9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 315 - AT - Central ExciseCENVAT Credit - trading activity - common input services used for manufacture of finished products as well as trading activities - demand to the extent of 10% / 8% / 6% of traded goods for the disputed period, on the ground that the appellants have not filed declaration as contemplated in Rule 6 (3A) - time limitation - Held that - The issue has been settled in the case of DALMIA BHARAT SUGAR AND INDUSTRIES LTD., DALMIA CHINI MILLS VERSUS C.C.E. CUS. & S. TAX, NEW DELHI 2017 (1) TMI 231 - CESTAT NEW DELHI , where it was held that the Commissioner is not justified in insisting that appellant reverse cenvat credit in terms of Rule 6(3)(i) of Cenvat Credit Rules - demand do not sustain. Time Limitation - Held that - The appellants had been reversing the credit availed on common input services and informed the department whenever the details were asked for. Thus the department was fully aware that the appellants were conducting trading activity - the demand raised invoking the extended period is without any factual or legal basis. Appeal allowed - decided in favor of appellant.
Issues:
1. Eligibility of Cenvat Credit on common input services used for trading activities. 2. Compliance with Rule 6(3A) regarding the exercise of option to reverse credit. 3. Grounds of limitation for raising demands. Analysis: Issue 1: Eligibility of Cenvat Credit on common input services for trading activities The appellants, engaged in manufacturing and trading, availed Cenvat Credit on common input services. The department contended that trading being an exempted service, the appellants were not eligible for credit on input services used for trading. The appellants voluntarily reversed the credit attributable to trading upon notification by the department. The department, however, insisted on the payment of 10% / 8% / 6% of the value of traded goods due to the appellants not filing a declaration under Rule 6(3A). The appellant argued that the requirement of filing a declaration was procedural and not mandatory, citing precedents. The Tribunal, following previous decisions, held that the demand was unjustified, setting it aside and allowing the appeal on merits. Issue 2: Compliance with Rule 6(3A) regarding the exercise of option to reverse credit The department contended that the appellants did not comply with Rule 6(3A) by not filing a declaration to exercise the option to reverse credit, leading to the demand for payment of a percentage of the value of traded goods. The appellant argued that the failure to file the declaration did not warrant the mandatory payment, as they had voluntarily reversed the credit. Citing precedents, the Tribunal held that the procedural lapse did not deny the substantive right under Rule 6(3A), remanding the matter for verification by the original authority. Issue 3: Grounds of limitation for raising demands The appellant argued that demands raised invoking the extended period were baseless as the department was aware of the credit availed on common input services for trading activities. The appellant had disclosed the credit in returns and provided documents as requested. The Tribunal found no evidence of wilful suppression of facts, noting that the department was fully informed about the trading activities. Consequently, the demand raised invoking the extended period was deemed without factual or legal basis, leading to the success of the appeal on limitation grounds. In conclusion, the Tribunal set aside the impugned orders on both merits and limitation, allowing the appeals with any consequential reliefs.
|
