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2023 (7) TMI 1018 - AT - Service TaxPrinciples of natural justice - scope of SCN - no detailed grounds on the basis of which the subject credit was held not admissible - CENVAT credit - input service or not - insurance premium paid on marine cargo policy for the year 2016-17 - Rule 2(l) of Cenvat Credit Rules 2004, with effect from 01.04.2011 - HELD THAT:- What is apparent from the facts and records of the case is that the show cause notice has not given any detailed grounds on the basis of which the Department has alleged that subject credit was not admissible in the facts of the case. The show cause notice has only quoted the legal provisions, but have not brought on record any grounds based on which they have came to the conclusion that the said credit i.e. premium paid for Marine Insurance was not an admissible credit, either on the grounds of nexus to manufacturers or on the grounds that the clearance being ex-work and not FOR basis etc therefore not admissible. In the absence of any clear cut charge and the grounds given in the show cause notice, the confirmation of demand by taking recourse to various contradictory grounds, which were not even alleged explicitly and explained in the show cause notice, would not be legally tenable. It is now a settled law that the matter cannot be decided by the Original Authority or in appeal by the Appellate Authority on the grounds not covered or alleged in the show cause notice. The Delhi Bench of Tribunal in their order in the case of M/s R.K. Singh & Company Vs Commissioner of Customs and Central Excise, Bilaspur [2023 (5) TMI 721 - CESTAT NEW DELHI] have in a case related to service tax matter, after carefully going through plethora of case laws, found that the Show Cause Notice was vague and therefore set aside the order of Commissioner confirming the demand based on said SCN. Though the case is in relation to service tax, the ratio can be relied upon in the case of matters relating to customs or central excise matter as well. Further, when the SCN lacks clarity of the grounds on which demand is raised, it deprives the noticees an effective opportunity to defend his case before the authority. It is clearly against the principles of natural justice. In this case, it is apparent that no specific grounds for denying the credit has been given except for quoting the legal provisions. Thus, on the ground itself that both Order-in-Original and Order-in- Appeal have travelled beyond allegations in show cause notice, the order of the Commissioner (Appeals) is liable to be set aside without going into the merits of the case advanced by both the sides - Appeal allowed.
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