2018 (10) TMI 827 – ITAT CHENNAI – TMI – CENVAT Credit – common inputs/input services, used for manufacture of exempted products and dutiable products – non-maintenance of separate records – credit on certain inputs services also denied – vehicles as well as insurance for money- in-transit.
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Held that:- It is indeed correct to say that the show-cause notice is silent as to what are the inputs and input services on which the appellants have availed credit for production of Bagasse, Press Mud and Electricity. It is vaguely stated that the appellants have availed credit on inputs and input services for production of Bagasse, Press Mud and Electricity. In the annexure to the show-cause notice also, there is no specific figure shown regarding credit availed separately on inputs and input services.
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The demand prior to 01.03.2015 has been dropped by the adjudicating authority observing that the requirement to maintain separate accounts would be applicable only to exempted goods pr
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e Respondent : Shri R. Subramaniyan, AC (AR) ORDER The brief facts are that the appellants who are engaged in the manufacture of Sugar and Molasses, were issued five show-cause notices alleging wrongly availed credit for the reasons that they have not maintained separate accounts for common inputs/input services, used for manufacture of exempted products and dutiable products. It was also alleged that credit is not eligible on certain services. After due process of law, the original authority in respect of allegation of non-maintaining of separate accounts dropped the demand for the period prior to 01.03.2015 but confirmed the demand after 01.03.2015 in respect of Bagasse, Press Mud and Electricity. In respect of wrongly availed credit on capital goods, the proceedings were dropped. In respect of ineligible input services, the adjudicating authority dropped the proceedings partly but, however, confirmed the demand to the tune of ₹ 2,794/- only. Aggrieved, the appellants filed app
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y] as well as dutiable products [sugar]. The appellants have not availed any credit on inputs/input services for production of such goods. The show-cause notice is totally silent as to what are the inputs or input services that appellants have used in the manufacture of such exempted goods. The appellants have availed credit on any inputs‟ or input services‟ for production of Bagasse, Press Mud and Electricity. He explained the process stating that the inputs such as, sugarcane are crushed and the juice is extracted for manufacture of sugar. The remains from the crushing of sugarcane are the Bagasse. After the sugarcane juice is filtered, the waste product, which is Press Mud is obtained. The appellants have not availed any credit on input or input services for these processes. He submitted that the appellants had explained all these facts in their response to the show-cause notice but the authorities below have not given any weight to these submissions. He relied upon the
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d the show-cause notice as well as the orders passed by the authorities below. It is indeed correct to say that the show-cause notice is silent as to what are the inputs and input services on which the appellants have availed credit for production of Bagasse, Press Mud and Electricity. It is vaguely stated that the appellants have availed credit on inputs and input services for production of Bagasse, Press Mud and Electricity. In the annexure to the show-cause notice also, there is no specific figure shown regarding credit availed separately on inputs and input services. The appellants have replied stating that they have not availed any credit on inputs/input services for the production of the impugned goods. Even after giving such explanation in the reply, the authorities below have not considered the submissions made by the appellants in this regard. The Tribunal in the case of M/s. Ganga Kishan Sahkari Chini Mills Ltd. had occasion to consider similar issue that the assessee has not
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thority issuing show cause notice was not clear about Cenvatable inputs used in the production of bagasse. Further, on perusal of the order-in-original, it transpires that although the adjudicating authority has observed that the appellant has used Cenvatable inputs lubricant, etc. , in the manufacture of bagasse (liable to nil rate of excise duty), the adjudicating authority has not referred to any evidence which formed basis of this conclusion. Thus in our view the findings of the Authority is not supported by evidence and is based on unwarranted assumption. Thus in our view the department has failed to establish that the appellant used Cenvatable inputs for production of baggase. Once it is concluded that the department has failed to establish that the appellant used Cenvatable inputs for manufacture of bagasse, Rule 6(2) and Rules 6(3)(i) & (ii) of Cenvat Credit Rules, 2004 are not attracted. As sucfvh, we are of the view that the adjudicating authority as well as appellate aut
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