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Bannari Amman Sugars Ltd. Versus Commissioner of Central Excise, Customs and Service Tax, Mysore

2017 (11) TMI 437 - CESTAT BANGALORE

CENVAT credit - manufacture of dutiable as well as exempt goods - non-maintenance of separate records - Held that: - the appellant has reversed the amount before issuance of SCN - in considering the explanation of the electricity used for sale to the Karnataka State Grid the unit produced was considered whereas it should be the value of sale and not the unit in question which should have been considered - the entire issue hinges on an error made on calculation and therefore appears to be a compu .....

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Shri P. Manickavasagan, General Manager, Bannari Amman Sugars Ltd. against the impugned order dated 19.08.2010 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has upheld the Order-in-Original and rejected both the appeals filed by the company as well as General Manager. Briefly the facts of the present case are that the appellants are registered manufacturers of Sugar, molasses, Denatured Spirit, Ethanol and Fusel Oil falling under Ch 7 and 22 and availing cenvat credit o .....

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Preventive Mysore III Dn visited the factory premises and conducted detailed verification of records. It was seen that the assessee was availing cenvat credit in respect of input services like telephones, cleaning charges, freight, bank charges, C&F, R&M etc, which was utilized in the manufacture of both excisable and non-excisable goods. As the assessee was manufacturing dutiable and/or non-excisable goods they were required to fulfill Rule 3 and Rule 6 of CCR 2004. As the assessee was .....

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thority vide Order-in-Original has confirmed various demands and also demanded interest and imposed equal penalty. Further the original authority has imposed a penalty of ₹ 50,000/- (Rupees Fifty Thousand only) on the General Manager under Rule 26 of Central Excise Rules, 2002. The adjudicating authority has also appropriated an amount of ₹ 10, 62, 521/- (Rupees Ten Lakhs Sixty Two Thousand Five Hundred and Twenty One only) already paid by the appellant. Aggrieved by the said order, .....

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order is contrary to the binding judicial precedent on the same issue. He further submitted that with reference to inputs and input services used in connection with the production of sugar, the adjudicating authority has not complied with Rule 3 read with Rule 4 and Rule 6 of Cenvat Credit Rules 2004 which categorically provided that they are eligible for cenvat credit in question. He also submitted that with reference to the input or input services which are otherwise used in the manufacture o .....

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Excise Act and he has not acted malafide. He further submits that as per the annexure to the show-cause notice which refers to the proposition of the value of non-excisable goods and the value of excisable goods as 94% and 6%. Consequently the amount of credit to be expunged has been arrived at ₹ 8,24,761/- (Rupees Eight Lakhs Twenty Four Thousand Seven Hundred and Sixty One only). He also submitted that instead of applying the same percentage for the input services credit, the Department .....

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y of production. However the Department has taken an unjustifiable stand that the percentage of split ought to be on production of the electricity consumed within the factory and that quantum wheeled outside the factory. He further submitted that in fact the Rule refers to the percentage which can be determined only based on value and not on quantity. In support of his submission, he relied upon the decision in the case of DSM Sugar Mills Vs. CCE, Meerut reported in 2014 (304) E.L.T. 582 wherein .....

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at the issue involved in the present case has been considered by the Division Bench of this Tribunal in the case of Sharad S.S.K. Ltd. Vs. CCE, Kolhapur - 2014 (304) E.L.T. 595 (Tri.-Mumbai) wherein the identical issue was involved and the Division Bench of this Tribunal has remanded the case back to the adjudicating authority for re-computation of the demand keeping in view the judgment of the Alllahabad High Court in the case of Gularia Chini Mills cited supra. 4. On the other hand the learned .....

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tice and further a sum of ₹ 10,474/- (Rupees Ten Thousand Four Hundred and Seventy Four only) and a education cess of ₹ 860/- (Rupees Eight Hundred and Sixty only) has been reversed by the appellant. Further I find that in considering the explanation of the electricity used for sale to the Karnataka State Grid the unit produced was considered whereas it should be the value of sale and not the unit in question which should have been considered. Further I also find that the entire issu .....

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(9) Grease and (10) Phosphoric acid. Of these inputs Sulphur, Caustic Soda, Boiler chemicals, Flocculants, Colour precipitate and Phosphoric acid has nothing to do with the generation of electricity and therefore, there is no need to reverse any credit taken in respect of these inputs. Similarly in the case of input services, common input services are (1) Inward Cane Transportation, (2) Telephone Services and (3) Maintenance & Repairs. Inward Cane Transportation has nothing to do with elect .....

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