital goods to another person or assessee. At this Page 4 of 5

7 // 5 // 010 No. 03/CX-I Ahmd/JC/PMR/2015 juncture, I find that there is no dispute as to of the units being the same i.e. M/s. Patel Alloys (Steel) (P) Ltd. Further if the appellant's other units have taken the credit of the capital goods and subsequently reversed the same and credit has been taken by the unit No.1, this itsel f would prove that the appellant's other units were registered with Central Excise Authority. find strong force in the contentions raised by the learned counsel that the entire issue is revenue neutral. I find that, the ground of revenue neutral is a strong ground for setting aside any penalty imposed on the appellant as there cannot be any intention to evade duty, more so, in the case in hand." [6] Considering the aforesaid facts and circumstances of the case, when the penalty under Section 11AC of the Central Excise Act, 1944 has been quashed and set aside, it cannot be said that the teamed Tribunal has committed any error and / or illegality. On facts, no question of law much less any substantial question of law has arisen. Under the circumstances, the present appeal deserves to be dismissed and is accordingly dismissed. 18 I further find that as per letter F.No. CCE-I/Legal/TA-03/2013 dated issued by the Superintendent (Legal), Board vide letter F.No. 276/281/2013-CX-8A dated 13/1/2014 has decided not to file SLP before Supreme Court against the said order of Hon'ble High Court. 19. In light of the above facts, the matter stands decided in the favour of the noticee and accordingly, in light of the said order of Hon'ble High Court, I pass the following order in the matter: ORDER I drop the proceedings initiated against M/s. Patel Alloy Steel (P) Ltd. vide show cause notice issued vide F.No. V.84/15-07/Patel/ADC/0A-1/2014 dated 28/2/2014. ( Mo an Rao) Joint Commissioner Central Excise, Ahmedabad-1 F.No. V.84/15-07/Patel/ADC/0A-1/2014 Date :RI By Registered Post A.D/Hand Delivery To, M/s. Patel Alloy Steel (P) Ltd, No , Phase-II, GIDC, Vatva, Ahmedabad Copy to:- 1. The Commissioner, C.Ex. A'bad-I (Atten.: A.C. (RRA)) 2. The Assistant Commissioner, Central Excise Division-Ill, Ahmedabad-I. 3. The Superintendent, Central Excise, AR-Ill, Division-Ill, Ahmedabad-I...}!' The Superintendent (Systems) 5. Guard File. Page 5 of 5