2019-TIOL-617-CESTAT-KOL

ST - The assessee-company manufactures goods such as Balley Bridge, Bridge Girder, Bunk House & Railway Wagon - During the relevant period, the Revenue issued SCNs alleging wrong availment of Cenvat credit on GTA service - The reasoning given was that credit was availed based on invalid bill issued by the transporter - On adjudication, the credit was denied and demands were raised for recovery of the same, with interest - Penalty u/s 11AC was imposed as well - On appeal, the Commr.(A) sustained such findings - Hence the present appeal.

Held: The O-i-O alleges that the assessee resorted to fraudulent means to mutate documents so as to avail ineligible Cenvat credit - However, such an allegation nowhere features in the SCN issued to the assessee - Hence the adjudicating authority traversed beyond the scope of the SCN, as the ground alleged in the SCN is different from the grounds on which the demand was raised - As the O-i-O itself is unsustainable, the O-i-A upholding it becomes unsustainable as well - Hence the O-i-O as well as the O-i-A are quashed: CESTAT (Para 5,9)

- Assessee's appeal allowed: KOLKATA CESTAT

2019-TIOL-616-CESTAT-BANG

ST - Assessee is engaged in supply of manpower services and they have been issued SCNs for non-payment/delayed payment of Service Tax for period 10/2002 to 2/2009 - It is the case of department that assessee has been regularly defaulting on payment of Service Tax - The assessee have submitted that there was delay in payment of Service Tax; the delay occurred as they were facing financial difficulties and had to pay the salary to their employees first; there was no intention to evade payment of Service Tax; they were in LTU and have been paying huge amount of Service Tax to the Government - Delay in payment of Service Tax by itself would not reveal intent to evade payment of duty and for the reason that there has been a delay in payment of Service Tax, fraud, suppression and collusion cannot be alleged - The statute has provided for payment of interest for delayed payment of Service Tax - It means that statute has provided for cases/situations where there is a possibility of payment of Service Tax - Moreover, there is a penalty under Section 76 for delayed payment - Therefore, invoking of Section 78 for delayed payment in itself is not acceptable - The penalty under Section 78 for period 10/2002 to 8/2007 was either not proposed or dropped by Commissioner and for the period 5/2008 to 2/2009, penalty under Section 78 has not been proposed at all in the SCN - This being the situation, proposal and confirmation of penalty under Section 78 during period 9/2007 to 10/2007 alone defies logic as there was no change in the circumstances or the procedure adopted by assessee - Penalty under Section 78 is not imposable - To that extent, the assessee succeeds - However, due to continuous default in payment of Service Tax, assessee is liable to pay penalty imposed under Section 76: CESTAT

- Appeals partly allowed: BANGALORE CESTAT

2019-TIOL-615-CESTAT-BANG

CX - The asssessee is engaged in manufacture of 'Non Destructive Testing' (NDT) machines and trading activity - As per assessee, clearance of excisable goods excluding value of traded goods was less than one crore fifty lakhs during period 2014-15; assessee was claiming small scale exemption under Notfn 08/2003-CE - The premises of assessee was visited by revenue who seized various records under the impression that assessee is engaged in manufacture and removal of excisable goods and the total turnover of excisable goods was in excess of admissible exemption limit of one crore fifty lakhs as prescribed under Notfn 08/2003-CE and they had neither obtained central excise registration nor paid the appropriate central excise duty as per the provisions of CER, 2002 - The Commissioner (A) has not given any findings on the merits of the case after observing that merit is not in dispute whereas assessee has produced the certificate of CA certifying the trading of goods by assessee during the period 2014-15 along with copies of invoices but same has not been considered by both the authorities - Therefore, case remanded back to the original authority with a direction to consider all the documents and the certificate of the Chartered Accountant which the assessee may produce in support of their claim of trading of goods and thereafter pass a fresh reasoned order: CESTAT

- Matter remanded: BANGALORE CESTAT

2019-TIOL-614-CESTAT-KOL

CX - The appellant manufactures Alumimium wire rod & Aluminium alloy wire rod, used for drawing Aluminium/Aluminium alloy wires for further manufacture of conductors - Such conductors are mainly supplied to State Electricity Boards/Power Grid corporations, vide open tender - The appellant manufactures wire rods on its own account as well as through job work - During the relevant period, the adjudicating authority alleged clandestine removal of goods - Hence duty demands were raised with interest & penalty u/s 11AC - Personal penalty was imposed on the director of the appellant company under Rule 25 of the CER 2002.

Held: Almost all removals were made to the appellant's group companies, all of which were simultaneously searched - Receipt of converted wire rods by the group companies was never disputed - Search of group companies by DGCEI did not reveal any excess stock of Wire Rods - The appellant submitted CA certificates stating that group companies received back commensurate quantity of Wire Rods from the appellant company against ingots supplied under job work challans - There is nothing to suggest that the appellant clandestinely cleared value added Aluminium/Alloy Wire Rod manufactured from out of Aluminium Ingots to any outside party - There is no allegation of any other Conducter manufacturer being present in the vicinity to whom such huge quantities of wire rods could be sold without payment of duty - It does not place on record any evidence of unaccounted procurement of Aluminium ingots or other inputs & the source from which the appellant could procure such unaccounted ingots for use in clandestine manufacture of Wire Rods - There is no reference to any buyer who may have purchased the allegedly clandestinely removed wire rods - There is nothing on record showing unaccounted receipt of sale proceeds by the appellant from any source or to corroborate clandestine manufacture of such huge quantity of Aluminium Wire rods by the appellant - Also considering the burning loss and generation of dross, the appellant only had 1.5 MT of carried over stock/scrap - It is also on record that the assessee did not purchase any ingot/scrap on its own account during such period - Hence with merely 1.5 MT of stock of own purchases of Aluminium Scrap, the appellant could not have manufactured 493.404 MT of Wire Rods, alleged to have been removed without payment of duty , more so without evidence showing that the appellant purchased Aluminium ingot from any other source - Hence the allegations of the adjudicating authority lack substance - The orders merit being set aside: CESTAT (Para 2,11,12)

- Appeals allowed: KOLKATA CESTAT