9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 172 - AT - Central ExciseCENVAT Credit - intimation/declaration regarding exercise of option in terms of Rule 6(3A) of the said Rule was not given to the jurisdictional officer - HELD THAT - Enough, while acknowledging separate location of both the premises and separate maintenance of account for both manufacturing and trading activities, the Commissioner has apparently reached at a finding that common input services were being used by the Appellant for both trading and manufacturing activities as Appellant had been maintaining common Balance Sheet for its manufacturing as well as trading activities, despite the fact that Balance Sheet of the Company records the financial transactions including Profit Loss, Assets Liability of the entire Company and it has got nothing to do with availment of services which are recorded in the accounting package, as such, separately. The issue is no more res integra in view of consistent decisions of this Tribunal that has attained finality with the approval of various Appellate Courts that Rule 6(3)(i) ibid cannot be made automatically applicable on failure to intimate in writing about options to be availed by the assessee but here the facts are completely different in the sense that Appellant disputed the demand saying that it had not availed any common input services for its trading activity, but accepted the observation of Audit without challenging the legality of the issue only to set the dispute at rest. Therefore, proportionate reversal, when made it in compliance to Audit report, is well within the knowledge of the Respondent- Department. Such a paper work in putting a written intimation would have added no additional advantages to the Appellant. In view of the settled principle of law that in the absence of such intimation in writing Rule 6(3)(i) cannot be applied to confirm the demand by taking 5%/6% of the entire credit amount. The order passed by the Commissioner of Central Excise, Pune-I is hereby set aside - Appeal allowed.
Issues involved:
The appeal concerns the confirmation of demand under Rule 6(3)(i) of the CENVAT Credit Rule, 2004 due to the failure to provide intimation/declaration regarding the exercise of option under Rule 6(3A). Details of the Judgment: Issue 1: Availing CENVAT Credit for common services The Appellant, a manufacturer and trader with separate registrations for warehouse and manufacturing units, claimed CENVAT Credit only for duty paid on specific goods for manufacturing. The department objected to this, leading to a demand for reversal of credit under Rule 6(3)(i). The Appellant complied with the demand, but a subsequent notice demanded a significant amount. The Appellant contested this, citing case laws and arguing that the demand was excessive and not in line with established rules of parity. Issue 2: Reversal of CENVAT Credit and exercise of option The Respondent argued that since the Appellant did not exercise the option of proportionate reversal by intimating the authority, the entire amount of exempted service should be considered for assessment. The Respondent referred to judgments to support the requirement of following the procedure under Rule 3A. The Tribunal noted the Appellant's consistent claim that credit was not availed for trading activities and that separate records were maintained. The Tribunal found that the failure to provide written intimation did not automatically confirm the demand under Rule 6(3)(i). Conclusion: The Tribunal allowed the appeal, setting aside the order of the Commissioner of Central Excise. The judgment emphasized that in the absence of written intimation, Rule 6(3)(i) cannot be applied to confirm the demand based on the entire credit amount. Significant Phrases: - CENVAT Credit Rule, 2004 - Rule 6(3)(i) - Rule 6(3A) - Adjudication order - Proportionate reversal - Intimation to the authority - Exempted service - Tribunal's decision - Commissioner's order - Written intimation - Rule of parity
|
