Case Law Details
Super Smelters Limited Vs Commissioner of Central Excise (CESTAT Kolkata)
Introduction: In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Kolkata has quashed an Excise Duty demand imposed on Super Smelters Limited. The demand pertained to the alleged non-maintenance of separate accounts for input services utilized in trading activities declared as exempted services under the Cenvat Credit Rules, 2004. This article delves into the details of the case, the arguments presented, and the CESTAT’s verdict.
Detailed Analysis:
1. Background: Super Smelters Limited, a manufacturer of sponge iron, M.S. Billets, and other products, availed Cenvat credit on both inputs and input services used in manufacturing. These input services included Survey Fees, Professional charges, Sampling & Analysis Charges, Commission Charges, and Security Charges. During a specific period from April 2011 to February 2015, the company removed certain quantities of inputs to sister units and sold a portion of unwanted inputs, including undersized coal. To comply with the rules, they reversed the Cenvat credit on these removed inputs.
2. Allegation and Demand: The authorities alleged that, in the guise of input removal, Super Smelters Limited was engaged in providing services, specifically ‘Trading of Goods,’ which qualified as an exempted service. They argued that the company failed to maintain separate accounts for credit attributable to taxable and exempted trading services under Rule 6(1) of the Cenvat Credit Rules, 2004. Consequently, the authorities issued a show-cause notice in April 2015, leading to an adjudication that confirmed the demand under Rule 6(3) of the Cenvat Credit Rules, 2004.
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