Eligibility to avail CENVAT credit retained despite omission of Rule 12B; addendum to SCN not sustainable after time limit.

PER: M.M. PARTHIBAN

Pursuant to the remand directions contained in the Orders dated 11.07.2024, 18.02.2025 and 08.07.2025 passed by the Hon’ble High Court of Bombay in Central Excise Appeal No.35 of 2022, this appeal is being taken up for hearing.

2.1 Briefly stated, the facts of the case are that the Order-in-Original No. 03/MS-03/Th-I/2009 dated 31.03.2009 (for short, referred to, as ‘the impugned order’), passed by the Commissioner of Central Excise, Thane-I, both the assessee-appellant as well as the Revenue had filed appeals before the Tribunal, which were disposed of vide common Final Order No. A/85237-85240/2022 dated 28.03.2022, in the following manner:

(i) Appeal No. E/843/2009 was partly allowed by reducing the penalty imposed on Shri Prakash Jokhani from Rs.20,00,000/- to Rs.5,00,000/-;

(ii) Appeal No. E/844/2009 were also partly allowed by holding that the CENVAT credit availed after revocation of Rule 12B with effect from 9.7.2004 is in order and upheld part of the duty demand to the extent of Rs.1,21,61,218/- being fraudulently availed CENVAT credit along with interest under Section 11AB of Central Excise Act, 1944 and penalty under Rule 13 of CENVAT Credit Rules read with Section 11AC of .

(iii) Appeal No. E/852/2009 filed by Shree Nathji Textiles was allowed; and

(iv) Appeal No. E/911/2009 filed by the Revenue was dismissed as infructuous.

2.2 The said order dated 28.03.2022 of the Tribunal, disposing the Excise Appeal No. 844 of 2009 was assailed against by the appellant M/s Venus International, by way of filing the appeal before the Hon’ble High Court of Bombay, which was listed as Central Excise Appeal No.35 of 2022. The said appeal filed before the Hon’ble High Court was disposed of by quashing/ setting aside the order dated 28.03.2022 of the Tribunal by way of remand for de novo consideration. However, with regard to the other appeals being numbers E/843/2009, E/852/2009 and E/911/2009, we find that against the Final Order dated 28.03.2022 of the Tribunal, no further appeals were preferred by the appellants/Revenue before the higher appellate forum(s). Thus, with regard to those appeals, the order dated 28.03.2022 passed by the Tribunal has attained finality and cannot be further agitated. Since, the Registry, due to inadvertence, had listed those disposed of appeals along with the Appeal No. E/844/2009, the said decided appeals, in our considered view, cannot be taken up for hearing, since infructuous. Therefore, considering those appeals as infructuous, we are only taking up the appeal No. E/844 of 2009 for hearing and disposal.

3.1 The appellant M/s Venus International, having its factory located at Bhiwandi, is engaged inter alia, in the manufacture of cut and packed processed fabrics, for the purpose of export. During the disputed period, the appellant had only installed a wrapping machine at its factory premises. Since, it had not installed any other machines for converting the yarn into grey fabrics or to process further grey fabrics into dyed and printed fabrics, it had sent the duty paid yarn to various job workers for manufacture of the dyed and printed fabrics. Upon receipt of such fabrics from the job workers, the appellant had carried out further activities of cutting and packing of such fabrics in its factory, for effecting supplies to the overseas entities. The appellant had availed CENVAT credit of Central Excise duty paid on inputs, including yarn and fabrics before sending the same to job worker by following the procedures prescribed in Rule 4(5)(a) of CENVAT Credit Rules, 2004. Since the ultimate final products were meant for export, the appellant had paid central excise duty on removal of the said goods from the factory and subsequently c