SERVICE TAX

CENTRAL EXCISE

2020-TIOL-736-HC-P&H-CX

CCE Vs Welspun Corporation Ltd

CX - The assessee-company is engaged in manufacturing MS Pipes - It received order for supply of pipes from GMADA - As per the condition of purchase order, the pipes were to be supplied subject to exemption under Notification No. 12/2012-CE & if the GMADA failed to get exemption certificate under the said notification, in that case duty was to be paid on the pipes - Based on information that the assessee claimed Cenvat credit on raw material used to manufacture exempted goods, the Department issued SCNs - Replies were filed denying the allegation and stating that the goods manufactured were cleared on payment of duty and also after availing exemption under notification dated 17.3.2012 by reversing the amount @ 6% as stipulated in Rule 6(3)(1) of the CENVAT Credit Rules, 2004 - The assessee's premises were visited by officers of the preventive unit - O-i-O was passed holding that cenvat credit on inputs was wrongly availed and that the purchase order was only to facilitate availing of cenvat credit - Such O-i-O was quashed by the CESTAT - Hence the Revenue's appeal.

Held - It is undisputed that the till 20.8.2012, the nature of pipes manufactured was not determined as exempt because GMADA was not granted exemption certificate - The assessee did not maintain separate accounts and the goods cleared were on payment of duty u/r 6(3) and also dutiable goods in small ratio - Findings recorded by Tribunal that dutiable goods were cleared on 5.11.2012 was not challenged - Rule 6(2) provides no minimum ratio for the manufacture of exempted and dutiable goods - It deals with manufacturing of exempted and duty chargeable goods and in case of non-maintaining of separate accounts, then Rule 6(3) comes into operation and as per first option the manufacturer is liable to pay 6% of the value of exempted goods - The submission that from September to 4.11.2012, the assessee was only manufacturing exempted goods is based solely on presumptions and the argument falls flat in view of the finding recorded by the Tribunal that on 5.11.2012 the goods were cleared on payment of duty - Without there being any manufacturing of dutiable goods prior to 4.11.2012, the goods could not have been cleared on 5.11.2012 on payment of duty - When clearance and supply of dutiable goods is accepted and there is no denial to the fact that a purchase order existed for supply of dutiable goods, on mere assumptions the intention cannot be determined or it can be concluded that the conduct was fraudulent - Hence the Tribunal's order warrants no interference with: HC

- Revenue's appeal dismissed: PUNJAB AND HARYANA HIGH COURT

2020-TIOL-537-CESTAT-MAD

CX - For the period April 2011 to June 2017, appellant had availed cenvat credit of the service tax paid on Goods Transport Agency Services used for outward transportation of finished goods from the factory to their buyer's premises - Department was of the view that the credit is not eligible for which show cause notices were issued to the appellant - original authority confirmed the demand along with imposition of penalty and interest and in appeal, the Commissioner(A) set aside the penalties - appellant is before CESTAT.

Held: Appellant has produced sample invoice/purchase orders to contend that they have paid Central Excise duty after including freight charges; that it is also argued that since the goods have been delivered at the buyer's premises without collecting freight charges from the customer and the same is borne by the appellant, they are eligible for credit of service tax paid on the freight charges upto the buyer's premises - If the appellant has included the freight charges in the transaction value while discharging the excise duty, they would be eligible for the credit of service tax paid on freight charges incurred by them upto the buyer's premises in view of the decision in the case of Roofit Industries Ltd. - 2015-TIOL-87-SC-CX - matter is, therefore, remanded to the original authority for verification and decision accordingly after giving the appellants an opportunity of hearing: CESTAT [para 5]

- Matter remanded: CHENNAI CESTAT

2020-TIOL-535-CESTAT-DEL

CX - An objection was raised that the appellants have cleared empty bags, empty plastic drums, kachara waste etc. during the period 2013-2014 to 2016-2017, on which they were required to reverse 6% of the value of the same in terms of the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 - duty demand confirmed by lower authorities, hence appeal.

Held: Commissioner(A) distinguished the case laws relied upon by appellant on the ground that the Board Circular No. 1027/15/2016-CX. dated 25.4.2016 which covers the issue was not placed before the Tribunal - it is noted that the said Board Circular dated 25.04.2016 has been declared ultra vires in the case of Balrampur Chini Mills Ltd. Vs. Union of India - 2020-TIOL-334-HC-ALL-CX - therefore, nothing survives in the decision of the lower authorities - impugned order set aside and appeal is allowed with consequential relief: CESTAT [para 4]

- Appeal allowed: DELHI CESTAT