Case Law Details
Hubergroup India Pvt Ltd Vs C.C.E. & S.T.-Daman (CESTAT Ahmedabad)
As regard, penalty imposed on Shri. Suresh Nair employee of the appellant’s Company. I find that the issue of correct calculation of Cenvat Credit on the invoice issued by the 100% EOU was always in dispute, therefore, mala fide cannot be attributed to the employee of the Company in the facts of the present case. Moreover, he is not beneficiary of any wrong doing by the Company. Accordingly, considering the peculiar facts of the present case , I find that the penalty Shri. Suresh Nair employee of the Company cannot be imposed under Rules 26 of the Central Excise Rules, 2002. Hence, penalty on Shri. Suresh Nair is not sustainable , accordingly, set aside.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
This appeal is directed against the de novo order dated 29.10.2020 passed by the Commissioner, Central GST & Central Excise, Daman Commissioner ate whereby the learned Commissioner denied the Cenvat Credit in respect of Education Cess and Secondary & Higher Education Cess under the invoice issued by the 100% EOU.
2. Shri. S. Suriyanarayanan, learned Counsel appearing on behalf of the appellant submits that the appellant had already reversed the Cenvat Credit of Education Cess prior to show cause notice, thereafter, the same was also excluded while calculating the demand of Cenvat credit, hence, the Education Cess and Secondary & Higher Education Cess was not the subject matter of the show cause notice, accordingly, the impugned order denying the Cenvat credit on Education Cess and Secondary & Higher Education Cess is beyond the scope of show cause notice, hence, the same is not sustainable. He further submits that there is substantial unutilized balance of Cenvat credit in respect of Education Cess in the Cenvat account of the appellant at the time of switching over to GST regime , hence, the credit balance was lapsed, for this reason also demand is not sustainable.
3. Shri G. Kirupanandan, learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the finding of the impugned order. He submits that there is no dispute that the appellant at the relevant time was not eligible for Cenvat Credit on Education Cess and Secondary & Higher Education Cess on the invoices issued by the 100% EOU. The only plea of the appellant is that the denial of Cenvat credit in respect of Education Cess and Secondary & Higher Education Cess is beyond the scope of show cause notice . In this regards, he submits that in the show cause notice the proposal to deny the Cenvat credit is not only in respect of basic Custom duty but also of Education Cess. Therefore, it cannot be said that in the order impugned a fresh case was made out by the learned Commissioner. Hence, the demand was rightly confirmed in the impugned order.
4. I have carefully considered the submission made by both the sides and perused the records. I find that there is no dispute on merit that the appellant was not eligible for Cenvat credit in respect of Education Cess and Secondary & Higher Education Cess paid by the 100% EOU. The appellant’s submission is that the denial of Education Cess was not subject matter of show cause notice. On perusal of the show cause notice, I find that the following proposal was made:-
13. Now, therefore M/s. Micro Inks Limted, Morkhal Init-I, Survey No. 11 & 13 Village Morkhal, Silvassa, are hereby called upon to show cause to the Commissioner of Central Excise, Customs & Service Tax, H. Q. Vapi 4th Floor Adarshdham Building, Daman Road, Vapi as to why:-
(i) The CENVAT credit amounting to Rs. 2,27,27,871/- (BED Rs. 46,65,775/-, education Cess R. 1,29,89,792/- and SHE Cess Rs. 50,72,304/-) as detailed in Annexure-A wrongly availed by them should not be demanded & recovered from them under Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 1 1A(1) of the Central Excise Act, 1944.
(ii) The interest should not be demanded & recovered from them under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11AB of Central Excise Act, 1944. On the amount demanded at Sr. No. (a) above.
(iii) Penalty shoul;d not be imposed under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1994”.
4.1 From the above proposal in the show cause notice, it can be seen that the demand of Cenvat Credit is not only in respect of basic Excise duty but also of Education Cess and Secondary & Higher Education Cess. Therefore, in this fact it cannot be said that the order denying the Cenvat credit on Education Cess and Secondary & Higher Education Cess is travelling beyond the scope of show cause notice. Hence, the demand was rightly made by the adjudicating authority.
5. As regard, the submission made by the learned Counsel that they had accumulated unutilized credit of Education Cess and Secondary and Higher Education Cess while switching over to the GST regime. I find that this fact can be examined at the time of recovery of the amount confirmed in the impugned order. Hence, I cannot give any conclusive finding on the said
6. As regard, penalty imposed on Shri. Suresh Nair employee of the appellant’s Company. I find that the issue of correct calculation of Cenvat Credit on the invoice issued by the 100% EOU was always in dispute, therefore, mala fide cannot be attributed to the employee of the Company in the facts of the present case. Moreover, he is not beneficiary of any wrong doing by the Company. Accordingly, considering the peculiar facts of the present case , I find that the penalty Shri. Suresh Nair employee of the Company cannot be imposed under Rules 26 of the Central Excise Rules, 2002. Hence, penalty on Shri. Suresh Nair is not sustainable , accordingly, set aside.
7. As a result appeal of the Company bearing No. E/10156/2021 is dismissed and appeal of Shri. Suresh Nair bearing No. E/10456/2021 is allowed.
