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PM-STIAC discusses accelerating Industry-Academia Partnership for Research and InnovationIndia, Singapore hold dialogue over cyber policy44 bids received under 10th Round of Commercial Coal Mine AuctionsCops arrest former Dy PM of Nepal in cooperative fraud casePuri highlights India's Petrochemical potential at India Chem 2024UN reports record high cocaine production in ColombiaMinister unveils 'Aviation Park' showcasing India's Aviation HeritageED finds PFI wanted to start Islamic movement in IndiaBlocking Credit - Rule 86ASEBI says investors can use 3-in-1 accounts to apply online for securitiesI-T- Penalty u/s 271(1)(b) need not be imposed when assessee moved an adjournment application & later complied with notice u/s 142(1): ITAT4 Kanwariyas killed as vehicle runs over them in Banka, BiharI-T- Accounting principles do not prescribe maintaining of a day-to-day stock register, and the books of accounts cannot be rejected on this basis alone: ITATUN food looted and diverted to army in EthiopiaCus - Alleged breach of conditions for operating public bonded warehouse; CESTAT rightly rejected allegations, having found no evidence of any such breach: HCUS budget deficit surges beyond USD 1.8 trillionST - Onus for proving admissibility of Cenvat Credit rests with service provider under Rule 9(6) of the Cenvat Credit Rules, 2004: CESTATIf China goes into Taiwan, Trump promises to impose additional tariffsRussians love Indian films; Putin lauds BollywoodCus - Classification of goods is to be determined in accordance with Customs Tariff Act & General Interpretative Rules; Country-of-Origin Certificate may offer some guidance, but cannot solely dictate classification: CESTATCus - Benefit of such Country-of-Origin certificates cannot be denied if all relevant conditions are met under the applicable Customs Tariff rules: CESTATCuban power grid collapses; Country plunges into darknessCus - As per trite law, merely claiming a classification or exemption does not constitute mis-declaration or suppression - any misclassification does not equate to willful intent to evade duty: CESTATKarnataka mulling over 2% fee on aggregator platforms to bankroll gig worker welfare fundCus - Extended limitation cannot be invoked in case of assessee who is a regular importer with a consistent classification approach: CESTAT
 
CX - Respondents were extended benefit of CENVAT after denying benefit of Notfn. 67/95 - it cannot be said that Revenue have gone beyond allegations levelled in SCN & therefore, orders are required to be set aside: CESTAT

By TIOL News Service

MUMBAI, SEPT 11, 2014: THE respondents are having two units and are manufacturers of White Zinc Oxide. Till August 1998, Respondent No.2 used to do certain processes and clear the same to the Respondent No.1 on payment of Central Excise duty. Respondent No. 1 took the credit of the duty paid and carried out further processes and cleared the same on payment of duty.

Vide letter dated 20.7.1998, the CCE, Pune-II pointed out to the respondents that two units cannot be treated as separate identities for the purpose of Central Excise Law as well as the Cost Accountant's reports and, therefore, the transaction between two units are to be considered as two wings of the same factory. On this basis the Respondent No.2 filed two classification declarations and claimed the benefit of Notification No. 67/95-CE for clearances between two units and cleared the goods without payment of duty.

Reneging on its advise the department issued a SCN on 30.11.2000 & sought to deny the benefit of Notification No. 67/95-CE on the premise that the respondents are registered as two separate legal entities with Companies Act, Income Tax Department, Factory Act and Sales Tax. Duty was also demanded along with a proposal for imposition of penalty and interest.

The adjudicating authority held that the respondents are two separate units and are not entitled to avail the benefit of Notification No. 67/95-CE and confirmed the demand of duty along with interest but dropped the penalties. It was further held that the duty paid on the clearance would be entitled as CENVAT Credit to the other unit.

Unimpressed with this dole out, the Revenue challenged the order before the Commissioner (Appeals) on the ground that the adjudicating authority had no power to hold that on payment of duty by one unit the latter is entitled to take CENVAT Credit as it is not alleged in the show cause notice.

Since Commissioner (Appeals) concurred with the adjudication order, Revenue is before the CESTAT and submits that both the lower authorities have gone beyond the allegations leveled in the SCN and, therefore, the orders are required to be set aside . (Usually it is the other way around! )

The Bench observed -

++ On perusal of the record, we find that in defence of the allegation made in the show cause, the respondents have prayed that if it is held that the respondents are two separate units, in that case, if duty is paid by one unit the same is entitled as CENVAT Credit to the another unit.

++ As the respondent had made this defence in the replies to the show cause notice, the adjudicating authority agreed with this contention of the respondents and passed the order holding that they are entitled to take CENVAT Credit of duty paid by the another unit. The same view has been affirmed by the Ld. Commissioner (Appeals).

Affirming the view taken by the lower authorities & holding that there is no infirmity in the o-in-a, the Bench upheld the order and dismissed the Revenue appeals.

In passing : Was this a frivolous appeal? 

(See 2014-TIOL-1725-CESTAT-MUM)


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