$~6 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision : 17.07.2018 + CEAC 30/2017 ICON INDUSTRIES, UNITS-I & II ..... Petitioner Through Mr. Shashwat Bajpai and Mr. Sankalp A. Sharma, Advs.

versus COMMISSIONER OF CENTRAL EXCISE -1 NEW DELHI ..... Respondent Through Mr. Harpreet Singh, Sr. Standing Counsel with Mr. Suresh Chaudhary, Advs.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA HON'BLE MR. JUSTICE S. RAVINDRA BHAT (ORAL)

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Admit.

Mr. Harpreet Singh, Adv. accepts notice.

With the consent of the learned counsel for the parties, the appeal was heard finally.

The question of law that arises in this case is:-

“whether in the given circumstances of the case, the appellant/assessee was entitled to Cenvat credit in respect of the countervailing duty paid inputs.”

For the purpose of this, it would be sufficient to notice that Anti Evasion Branch of Central Excise investigated with respect to the manufacture and sale of the appellant’s products; search was conducted in its premises on 07.02.2003 in which various articles and many other documents were seized. Later, on 18.02.2003, the assessee secured registration under the Central Excise Act and ‘

deposited 50 lakhs towards advance duty. The show cause notice was issued on 08.04.2005 with respect to the seizure of goods. Later, the statement of its proprietor Mr. Amit Madan had been recorded on a number of dates of hearings. Given all these circumstances, the appellant had approached the Customs and Excise Settlement Commission which rejected its request for resolution of the case observing that its manufacturing units have not been registered and were not filing returns. The appellant unsuccessfully approached this Court aggrieved by the order of the Settlement Commission.

On 17.10.2012, adjudicating authority (Commissioner) passed the final order. In that order, inter alia, the Commissioner rejected the assessee’s submissions with respect to the admissibility of Cenvat credit upon the input i.e. amount of countervailing duty paid by the importer M/s Marvellous Impex (another proprietorship concern of Mr. Amit Madan). The findings of the Commissioner on this aspect are as follows:

“66. Now what differentiates the cases relied upon by the noticee from the present case is the fact that the assessee in those cases were registered with respective revenue authorities and had failed to obtain a prior permission required under the law whereas in the present case neither the supplier of imported raw material (M/s Marvellous Impex) nor the manufacturer (i.e. the noticee) were registered at the relevant time. I also find that the clearances of finished goods were made in clandestine manner without the accompanying invoices prescribed under the rules and without keeping any account as prescribed under the central excise law.

67. I observe that all these conditions starting from the basic requirement of getting registered with the central excise authorities, maintenance of the records and clearance on payment of appropriate central excise duty are not merely procedural but are of the kind that the Apex Court in the above referred case has described as "of substantive nature as likely to facilitate commission of fraud and introduce administrative inconveniences.

68. Thus in due deference to the observations made in judgement of the -Apex Court cited above, the contention of the noticee cannot be accepted and hence the credit of duty paid on the imported raw material cannot be given to the noticee for the reasons as above.”

The assessee appealed to the Tribunal, which by its impugned order rejected its contention with respect to the admissibility of Cenvat credit. The reasoning of the Tribunal inter alia is as follows :

“7. The appellant relied on certain case laws. We find that none of the case deals with the situation now under consideration. In the case of Formica India Division Vs. CCE 1995 (77) ELT 511 (SC), the Hon'ble Supreme Court was examining the appellant's en