News Update

CBIC revises tariff value of edible oils, gold & silverFormer IPS officer Sanjiv Bhatt jailed for 20 yrs for planting drugs to frame lawyerCentre receives Rs 18.5 lakh crore tax revenue upto Feb monthUN says Households waste across world is now at least one billion meals a dayExpert Committee on developing GIFT IFSC as 'Global Finance and Accounting Hub' submits report to IFSCAIndia, China hold fresh dialogue for complete disengagement on Western borders: MEADefence Production issues notification for re-organisation of DGQAThakur says India is prepared for 2036 OlympicsCBDT substitutes Form in ITR-5EV Revolution: Lessons for India to learn from US and China!London court green-signals auction of luxury apartment of fugitive Nirav ModiGovt consults RBI; finalises borrowing plan for first half of FY 2024-25Gadkari says Farmers’ protest is politically-motivatedVP calls upon women entrepreneurs to be 'Vocal for Local'America offers USD 10 mn bounty for information on ‘Blackcat’ hackers after UnitedHealth gets hitI-T- The order of the ITSC can only be reopened in cases of fraud or misrepresentation: HC8 persons including Hezbollah militants killed in Israeli strike on LebanonMacron pillories EU-South Africa trade deal; calls it ‘really bad’ in BrazilThailand’s Lower House okays Bill to legitimise same-sex marriageYellen warns China against clean energy dumpingMilky Way’s central black hole - Twisted magnetic field observedCus - Assessee has not proved beyond reasonable doubt that goods in question imported under air way bills/bills of entry were in fact filed by him and hence the only natural corollary available to Revenue is confiscation of same: CESTATSmall investors help Trump Media’s valuation skyrocket to USD 13 billionJustice Ritu Raj Awasthi joins as Judicial member of Lokpal
 
CX - Having reversed credit that has been irregularly availed, department cannot force assessee to pay 10% of value of clearances in terms of rule 6 of CCR, 2004: CESTAT

 

By TIOL News Service

CHENNAI, JULY 20, 2018: THE appellants are engaged in manufacture of both dutiable and exempted products and availed the facility of CENVAT credit paid on input services used in relation to manufacture of their final products but failed to maintain separate accounts for input services used in manufacture of dutiable and exempted products.

A SCN was issued proposing to demand 10% of value of exempted products. The appellant had reversed the amount being the credit availed on entire input services used commonly for dutiable as well as exempted products. In the SCN, it was specifically stated that appellants are required to maintain separate accounts in respect of certain services which fall outside the purview of Rule 6(5) of CCR, 2004. Meanwhile, taking note of the mention in SCN that they are eligible to avail CENVAT credit on certain services which fall under Rule 6(5), the appellant took re-credit. Department issued a letter dated 26.5.2014 informing the appellant that such re-credit taken suo moto is irregular.

Original authority confirmed the demand of Rs.46,15,943/- and appropriated an amount of Rs.21,31,535/- which was the balance after suo moto re-credit by the appellant. Penalty was also imposed under Rule 15 of CCR, 2004.

As the order was upheld by the Commissioner(A), the appellants are before the Tribunal.

Assessee submitted that the issue whether they are liable to pay 10% of the value of exempted goods when they have already reversed the credit which has been utilized commonly for dutiable and exempted products has been settled by following decisions:-

Chandrapur Magnet Wires (P) Ltd. Vs. Collector - 2002-TIOL-41-SC-CX

ICMC Corporation Ltd. Vs. Commissioner - 2014-TIOL-121-HC-MAD-CX

Tribunal observed -

++ Appellants had wrongly availed input service tax credit on common input services used for exempted and dutiable products. On being pointed out, they have reversed the entire input service tax credit. Later, on realizing that they are eligible for credit for certain services, they have taken suo moto credit.

++ Thus, having reversed the credit that has been irregularly availed by them, the department cannot force upon the appellant to pay 10% of value of clearances. Said issue has been settled in case of SPM Industries , ICMC Corporation Ltd. as well as ETA Technology Pvt. Ltd. - 2010-TIOL-569-HC-KAR-CX. It is stressed that the demand in respect of 10% of value of clearances is set aside on the ground that the appellant has reversed the credit in respect of input services, which they are not eligible, being common input services, used for exempted and dutiable products and which do not fall within the purview of Rule 6(5).

++ Assessee has submitted that they will not claim refund of the amount that has been so reversed.

Concluding that the demand cannot sustain, the impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-2218-CESTAT-MAD)


POST YOUR COMMENTS
   

AR not Afar by SK Rahman

TIOL Tube Latest

Shri Shailendra Kumar, Trustee, TIOL Trust, giving welcome speech at TIOL Awards 2023




Shri M C Joshi, Former Chairman, CBDT




Address by Shri Buggana Rajendranath, Hon'ble Finance Minister of Andhra Pradesh at TIOL Awards 2023