Case Law Details
Posco Poggenamp Electrical Steel Pvt Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
CESTAT Ahmedabad held that duty was paid on the clearance value on which demand was raised. Accordingly, as duty was paid demand under rule 6(3)(i) of Cenvat Credit Rules, 2004 unsustainable.
Facts- The case of the department is that during audit of records of appellant (Audit Report No.576/19-20 dated 28.02 2020), it was observed that the appellant is engaged in manufacturing of excisable goods i.e. Parts of Transformer” and “CRGO Core Lamination” and also engaged in the trading of goods which is a declared service in terms of Section 66E(a) of the Finance Act, 1994. Further, trading of goods is one of the services is listed in the Negative list of service under Section 66(D)(e) of the Finance Act, 1994 and therefore, service tax is not eligible on trading of goods in terms of Section 66 B of the Act. It was also observed that appellant have availed the Cenvat credit of service tax paid on the services viz. Chartered Accountant, GTA, Manpower Recruitment etc which were used in the manufacturing of dutiable goods as well as trading activity. Since the trading is an exempted service and Cenvat credit of all these services were availed by the appellant and the same was utilized for discharging the central excise duty liability of the manufactured goods is the violation of Rule 6 of the Cenvat Credit Rules, 2004. Accordinly the appellant is liable to pay 6% / 7% of the value of exempted goods i.e. trading in the present case, in terms of Rule 6(3)(i) of Cenvat Credit Rules, 2004.
Conclusion- Held that it is crystal clear that on the clearance value on which the demand was raised, the appellant have admittedly paid the duty except for the period 19.04.20 16 to 23.01.2017 wherein the appellant have not availed Cenvat credit. Thus, the appellant have paid the excise duty/ Cenvat on the clearances on which the demand was raised in the present case. With these details, there was no difficulty to the Adjudicating Authority as well as the appellate authority to arrive at the conclusion that there is no case of demand under Rule 6(3)(i) of Cenvat Credit Rules, 2004. However, both the lower authorities on flimsy ground that details were not given by the appellant, confirmed the demand. Therefore, I do not agree with both the authorities. The Revenue is at liberty to verify calculation of payment and or reversal of Cenvat in respect of inputs cleared as such and clearances on which no Cenvat credit was availed.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
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