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Central Excise - Case Laws
Showing 101 to 108 of 108 Records
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2020 (3) TMI 146 - CESTAT MUMBAI
Reversal of CENVAT Credit - common input services used in the manufacture of goods, providing taxable output services and sale of CBUs - non-maintenance of separate records - Rule 6 of CENVAT Credit Rules, 2004.
Whether the appellants are eligible to CENVAT Credit on common input services described under Rule 6(5) of the CENVAT Credit Rules, 2004 and in calculating the proportionate CENVAT Credit attributable to sale of cars? - HELD THAT:- It is clear that credit on whole of Service Tax paid on taxable input services mentioned in the said sub-rule(5) shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. In the present case, the appellant had categorically submitted that as and when the aforementioned listed services were used exclusively in providing exempted services or manufacture of the exempted goods, they have reversed the credit availed on such input services. No contrary finding has been recorded by the authorities below to the said claim of the assessee. Therefore, the input services on which CENVAT Credit availed in the present case mentioned under sub-rule (5) of Rule 6 of the CENVAT Credit Rules, 2004 would be admissible, even if the same are used both for exempted services as well as taxable output services giving due effect to the non-obstante clause mentioned under the said Sub-rule.
There is fundamental fallacy in the approach and would be at the cost ofmis-interpretation of the said rules. No doubt, CENVAT Credit on input services would be allowed only when it is used in the taxable output services and/or dutiable manufactured goods; but when common input services are used in both taxable and exempted services or non-taxable services, the appropriate rule prescribed under CENVAT Credit Rules is Rule 6 of the CENVAT Credit Rules, 2004 - It prescribes a procedure/mechanism to separate the inadmissible quantum of cenvat credit used in the exempted services and/or exempted goods. To simplify the procedure further in case of input service credit, sub-rule(5) lays down a fiction whereby services mentioned under the said Rule deemed to have been used in providing only taxable service, and consequently the rigour of Sub-Rule (1),(2),(3) of CENVAT Credit Rules, 2004 has been made inapplicable. This reasoning is further supported when under the said sub-rule it is specifically laid down that when input services are exclusively used in providing exempted service, credit is inadmissible.
Whether in the formula-prescribed under Rule 6(3A) of CCR,2004, it is only the margin of value addition of the traded cars be considered or otherwise? - HELD THAT:- It is clear that the nerve chord of the dispute lies in the determination and scope of determination of the ‘value’of the traded goods for the purpose of Sub-rule (3A) of Rule 6 of CCR,2004. Under the sub-rule (3A) of Rule 6 of CENVAT Credit Rules, 2004 as was in force between 01.04.2008 and 31.03.2011, there is no mention about determination of value of ‘traded’ goods. In the said explanation, it is prescribed that the value for the traded goods be determined in accordance with Section 67 of the Finance Act, 1994.
A plain reading of Section 67 of Finance Act,1994 along with Service Tax (Determination of Value) Rules, 2006, and principles of law settled in this regard, it can easily be construed that the value of taxable services cannot include the value of the material/goods used in rendering the taxable services. Simultaneously, it is an accepted principle that the cost of all ancillary and incidental services for providing the taxable service be part of the value of the taxable service - Applying the said principles to the present case also, that is, in determining the value of non taxable service i.e. ‘trading’ of imported cars, it cannot include the value of the imported cars while apportioning the quantum of credit availed on common input services and attributable to the sale of imported cars, but the total value of the services/expenses incurred in trading of the imported cars ought to be considered as part of “value” for the purpose of the formula prescribed at sub-rule 3A(c) (iii) for the period 01.4.2008 to 31.3.2011.
To apportion the quantum of CENVAT Credit availed on various common input services and attributable to sale of the imported Cars as per the formula prescribed at Rule 6(3A)(c )(iii) of CCR, 2004, for the period 01.4.2008 to 31.3.2011 the matter needs to be remanded to the adjudicating authority, who would determine the said amount by applying the principles discussed above and other factors for the normal period of limitation.
The Appeals filed by the assessee are disposed of by way of remand to the adjudicating authority.
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2020 (3) TMI 81 - GUJARAT HIGH COURT
CENVAT credit - inputs used in the provision of exempted goods as well as traded goods - non-maintenance of separate account as required under Rule 6(2) of the CCR - option available under Rule 6(3) of the CCR not followed - HELD THAT:- The issue decided in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-II VERSUS MAIZE PRODUCTS [2008 (8) TMI 365 - HIGH COURT OF GUJARAT AT AHMEDABAD] where it was held that In the facts and circumstances of the case, it is apparent that the entire controversy has been decided by the Tribunal by merely remitting the matter back to the Adjudicating Authority to re-determine the credit in accordance with law. If any reversal has been made by the respondent-assessee, the same is subject to verification and adjustment if ultimately any further amount is found reversible.
Appeal dismissed.
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2020 (3) TMI 80 - CESTAT MUMBAI
Vires of Rule 8(3A) of Central Excise Rules, 2002 - Default in discharging duty beyond 30 days from the due date - sub rule 8 of Central Excise Rule, 2002 - whether utilization of CENVAT credit during the period of default in discharging monthly duty liability is irregular and in breach of Rule 8(3A) of Central Excise Rules,2002?
HELD THAT:- The issue is no more res-integra and considered by the Hon’ble Gujarat High Court in the case of Indsur Global Ltd vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] - It has been held that during the default period payment of duty by utilization of CENVAT credit account is not irregular and consequently the said portion of the Rule 8(3A) of Central Excise Rules,2002 which debars utilization, has been held as ultra vires.
Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 79 - CESTAT NEW DELHI
CENVAT credit - input services, which were being utilized by the appellant in respect of manufacturing of their final product as also other trading activities - non-maintenance of separate records - liability to discharge 5%/6% of the value of the such traded goods - extended period of limitation - penalty.
HELD THAT:- Admittedly the appellant was recording the entire activity in their balance sheet which is a proper document. As such according to the settled law, it cannot be said that the appellant suppressed anything with a mala fide intention - Apart from that, we also agree with the Learned advocate that there was confusion in the field and as per various decisions, trading activity was not considered to be an exempted service prior to April 2011. After 2012, with the introduction of negative list regime, the law was not very clear and in the absence of any specific evidence attributing to the mala fide intent of the appellant, it has to be held that there can be a bona fide belief on the part of the assessee, especially when the entire activities are being reflected in the Books of accounts - As such we hold that the demand for period beyond the normal period of limitation would be barred.
The matter to the original adjudicating authority for re-quantification of the demand falling within the period of limitation - As regards the normal period, appellant is entitled to contest the same before the authorities below based upon the dates when the normal period was changed as also on the basis of precedent decision - Further, the appellant’s plea of reversal of proportionate credit would also be re-considered by the lower authorities.
Penalty - HELD THAT:- There was no mala fide on the part of the appellant, the same would not justify imposition of penalty upon them.
Appeal allowed by way of remand.
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2020 (3) TMI 74 - CESTAT CHENNAI
CENVAT credit - input services - Group Medical Insurance Policy for employees and their dependants - HELD THAT:- The issue has been laid to rest by the Hon’ble High Court of Judicature at Madras in the case of M/S. GANESAN BUILDERS LTD. VERSUS THE COMMISSIONER OF SERVICE TAX [2018 (10) TMI 269 - MADRAS HIGH COURT] where the credit was allowed.
The denial of CENVAT Credit on Group Medical Insurance Policy on the dependants of employees is bad - Appeal allowed - decided in favor of appellant.
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2020 (3) TMI 16 - CESTAT AHMEDABAD
CENVAT credit - duty paying invoices - Credit in respect of input on 10 Bill of Entries which were disputed by the Audit party - proper verification not carried out - principles of natural justice - Penalty imposed on Shri Hari Nair - HELD THAT:- The appellant for each and every objections whereby the Cenvat Credit was disallowed, given detailed explanation in a chart along with relevant documents submitted - the appellant have given proper justification for the discrepancies alleged by the revenue. They have also co-related the Bill of Entry with other documents. With this co-relation it has been established that against the Bill of Entry the appellant have received the input in their factory and the same have been used. Therefore, the Cenvat Credit should not have been disallowed only for the procedural/clerical lapse.
It is the submission of the appellant that the co-relation and the supporting documents submitted by the appellant have not been verified by the adjudicating authority - it is found that even though some procedural lapse has occurred but since the receipt of inputs under the cover of Bill of Entry and use of input in the manufacture of final product was neither alleged nor established by the revenue, the Cenvat credit cannot be denied.
Penalty imposed on Shri Hari Nair - HELD THAT:- It is evident from the record that the act of alleged wrong availment of credit has happened in the year 2008-09 whereas Shri Hari Nair has joined the appellant company only in 2011. Therefore, it cannot be said that he has abated in the act of alleged wrong availment of credit by the company. Moreover, the credit was disallowed only for some discrepancy in the documents which cannot be attributed to serious offence of evasion of duty with mala fide intention, therefore, in the facts and circumstances of the case Shri Hari Nair was wrongly imposed with penalty under Rule 26(2) of the Central Excise Rules, 2002.
The adjudicating authority since not verified all the co-relation given by the appellant, the matter needs to be reconsidered by the adjudicating authority, the other issue of time bar is also kept open - Appeal allowed by way of remand.
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2020 (3) TMI 15 - CESTAT KOLKATA
Clandestine removal - suppression of production - MS Round - MS Sponge Iron - demand based on various documents recovered and various statements - Section 9D of CEA Act - HELD THAT:- The search has taken place at the premises of the appellant on 20.08.2013 and during the course of search, the department has found some loose computer printouts and hand written loose sheets showing data in respect of production and clearance of MS Round (TMT Bar) and Sponge Iron for the period from December, 2012 to July, 2013. Thereafter, the department recorded the statements of Shri Basant Kumar Sahu, V.P. (Commercial) of the appellant under Section 14 of the Act. The case of the department is mainly based on the documents recovered, (the authenticity of the same has been disputed by the appellant) and the statement of Shri Basant Kumar Sahu, which has also been disputed by the appellant.
The statement recorded under Section 14 of the Central Excise Act cannot be relied upon as an evidence unless the learned Adjudicating Authority follow the procedure prescribed under Section 9D of the Act - In the present case, admittedly no process has been followed.
The private documents recovered at the premises remains unrebutted by the department. Also, the allegation of clandestine manufacture and removal in the present case is based on the (a) computer generated sheets and (b) loose papers which cannot be relied upon as evidence, inasmuch there is no indication in the orders passed by the authorities below that the appellant was maintaining computerised records of their production and clearance of goods and whether any other computerised sheets were traced out in the files withdrawn. There is no compliance of Section 36B of the Act.
Merely deposit of money at the time of investigation would not amount to acceptance of allegations of clandestine manufacture and removal as alleged by the department - It is well settled law that, payment of money at the time of investigation would be treated as a deposit under protest.
Further, the burden to prove allegation of clandestine manufacture and removal is heavily on the department and has to be discharged by producing clinching evidence on record, which has not been discharged by the department in the present case - appeal allowed - decided in favor of appellant.
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2020 (3) TMI 14 - CESTAT KOLKATA
CENVAT credit - input/capital goods/input services - railway construction materials and wagons which were used to main railway tracks and for transportation of raw materials, finished goods within the factory premises - HELD THAT:- The identical issue pertaining to the railway track came before the Tribunal in the case of M/S. TATA STEEL LTD., M/S. SAIL, DURGAPUR STEEL PLANT AND COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS CCE, JAMSHEDPUR, CCE, BOLPUR AND M/S. SAIL, DURGAPUR STEEL PLANT [2016 (1) TMI 1059 - CESTAT KOLKATA] and relying upon the judgement of the Hon’ble Supreme Court in the case of M/S JAYASWAL NECO LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [2015 (4) TMI 569 - SUPREME COURT], whereby the cenvat credit was allowed on railway track material used for handling raw materials, process goods.
Credit allowed - appeal allowed - decided in favor of appellant.
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