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2019 (3) TMI 180 - AT - Central ExciseReversal of Cenvat Credit - Clearances of electricity for a consideration w.e.f. 01/03/2015 - invocation of Rule 6 of CENVAT Credit Rules, 2004 - scope of SCN - Held that - In the impugned order, the Commissioner, in para 23, has dropped all the demands raised against the appellant in the show-cause notices but in para 24, he has, without any justification, recorded the finding that the provisions of Rule 6 of CCR are attracted for clearances w.e.f. 01/03/2015 which was not the period involved in the present case and there was no show-cause notice for the period after the amendment - thus, the adjudicating authority cannot go beyond the show-cause notice. Thus, para 24 in the order portion is not sustainable in law - appeal allowed - decided in favor of appellant.
Issues:
Appeal against dropping proceedings but applying Rule 6 of CENVAT Credit Rules, 2004 for electricity clearances. Analysis: The appellant, engaged in sugar and molasses manufacturing, generated and sold electricity. Three show-cause notices demanded recovery for electricity sales to power distribution companies from Oct 2012 to Feb 2015. The Commissioner dropped the demands but applied Rule 6 of CCR from 01/03/2015. Appellant challenged this observation beyond the case period. Citing legal precedents, appellant argued against exceeding show-cause notice scope. The appellant contended that the Commissioner's observation on Rule 6 applicability post 01/03/2015 was unwarranted as it fell outside the case period. The appellant emphasized that adjudicating authorities cannot exceed show-cause notice allegations, citing various court decisions supporting this principle. The learned AR supported the impugned order. The Tribunal noted the Commissioner's dropping of all demands in the show-cause notices but found the Rule 6 observation for a period beyond the case unwarranted. Relying on legal precedents, the Tribunal held that the Commissioner's extension beyond the show-cause notice was unsustainable in law. Consequently, the Tribunal set aside the part of the order related to Rule 6 applicability post 01/03/2015, while upholding the rest of the order. The appeal was allowed based on this analysis.
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