HCL Infosystems Ltd Vs Commissioner of GST & CCE

CX - Assessee is manufacturer of computer systems and availing the facility of Cenvat Credit of duty paid on inputs, capital goods and services tax paid on input services - The period involved is after 01.04.2008 - The issue involved in both the appeals is whether the assessee is eligible to avail the Cenvat Credit of service tax paid on the GTA service received by them for outward transportation of final products from the factory gate up to the premises of the buyer when the sales are on FOR basis - The said issue has been decided in the case of M/s. Ultratech Cement Ltd. 2018-TIOL-42 SC-CX , wherein it has been held that credit is eligible up to 01.04.2008 and after such date, the assessee is not eligible for credit - Though the assessee has put forward lengthy arguments in the written submissions, same does not find any merit in view of the decision of Apex Court in the case cited - Following the ratio of said decision, it is held that assessee is not eligible for credit - However, taking into consideration that the issue was under litigation and was in favour of assessee at the Tribunal level as also decided by various High Courts and got settled only by the decision of Apex Court, penalty imposed is unwarranted and same is set aside - In the result, impugned order is modified to the extent of setting aside only the penalties, without disturbing the duty demand or interest thereon: CESTAT

- Appeal partly allowed: CHENNAI CESTAT

  2018-TIOL-2809-CESTAT-CHD

LG Balakrishnan And Brothers Ltd Vs CCE

CX - Assessee is registered with Department and manufacture Roller chains and Auto parts - Pursuant to audit, certain objections were raised by audit team - After agreeing with the audit objections, assessee paid the amount of duty, service tax, interest and applicable penalty and intimated the Department accordingly - Later, assessee filed an application for refund on the ground that they did not receive any audit note nor any SCN indicating the liability of duty - It is clear from adjudication order that the calculation sheet for duty, interest was prepared with assessee's help and they were duly informed - The adjudication authority while allowing the benefit under provisions of Sections 11A(5), (6) & (7) ibid and Section 73(4A) ibid, has considered certain condition like the true and complete figures of transaction available in records and acceptance of chargeable tax by assessee and its payment along with interest and applicable penalty by concerned assessee - These provisions are clearly meant to shorten the further proceedings both for the assessee and Department - The assessee gets the benefit of reduced penalty from 100% to just 1% penalty for each month of default and the Department accomplishes prompt compliance without resorting to adjudication proceedings beginning with SCN - Requirements of Sections 11A(5), (6) & (7) ibid and Section 73(4A) ibid having been met by assessee in order to avail the benefit of lower penalty, no SCN was issued as mandated under said Sections and the proceedings were correctly concluded: CESTAT

- Appeal dismissed: CHANDIGARH CESTAT

  2018-TIOL-2808-CESTAT-ALL

Simbhaoli Sugar Ltd Vs CCE

CX - Assessee is engaged in manufacture of sugar and molasses and were availing the benefit of Cenvat credit of duty paid on inputs, capital goods as also input services - During manufacture of sugar bio-manure arises as a byproduct, which is being sold by assessee against consideration - As bio-manure is chargeable to nil rate of duty, Revenue entertained a view that they are required to pay an amount of 6% of value of the same in terms of provisions of Rule 6(3)(1) of CCR, 2004, inasmuch as they have availed Cenvat credit in respect of common inputs and input services - Revenue has strongly relied upon the explanation to Rule 6(1) - However, it is seen that Rule 6(1) stand amended so as to include the inputs used in relation to the manufacture of exempted goods - As such, it can be seen that the same relates to manufacture and it can be safely concluded that there has to be a manufacturing activity for invoking Rule 6(3) - The Supreme Court in case of D.S.C.L Sugar Ltd. 2015-TIOL-240-SC-CX has held that bagasse being an agricultural waste or residue, there could be no manufacturing activity - Similarly bio manure is nothing but a byproduct which necessarily arises during the course of manufacture of the goods and it cannot be said that the same was a manufactured product - If the same was not manufactured, same cannot be held to be excisable, in which case the amendment carried out would not apply - Otherwise also, assessee have clarified that no inputs are used prior to emergence of bagasse and spent waste and the molasses which are further used for the manufacture of rectified spirit - If that be so there are no common inputs used in manufacture of bio manure - In any case, Revenue has itself treated the bio manure as a byproduct which arises during the course of manufacture of sugar and molasses - If that be so the provisions of Rule 6(3) would not apply as held by Bombay High Court in case of Rallies India 2015-TIOL-630-HC-MUM-CX vide which the Larger Bench decision of Tribunal was set aside: CESTAT

- Appeal allowed: ALLAHABAD CESTAT