By TIOL News Service

MUMBAI, NOV 02, 2017: THE assessee is in appeal against the order of the lower authorities denying CENVAT credit.

The stand of the appellant is that the expenses incurred to avail input service having suffered service tax they areeligible forcenvat credit.

The Member(Judicial) observed that there was no substance in the show cause notice to provide a foundation for adjudication. Inasmuch as the adjudication can be said to have been ill-founded as per the ratio laid down in the following cases by the Supreme Court viz. Ballarpur Industries Ltd. - 2007-TIOL-153-SC-CX, Champdany Industries – 2009-TIOL-104-SC-CX, Toyo Engineering Ltd. – 2006-TIOL-111-SC-CUS, Brindavan Beverages (P) Ltd. – 2007-TIOL-118-SC-CX

The AR adverted to sub-section (7A) of Section 11A of the CEA, 1944 and submitted that any statement issued for any period shall be read together with show cause notice.

The Bench extracted the said sub-section: -

“(7A) Notwithstanding anything contained in sub-section (1) or sub-section (3) or sub-section (4),the Central Excise Officer may, serve, subsequent to any notice or notices served under any of those sub-sections, as the case may be, a statement, containing the details of duty of central excise not levied or paid or short-levied or short-paid or erroneously refunded for the subsequent period, on the person chargeable to duty of central excise, then, service of such statement shall be deemed to be service of notice on such person under the aforesaid sub-section (1) or subsection (3) or sub-section (4) or sub-section (5), subject to the condition that the grounds relied upon for the subsequent period are the same as are mentioned in the earlier notice or notices.”

And observed –

“4. Perusal of sub-section (7A) of Section 11A and the scheme thereof indicates that a proceedings can be initiated under that section for a particular period for which show cause notice was issued but not for other period. Each period being recognized by law separately for adjudication on its own facts, there cannot be compendium approach by adjudicating authority making a summary approach to act at his will and pleasure. The object of sub-section (7A) is to read the subsequent statement issued for the relevant period if omitted to be issued along with show cause notice and such statement issued earlier with reference to basic show cause notice of a relevant period shall only form part thereof to grant opportunity of defence. But the present case is not so, for which Revenue's contention is baseless.”

The appeal filed by the assessee was allowed.

In passing:

D.O.F.No.334/ 3/2013-TRU letter dated 28 February 2013 -

Annex III

LEGISLATIVE CHANGES

Other Amendments in the Central Excise Act

(iv) Section 11A is being amended to insert sub-section (7A) providing that service of a statement containing details of duty not paid, short levied or erroneously refunded shall be deemed to be a service of notice under sub-section (1) or (3) or (4) or (5) of this section. Reference to sub-section (1) in section 11DDA is being omitted.

(See 2017-TIOL-3864-CESTAT-MUM)