Case Law Details
Universal Bituminous Industries Pvt. Ltd. Vs Commr. of CGST & CX (CESTAT Kolkata)
A Show Cause Notice dated 04/04/2019 was issued demanding an amount of Rs. 67,505/- (i.e 6% of 10% of traded goods) on traded items to the tune of Rs.1,12,50,819/- during the Financial Year 2013-14 2.2. The Ld. Adjudicating Authority confirmed the demand and ordered for recovery of Rs.67,505/- under Rules 6(3) of the Cenvat Credit Rules, 2004 read with section 11A(4) of the Central Excise Act, 1944. Penalty of equal amount was also imposed. Being aggrieved, the appellant filed the appeal before the First Appellate Authority and the Ld. Commissioner (Appeals) upheld the Order of the Adjudicating Authority. Hence, the present appeal before the Tribunal.
It has been consistently observed by the Tribunal and the Superior Courts that, when separate records are maintained for taxable/exempted items, there is no occasion to reverse the proportionate Cenvat Credit. In the present case, the appellants have all along submitted that they maintained separate records for trading items and this was brought to the notice of the authorities below. Further, the appellant is filling all the statutory returns and therefore the allegation of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or of the Rules made thereunder with an intent to evade payment of duty is unwarranted. I do not find any such ingredient in the facts of the present case.
In view of the above discussion, the impugned orders are set aside, and the appeal filed by the appellant is allowed with consequential benefits, if any, as per law.
FULL TEXT OF THE CESTAT KOLKATA ORDER
Miscellaneous Application has been filed for out of turn hearing of the appeal. With the consent of both sides, the appeal itself is taken up for hearing.
2. The appellant is engaged in manufacturing of Bitumen Emulsion (Excisable) and Blown Bitumen (Non-excisabel) and trading of various items, out of which major items are Anti Corrosive, (Black Bitumen Paint), Bitumen Compound, Debonding strip, Sealing compound and Wrap Crat paper.
2.1 A Show Cause Notice dated 04/04/2019 was issued demanding an amount of Rs. 67,505/- (i.e 6% of 10% of traded goods) on traded items to the tune of Rs.1,12,50,819/- during the Financial Year 2013-14 2.2. The Ld. Adjudicating Authority confirmed the demand and ordered for recovery of Rs.67,505/- under Rules 6(3) of the Cenvat Credit Rules, 2004 read with section 11A(4) of the Central Excise Act, 1944. Penalty of equal amount was also imposed. Being aggrieved, the appellant filed the appeal before the First Appellate Authority and the Ld. Commissioner (Appeals) upheld the Order of the Adjudicating Authority. Hence, the present appeal before the Tribunal.
3. Heard both sides and perused the appeal records.
4. The Appellant’s Company filed a Chartered Accountant’s Certificate dated 25/04/2022 which is reproduced below:-
To WHOM IT MAY CONCERN
1. M/s. Universal Bituminous Industries Pvt. Ltd., CIN U24100WB2006PTC108585 having registered office at 12, B.B.D. Bag (East), Kolkata-700001 and factory at PO & Vill. Jala Dhulagory, Howrah-711302, NH6, India engaged in Trading various items, out of which major items are Anti Corrosive, (Black Bitumen Paint), Bitumen Compound, Debonding strip, Sealing compound and Wrap Crat paper falling under CETSH-27150090, CETSH-3209909, CETSH-32099090 and CETSH-27132000 of Central Excise Tariff Act 1985.
2. The Company was having Service tax Registration number AAACU8144JST001 for trading of above products.
3. The Office of the Commissioner of Central Tax (Audit) Kolkata II vide their showcause cum demand Notice no. V(1)9/Universal/CGST&CE/Gr.14/C-2/Kol/Audit-II/2018 dt. 04.04.2019 demanded Rs.67,505/-(i.e. 6% of 10% of traded goods) on traded items of valued Rs,1,12,50,819 in total during the financial year 2013-2014. As per information and submission of management and checking of Books & Records:
I hereby certify that:
(i) On the basis of books and records produced to me a summarized statement of such purchases & such sales of items traded in during the financial year 2013-14 is enclosed as Annexure-‘A’
(ii) I further certify that Central Excise paid on purchases of trading items have not been passed on to customers at the time of raising sale bills of trading items, therefore the Central Excise paid is absorbed by the Company by adding the same in their cost of purchases and no benefit of input credit was availed.
(III) I have checked the figures from their audited accounts for the financial year April 2013 to March 2014 and found that the audited accounts, which was audited by M/s. Sumanta & Co., Chartered Accountants are in agreement with the figures depicted in Annexure-A along with Exhibits 1.
(iv) A list of items traded in b the company during the financial year 2013-14 is enclosed for reference as Annexure-B with total value of purchases & sales of trading items during the year.
(V) I have checked sample invoices of purchase & sale of trading items and enclosing specimen invoices of the same for references as Annexure-C&D.
For B. N. Jha & Associates
Chartered Accountants
(FRN-331925E)
Date : 25.04.2022
Place: Kolkata
B. N. Jha
Proprietor
Membership No.051508
UDIN-22051508AHTMHN5203
4.1. I also observe that the above certificate was filed before the Ld. Commissioner (Appeals) but the same has not been taken into cognizance in the impugned order. On going through the certificate, I observe that it has been mentioned in the certificate that the company purchases various trading items from various parties by payment of Central Excise duty on prevailing rate. It has been certified that the Company maintains separate register for purchase of trading items. The summariesd statements of such purchases and sales have also been submitted vide Annexure-A of the certificate which is reproduced below:-
Showing Total Purchses & Sales of trading items for the Financial year 2013-14
(As per Note 16 of audited financial accounts for the financial year 2013-14)
4.2 It has been consistently observed by the Tribunal and the Superior Courts that, when separate records are maintained for taxable/exempted items, there is no occasion to reverse the proportionate Cenvat Credit. In the present case, the appellants have all along submitted that they maintained separate records for trading items and this was brought to the notice of the authorities below. Further, the appellant is filling all the statutory returns and therefore the allegation of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or of the Rules made thereunder with an intent to evade payment of duty is unwarranted. I do not find any such ingredient in the facts of the present case.
5. In view of the above discussion, the impugned orders are set aside, and the appeal filed by the appellant is allowed with consequential benefits, if any, as per law. Miscellaneous Application stands disposed of.
(Dictated and pronounced in the open Court.)
