2018 (11) TMI 230 – CESTAT MUMBAI – TMI – CENVAT Credit – Non-payment of duty @ 6%/7% of the trading value – non-maintenance of separate dutiable and exempted accounts to avail CENVAT credit – Rule 6 of CCR 2004 – Bonafide belief – Demand based on audit objections – Held that:- It is apparently clear that a pure sale, un-associated with delivery of goods and services together, is not to be considered as service. Therefore what is contained in Section 66D of the Finance Act, 1994 dealing with negative list of services concerning trading of goods and the clarificatory circular referred above as well as inclusion of the same in the explanation appended to clause 2(e) of the Cenvat Credit Rules 2004 are mere clarificatory in nature since definition of service as contained in 65B(44) and exempted service in 66D are to be read conjointly and not in exclusion of each other – sale of goods-be it made in the high sea or within the territorial boundary of India in which Finance Act, 1994 has it
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
erials by selling the same to M/s Cipla Ltd., Mumbai, on whose behalf it also undertakes manufacturing process on job work basis. As per Rule 6 of CENVAT Credit Rules, 2004, if separate account for manufacturing on such trading by way of sale is not maintained, the assessee is liable to pay 6%/7% of the value of exempted goods/services besides payment under sub-rule 3A of Rule 6 of CENVAT Credit Rules, 2004. Appellant was put to notice on the basis of such Audit report which was objected by it but ultimately resulted in imposition of such duty liability including interest and penalty covering extended period on the ground of suppression of facts etc. 3. During the course of hearing of the appeal, Learned Counsel for the appellant argued that such activity of the appellant can never be treated as trading since show cause cum demand notice itself indicated that commercial invoices for landing cost to compute Sales Tax formality only invoices were raised and it did not derive any profit o
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Rules, 2004. Further Learned Counsel for the appellant contented that the imposition of penalty is not in conformity to the law and procedure prevailing during the disputed period which should never had extended the duty demand for the extended period. He prayed for setting aside of the order of the Commissioner (Appeals). Learned Counsel for the appellant has relied upon the various judgments in his support: (i) CCE & SERVICE TAX, Ghaziabad Vs. Mahaveer Cylinders Ltd. – 2016 (341) ELT 361 (Tri.-All.) (ii) CCE, Ghaziabad Vs. UP Telelinks – 2015 (329) ELT 888 (Tri.-Del.) (iii) A. R. Casting (P) Ltd. Vs. CCE & ST, Chandigarh – 2010 (256) ELT 420 (Tri.-Del.) (iv) Chitrakoot Steel & Power Pvt. Ltd. Vs. CCE, Chennai- 2008 (10) STR 118 (Tri. Chennai) (v) CCE, Chandigarh-I Vs. Punjab Steels – 2011 (21) STR 5 (P & H) (vi) Exide Industries Ltd. Vs. CCE & ST, Raigad – 2018-TIOL-1541- CESTAT-MUM 4. Learned AR for the Department, in response to appellant s contention, fully sup
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
case (AIR) 1958 SC 560 whereby the sale of goods as used in entry of the 7th schedule to the constitution was treated to have carried the same meaning as in the Sale of Goods Act, 1930, coupled with subsequent decisions of the Hon'ble Supreme Court were the prelude to passage of such an amendment act that suitably amended tax on the sale or purchase of goods and included the same in Article 366 of the Constitution of India under a new Article (29A). 5.2 On the other hand Service as defined under 65B (44) of the Finance Act, 1994 excludes (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution. 6. From a bare reading of the definition and provision reproduced above, it is apparently clear that a pure sale, un-associated with delivery of goods and services together, is not to be considered as service. Therefore what is contained in Section 66D of the Finance Act, 1994 dealing with negative
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
as duty, escapes taxation and the process of verification is always carried out in the presence of assessee and in the process, the auditor is required to discuss the matter with the assessee and advice him to follow correct procedure in future. It is also referred in the said manual that after such submission of audit report, in cases where the disputed amount have not already been paid by the assessee at the spot, demand notices are issued by the department for their recoveries. EA 2000 audit was therefore held to be participative audit. Likewise CERA audit is conducted by the Comptroller and Auditor General of India in respect of receipt and expenditure of the Government of India. It also discharges revenue audit which covers central excise, service tax and customs laws during which time the assesses were examined by CERA audit party to point out the deficiencies, leakage of revenue and non recoveries of dues by the Central Excise Department. Therefore, it cannot be said that only
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =