2018 (12) TMI 1166 - AT - Central Excise

Valuation - inclusion of hundi charges collected by the appellant from their customers in assessable value - Held that - Tribunal in the case of Collector of Central Excise vs. Shree Bhawani Cotton Mills & Industries Ltd. 1985 (1) TMI 214 - CEGAT, NEW DELHI has held that bank commission and hundi commission and interest payable to the bank in the account of the customers cannot be included in the assessable value - demand set aside. CENVAT Credit - various input services - Held that - The services are held to be eligible for credit as decided in various decisions - credit of all services allowed except vehicle repair & maintenance and Internet charges. Appeal allowed in part.

Summary

Issues involved:
1. Confirmation of demand on hundi charges collected by the appellant.
2. Admissibility of various services for Cenvat credit.

Detailed analysis:
1. The first issue pertains to the confirmation of demand on hundi charges collected by the appellant. The Revenue contended that these charges should be included in the assessable value, resulting in a confirmed demand of approximately ?1.16 crores. However, the appellant argued citing the case law precedent set by the Collector of Central Excise vs. Shree Bhawani Cotton Mills & Industries Ltd. and the subsequent affirmation by the Hon’ble Supreme Court in the case of Shri Bhawani Cotton Mills Industries Ltd. The Tribunal concurred with the appellant's submission, holding that hundi charges should not be included in the assessable value. Therefore, the demand, along with interest and penalty totaling around ?1.16 crores, was deemed unsustainable.

2. The second issue revolves around the admissibility of various services for Cenvat credit. The appellant contended that based on decisions of the Tribunal and rulings of the Hon’ble High Courts, certain input services are eligible for Cenvat credit. The appellant provided a detailed list of input services along with corresponding case law references supporting their admissibility for Cenvat credit. After considering the submissions from both parties, the Tribunal concluded that the listed services are indeed eligible for Cenvat credit based on the precedents cited. Consequently, the confirmation of demand amounting to ?2.78 crores was set aside, except for the portion related to vehicle repair & maintenance and Internet charges, which were not contested by the appellant due to their small amount and prior payment. Additionally, the Tribunal nullified the penalty imposed on the appellant.

In conclusion, the appeal was partially allowed, with the Tribunal ruling in favor of the appellant on both issues discussed, thereby providing a detailed analysis and legal justification for the decisions rendered.