Case Law Details
Spac Taopica Products (India) Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that the demand for paying an amount of 5% /10% /6% on the value of exempted clearances unwarranted when the appellant has reversed the proportionate credit of inputs used in manufacture of exempted products.
Facts- The appellants are engaged in manufacture of Tapioca Starch (Native Starch and Modified Starch respectively falling under Chapter 1108 and 3505 of CETA 1985). Based on the intelligence gathered and on a reasonable belief that the appellant has not paid the amount equivalent to 5% / 10% / 6% of value of the exempted final goods on the manufacture and clearance of exempted goods while using common cenvatable inputs, the officers of the Preventive Unit visited the appellant’s unit.
Show cause notice was issued to the appellant proposing to demand the amount equivalent to 5% / 10% / 6% value of exempted goods for the disputed period as the appellant had not maintained separate accounts in respect of common inputs used in the manufacture of dutiable and exempted products. After due process of law, the original authority confirmed the demand, interest and imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal.
Conclusion- Hon’ble Telangana High Court, in the case of Tiara Advertizing vs Union of India, has held that rule 6 (3) does not contemplate that the service tax authorities can choose one of the options on behalf of the service provider.
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