2019 (2) TMI 437 – CESTAT NEW DELHI – TMI – CENVAT Credit – trading of goods – exempt activity – non-maintenance of separate records for dutiable as well as exempt goods – Rule 6(3) of CCR, 2004 – Held that:- A pure sale, unassociated 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 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, as 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. This being the statutory definition, sale of goods; be it made in the high sea or within the territorial boundary of India in which Finance Act, 1994 has its force, cannot be called a service to impose tax liability or deny the credit under Rule 6 of Cenvat Credit R
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ave not maintained separate accounts in respect of dutiable goods as well as exempted goods and therefore as per Rule 6(3) of CCR, 2004, the Appellants are required to pay an amount equal to 5% of value of exempted services i.e. value of trading goods provided, if they have availed the option not to maintain separate accounts. Thus a Show Cause Notice dated 26.4.2016 was issued proposing recovery from them being 5% as the value of traded goods (exempted goods) under Rule 14 of the Cenvat Credit Rules, 2004 r/w Section 11A(4) of the Central Excise Act, 1944 alongwith interest at applicable rate on the above amount u/s. 11AA of the Central Excise Act, 1944 read with Rule 14 of the Cenvat Credit Rules, 2004 (as amended) & penalty under Rule 15 of the Cenvat Credit Rules, 2004 and Rule 25 of Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944. Thereafter, the Ld. Addl. Commissioner passed the impugned Order-in-Original No. 19/ADC/D-I/2017 dtd. 28.2.2017 co
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ubmitted on behalf of appellant that the Ld. Commissioner (Appeals) has erred in directing the original adjudicating authority to decide the quantum of penalty as if the Cenvat Credit alongwith interest is reversed there is no question of penalty. The Appellants had relied upon the judgement in the case of Commissioner of Central Excise & Customs Vs Precot Meridian Ltd. reported in 2015 (325) ELT 234 (SC). Thus, the appellant has prayed for setting aside of penalty as imposed. Though has not objected the remand for ascertaining the reversible cenvat credit based on the documents as directed to be produced before adjudicating authority below. 5. Department on the other hand has justified the order and prayed for dismissal of appeal. 6. After hearing and perusing record, it is observed as follows:- The Appellants have availed and utilized cenvat credit on common inputs services namely courier services, telephone services, banking services, insurance services, professional services, l
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
hin the meaning of clause (29A) of article 366 of the Constitution which was inserted vide passing of Constitution [Forty Sixth] Amendment Act, 1982. 8. Going by its Statement of Objects and Reasons of this amendment, it can be ascertained that in conformity to the judgment of Hon'ble Supreme Court passed in Ganon Dunkerley‟s 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). 9. From a bare reading of the definition and provision mentioned above, it is apparently clear that a pure sale, unassociated with delivery of goods and services together, is not to be considered as servi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
on which Service Tax was not leviable, under Section 66 of Finance Act, 1994. Inclusion in Explanation to Rule 2(e) of Cenvat Credit Rules, 2004 trading was only clarificatory. 10. In the present case the Audit Report was regarding inadmissible input service tax credit availed on GTA for both dutiable and trading goods and objection was taken regarding non payment of 5% of value of trading goods. The Appellants paid ₹ 8,52,000/- vide challan No.212 dtd.30.4.2013 and ₹ 3,82,477/- on 24.10.2013 vide Challan No.03461. Thus, the SCN of 26.04.2016, in fact, would not have been issued. At least penalty has to be waived in view of Section 80 (2) of the Finance Act, 1994. The word used therein is shall‟. Hence the application of precision is mandatory. Also the Section is not creating a distinction where duty was not paid due to bonafide reasons or it was not paid due to malafide intent to evade duty. Thus, whenever no payment/short payment of duty is observed and the same s
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =