Case Law Details
Commissioner of Central Excise And Service Tax Vs Indian Oil Corporation Ltd. (Calcutta High Court)
Calcutta High Court held that by availing only 85% of credit on common input service, obligation under rule 6(2) of Cenvat Credit Rules, 2004 (CCR) is fulfilled.
Facts- The moot question involved in these appeals is whether the respondent has fulfilled his obligation under Rule 6(2) of the Cenvat Credit Rules, 2004 by taking only 85% of the credit on the common input service. The revenue had issued show cause notice alleging that the assessee has cleared final products manufactured by them without payment of duty but failed to pay an amount equivalent to 10% of the price of final products which were manufactured by them. It was alleged that the respondent/assessee did not maintain separate accounts for receipt, consumption and inventory of input and input services meant for use in the manufacture of dutiable and exempted goods or services and proportionate Cenvat Credit on such inputs has not been expunged for the period from March, 2007 to December, 2007 and the subject goods were cleared at the NIL rate of duty but exemption notification under which goods have been removed were not mentioned in the ER 1 returns submitted by the assessee.
Notably, in the absence of any other evidence, the Tribunal examined the Chartered Accountant’s certificate produced by the assessee and held that the assessee had sufficiently met the requirements of maintenance of separate accounts under Rule 6(2) and, therefore, upheld the order passed by the Commissioner who had dropped all the demands raised against the assessee.
Conclusion- In our opinion, the Department having issued such communication, it goes without saying that they have now embarked upon an exercise to examine the contents of the Chartered Accountant’s certificate. This would indirectly mean that the contest which was made before the Tribunal with regard to the Chartered Accountant’s certificate does not any longer survive and it is only the contents thereof, sufficiency or insufficiency of the material contained in the certificate which is now being pursued by the Department. Therefore, technically we would not be wrong in observing that the revenue has accepted that portion of the order passed by the Tribunal which answered question no.(c).
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