gases electrodes july 11 to dec 11

7/27/2019 Gases Electrodes July 11 to Dec 11

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OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE ANDCUSTOMS, NO.71, CLUB ROAD, BELGAUM.

C No Date:DRAFT SHOW CAUSE NOTICE

M/s UltraTech Cement Ltd., (Unit: Rajashree Cement Works),Aditya Nagar, Malkhed are holders of Central Excise RegistrationNo.AAACL6442LEM017 are engaged in the manufacture of Cementand Clinker falling under the Chapter 25 of Central Excise Tariff Act,1985. They are availing Cenvat Credit of duty paid on inputs, capitalgoods and also availing the Cenvat credit of Service Tax paid oninput services under Rule 3 of the Cenvat Credit Rules, 2004.

2. The assessee is receiving Welding Electrodes, Oxygen andAcetylene Gases, Lubricants and Hydrochloric Acid and using themfor maintenance of the plant and machinery and availing CENVATcredit on these as inputs. Welding electrodes and Gases are used toweld the machinery as part initial installation as well as formaintenance and repair. Lubricants and Hydrochloric Acid are beingused for maintenance of the machinery. The activity ofrepairing/maintenance of machinery does not come within theambit of process of manufacture and therefore anything used forsuch repairs cannot be held to have been used in or in relation tothe manufacture of final product.

3. The definition of inputs under CENVAT Credit Rules, 2004restricts the goods used in or in relation to manufacture of finalproducts within the factory of production. Goods used in anyparticular activity in the course of the process of converting rawmaterials into finished goods can only be held to have been used inor in relation to the manufacture of goods. The activity of repairsand maintenance of machinery is in no way connected evenremotely with the process of manufacture of goods. They areneither partially nor integrally connected with the process ofmanufacture of final product. The welding electrodes, Gases,Lubricants and Hydrochloric Acid used by the assessee for repairsand maintenance of machinery cannot be treated to have beenused in relation to the manufacture of final products as they arenot used in co-extensively with the process of manufacture ofcement/clinker and hence not integrally connected with themanufacture. Hence, the usage of Welding Electrodes, and Gasesused for repairs and maintenance of machinery is out of the purviewof inputs as per the statutory definition and the assessee is notentitled for CENVAT credit on such goods under CENVAT CreditRules, 2004.

4. During the period fromJuly 2011 to December 2011, theassessee have wrongly availed Cenvat credit Rs.32,09,356/- (BEDRs.29,57,654/-, Education Cess Rs.59,152/-, Secondary and HigherEducation Cess Rs.29,577/- and AED of Rs.1,62,973/-) in respect ofgoods valued at Rs.2,30,63,513/- as detailed in Annexure to thisShow Cause Notice as Inputs under Rule 3 of Cenvat Credit Rules,2004. Thus, it appears that the assessee has violated the provisionsof Rule 2 and Rule 3 of Cenvat Credit Rules, 2004. Hence, the totalCenvat Credit of Rs.32,09,356/- availed on Gases, WeldingElectrodes, Lubricants and Hydrocloric Acid used as inputs isrecoverable under Rule 14 of Cenvat Credit Rules 2004 read with


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Section 11A(1) of Central Excise Act, 1944 along with interest asapplicable. The goods are also liable for confiscation under Rule 15(1) of Cenvat Credit Rules, 2004. Penalty is also imposable underRule 15(1) of Cenvat Credit Rules 2004.

5. Therefore, the assessee is hereby required to show cause tothe Additional Commissioner of Central Excise and Customs, No.71,Club Road, Belgaum-590001, as to why:

i) CENVAT credit of Rs.32,09,356/- (BED Rs.29,57,654/-,Education Cess Rs.59,152/-, Secondary and HigherEducation Cess Rs.29,577/- and AED of Rs.1,62,973/-) inrespect of Gases, Welding Electrodes, Lubricants andHydrocloric Acid, availed and utilised, during the periodfrom July 2011 to December 2011, (as detailed inAnnexure enclosed to the Show Cause Notice) should notbe disallowed/demanded and recovered from them in cashunder Rule 14 of Cenvat Credit Rules, 2004 read withSection 11A(1) of Central Excise Act, 1944.

ii) Interest at applicable rate should not be charged,demanded and recovered under Rule 14 of Cenvat CreditRules, 2004 read with Section 11AA of Central Excise Act1944.

iii) Inputs valued at Rs.2,30,63,513/- in respect of which theassessee has taken and utilized Cenvat credit wronglyshould not be held liable for confiscation under Rule 15 (1)

of Cenvat Credit Rules, 2004 andiv) Penalty should not be imposed on them for the said

contravention under Rule 15(1) of Cenvat Credit Rules2004.

6. The assessee is further directed to produce at the time ofshowing cause all the evidences upon which they intend to rely insupport of their defence and indicate whether they would like to beheard in person before the case is adjudicated. If no mention ismade of this in his written explanation it would be presumed thatthey do not desire a personal hearing.

7. If no cause is shown against the action proposed to be takenwithin 30 (Thirty) days of receipt of this notice or if the assesseedoes not appear before the Adjudicating Authority when the case isposted for hearing, the case will be decided ex-parte.

8. Normally no extension of time will be granted either for filingthe written reply or for postponement of personal hearing. If for any

justifiable reasons, extension is sought for, the request shall reachthis office at least one week before the scheduled date.

9. The Show Cause Notice is issued without prejudice to anyother action which may be taken or any other or any furtherproceedings which may be initiated against the above said assesseeunder the provisions of Central Excise Act 1944 and the rules madethereunder or any other law for the time being in force in India.

10. The department reserves the right to add, amend, modify,delete and part or portion of this notice and any such addendum,amendment, modification, deletion if made shall be deemed to bepart and partial of this notice.


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11. Assessees letter dated 14.05.2012 is relied upon for issuanceof the instant Show Cause Notice.

ADDITIONAL COMMISSIONERCENTRAL EXCISE, BELGAUM

ToM/s UltraTech Cement Ltd., BY R P A D(Unit : Rajashree Cement Works),Aditya Nagar,Malkhed.

Copy to the:1. Assistant Commissioner of Central Excise, Gulbarga Division,Gulbarga.2. Superintendent, Central Excise, Range A, Gulbarga


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Em Ar, MlSr EimS, xq vsM Luq xuMU M Mrsr,

O.u. xOzl M mN, MmlU, asoa 585104OFFICE OF THE DEPUTY COMMISSIONER OF CENTRAL EXCISE,

CUSTOMS & SERVICE TAX,BEHIND TV STATION, KAPNOOR, GULBARGA-585 104

C.No.V/25/3/23/2012 Adjn Date: 28.05.2012

ToThe Commissioner, (Adjudication Section)

Central Excise,BELGAUM.

Sir,

Sub: C.Ex.-Submission ofperiodical draft Show CauseNotice proposed to be issued on M/s UltraTech

Cement Ltd., (Unit : Rajashree CementWorks), Aditya Nagar, Malkhed reg.

-o0o-

Please refer to SCN Sl.No.5/2012 dated 31.01.2012 issuedfrom C.No.V/25/15/90/2011 in respect of M/s UltraTech Cement Ltd.,

(Unit : Rajashree Cement Works), Malkhed, by the Additional

Commissioner, Central Excise, Belgaum demanding recovery/reversalof cenvat credit availed on Gases, Electrodes, Lubricants and

Hydrocloric Acid amounting to Rs.13,27,571/- during the period fromJanuary 2011 to June 2011.

In this regard, a periodical draft Show Cause Notice for thefurther period from July 2011 to December 2011 for wrong

utilization of CENVAT Credit ofRs.32,09,356/- (BED Rs.29,57,654/-,

Education Cess Rs.59,152/-, Secondary and Higher Education CessRs.29,577/- and AED of Rs.1,62,973/-) on Gases, Electrodes,Lubricants and Hydrocloric Acid is enclosed herewith.

The last date for issuance of the Show Cause Notice is08.08.2012 as the assessee filed the ER-1 for the month July 2011 on09.08.2011.

Yours faithfully,

(BHAV RAO D.MAINALLI)

DEPUTY COMMISSIONERCENTRAL EXCISE, GULBARGA.

Encl : As above.


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Central Excise Periodical Show Cause Notice in respect ofM/s UltraTech Cement Ltd., (Unit : Rajashree Cement Works),Malkhed for irregular availment of cenvat credit on Gases,Electrodes, Lubricants and HCL Rs.32,09,356/-.(July 2011 to December 2011)

gases electrodes july 11 to dec 11

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