2018 (11) TMI 78 - AT - Central Excise

100% EOU - CENVAT Credit - appellants are manufacturing both dutiable and exempted goods and are rendering exempted service - non-maintenance of separate records - scope of SCN - Held that - The Commissioner(Appeals) has not considered all the grounds raised by the appellant in their appeals. Further the computation error committed in the original order was sought to be rectified by the appellant by way of production of Chartered Accountant certificate and the same was denied on the ground that additional evidence cannot be produced before the appellate authority by resorting to provisions of Rule 5(1) of the Central Excise (Appeals) Rules, 2001. There is no restriction under law for raising the additional issue / grounds in the appeal, if the same has a bearing on the taxability of the assessee - The impugned order is not sustainable in law and the same is set aside and the case is remanded back to the original authority to pass de novo order - appeal allowed by way of remand.

Summary

Issues:
- Appeal against common impugned order
- Allegation of manufacturing both dutiable and exempted goods
- Non-maintenance of separate accounts
- Dispute on applicability of Rule 6 of the CCR
- Error in computation of ineligible credit
- Sale of surplus electrical energy affecting CENVAT credit
- Failure to consider all grounds raised in the appeals
- Denial of rectification of computation error
- Additional issues raised in the appeal
- Consideration of documents regarding maintenance of separate accounts

Analysis:
The appellant, a 100% EOU engaged in manufacturing various products for export, faced allegations of manufacturing both dutiable and exempted goods without maintaining separate accounts as per Rule 6 of the CCR. The Department issued show-cause notices demanding credit attributable to alleged exempted goods and services. The Jt. Commissioner confirmed duty, interest, and penalties, leading to appeals before the Commissioner(Appeals), who rejected them. The appellant contended that the impugned order did not consider all facts and law, contrary to binding judicial precedents. The appellant argued that the appellate Commissioner failed to address key issues, including the sale of surplus electrical energy and errors in computation, which were crucial for determining tax liability.

The appellant highlighted that the appellate Commissioner's refusal to consider errors in computation, citing Rule 5(1) of the Central Excise (Appeals) Rules, 2001, was incorrect as it pertained to computational mistakes based on existing records, not new evidence. The appellant emphasized the need to address all grounds affecting tax liability, citing relevant legal decisions. The appellate Commissioner's failure to consider documents proving separate account maintenance by various units further weakened the impugned order's validity.

Upon review, the Tribunal found that the Commissioner(Appeals) did not address all grounds raised by the appellant and wrongly denied rectification of computation errors. The Tribunal emphasized that additional issues impacting tax liability could be raised in appeals, as established by legal precedents. The Tribunal concluded that the impugned order was unsustainable, setting it aside and remanding the case to the original authority for a fresh decision considering all evidence and documents provided by the appellant. The appeals were allowed by way of remand, ensuring a comprehensive review of all relevant materials before reaching a final decision.