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2023-TIOL-1003-CESTAT-AHM
Zydus Lifesciences Ltd Vs CCE
Cus - The issue involved is, whether payment of duty by 100% EOU can be paid from cenvat credit account while debonding 100% EOU unit - At the time of de-bonding, if there is any short fall of duty payment subsequent to de-bonding of unit, custom/excise department is empowered to issue a SCN for which no approval of development commissioner is required for issuance of SCN - Regarding the submission of appellant that since the amount is paid from cenvat credit is otherwise refundable under Section 142 of CGST Act, 2017, there is proper mechanism for filing refund claim and considering the merit of each case the sanctioning authority of GST department shall dispose of refund, therefore, at this preliminary stage it cannot be decided that since the appellant can claim the refund of cenvat credit, the entire case is revenue neutral - However, appellant have liberty to approach GST authority to claim refund, if any, in accordance with law - Appellant has utilized cenvat credit for payment of Additional duty of custom at the time of de-bonding of 100% EOU - In normal course when any goods are imported the additional duty of custom is paid in cash therefore there is no reason to avoid payment of additional custom duty of raw material as a custom duty in cash - The cenvat credit can be utilized for payment of excise duty either on finished goods or on indigenous inputs - However, in case of imported inputs the additional duty of custom has to be paid in cash and not by debiting cenvat credit account in terms of Rule 3 of CCR, 2004 - In case of imported inputs/raw material, additional duty of custom shall be paid from cash and not from cenvat credit - In case of duty liability on indigenous raw material and finished goods, since the duty is of excise the same shall be paid from cenvat account - In case of payment of duty in cash as against debit in cenvat account already made, appellant is at liberty to recredit the same in their cenvat account and approach the department for refund in cash in terms of Section 142 of CGST Act and same shall be disposed of in accordance with law - Matter needs to be re-considered by Adjudicating Authority - Impugned order is set aside: CESTAT
- Matter remanded: AHMEDABAD CESTAT
2023-TIOL-1002-CESTAT-DEL
CCGST & CE Vs Bonafide Arts Pvt Ltd
CX - The Assessee is a manufacturer of MS billets falling under Chapter Heading 720 71920 of the First Schedule of the Central Excise Tariff Act, 1985 - It avails CENVAT credit on the inputs which it receives and uses in the manufacture of the final products - Based on an investigation report of the Directorate General of Central Excise Intelligence dated 17.07.2015 and an alert notice dated 05.1.2016, officers of the Central Excise Commissionerate, Jaipur initiated enquiries from the second stage dealer of Jaipur M/s Shree Mahalaxmi Scrap Trading Company who had supplied scrap to the Assessee to ascertain the names of the first stage dealers from whom M/s Shree Mahalaxmi purchased the goods and also the names of the manufacturers whose goods were supplied - Statements were recorded and after completing the investigation, a show cause notice dated 13.02.2018 was issued to the Assessee proposing to recover CENVAT credit of Rs. 89,91,247/- under rule 14 of the CENVAT Credit Rules, 2004 CCR read with section 11A (4) of the Central Excise Act, 1944 the Act - Interest was also proposed to be recovered under rule 14 of CCR read with section 11 AA of the Act - Penalty was proposed to be imposed under rule 15 (2) of CCR read with section 11AC of the Act - After considering the written submissions by the Assessee and the submissions made during personal hearing, the Additional Commissioner passed O-I-O disallowing the CENVAT Credit and ordering its recovery along with interest as proposed in the show cause notice - He also imposed penalty of Rs. 89,91,247/- upon the Assessee under rule 15 (2) of CCR read with section 11AC - He further imposed a penalty of Rs. 1 lakh each upon the noticees nos. 2 to 8 of the show cause notice - On appeal, the Commissioner (Appeals), by the impugned order, set aside the O-I-O - Hence the present appeal.
Held - The Show Cause Notice is based on 9 Relied Upon Documents - For any document to be used as evidence in any proceedings it must be relevant and admissible. As per section 9D, statements made before the Central Excise Officers will be relevant if procedure prescribed in it is followed - It has been held in a number of decisions including Jindal Drugs that the procedure under section 9D is mandatory - For this reason alone, all the statements become irrelevant and, therefore, also inadmissible to the present proceedings - The Order-in-Appeal does not warrant any interference with: CESTAT
+ The cross-examination of one of the persons Manoj Vijay was allowed in which he asserted that the goods were transported not to his premises but were transported directly to premises of the respondent. Once we ignore all these statements, the only evidence left are the letter of the Additional Director, DGCEI indicating that intelligence was received, the letter of the Additional Commissioner, Dhanbad, which is an alert notice indicating that Ganpati Enterprises was found to be non-existent and the letter of superintendent of Central Excise, Burdwan indicating that M/s Vedic Chemicals Pvt Ltd is also closed;
+ The buyer of scrap or input is not required to launch an investigation to find out if his supplier had, in turn, purchased the goods properly from his suppliers (first stage dealer) and that first stage dealer had, in turn, purchased the goods from the manufacturer and if that manufacturer had, during the relevant time, manufactured the goods and also paid excise duty. All that is required is for the user is to obtain the goods under the cover of proper invoices which the respondent did;
+ It is true that if the manufacturer had not manufactured the goods they could not have been supplied by the manufacturer to the first stage dealer and further to the second stage dealer and to the respondent. It certainly creates enough reasons to doubt but the issue can only be decided through a thorough investigation. If the assessee says that it had received the goods, the question is, if the second stage dealer had supplied the goods. In this case, he says he had supplied the goods. The next question is to enquire if the first stage dealer had sold the goods to the second stage dealer. The third stage of investigation is ascertaining if the manufacturer had supplied to the goods to the first stage dealer. Examining the records of each of this individual companies/ firms and recording their statements can only reveal the complete truth. If such an investigation requires statements to be recorded and if revenue proposes to use such statements in the proceedings against the assessee the procedure prescribed under the section 9D has to be followed. Otherwise, such statements are not only NOT admissible but are not even relevant to the proceedings. In this case, all the statements are rendered irrelevant as the Adjudicating Authority had not followed the procedure prescribed under section 9D.
- Appeal dismissed: DELHI CESTAT
2023-TIOL-1001-CESTAT-HYD
Hindustan Shipyard Ltd Vs CCT
ST - The Assessee is engaged in the manufacture and repair of ships - On the ground that, certain activities undertaken by the Assessee during the period from 2006-07 to 2010-11 amounted to providing of " business auxiliary services " (BAS) and " management, maintenance and repair services " (MMRS) and also taking the view that the Assessee was liable to pay service tax in respect of " consulting engineer services " (CES) received from abroad, as the receiver of service, demand for service tax of Rs.88,48,718/- has been confirmed with interest and penalties under various sections of Finance Act, 1994 have also been imposed. Held - The issue of service tax demanded on the activity of manufacture and repair of ships, stands covered by several decisions of the CESTAT - Moreover, in this case the Appellants have proved their eligibility for the benefit of Notification No.12/2003, in view of the discussion earlier - As far as the demand towards Consulting Engineer Service is concerned, the amount was paid by the amount was paid by the Assessee after 18.04.2006 - The Assessee claimed to have received the service prior to 18.04.2006, and therefore, it was canvassed that the Assessee was not liable to pay service tax at all since the taxable event occurred in the year 2005-06 - The Adjudicating Authority recorded a findings that the amount was paid in 2006-07, but there is no finding that the services were also received in 2006-07 - In absence of such finding and in view of the Assessee's submission of having received the service prior to 18.04.2006, a case is made out for deletion of the demand, considering that Section 66A of the Finance Act 1994 was introduced into the statute before 18.04.2006 - Hence the appeals are allowed: CESTAT
- Appeals allowed: HYDERABAD CESTAT
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