M/s. R. STAHL (P) LTD. Versus COMMISSIONER OF GST & CE, CHENNAI OUTER
Central Excise
2019 (3) TMI 609 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 7-3-2019
E/41885/2018 – FINAL ORDER NO. 40414/2019
Central Excise
Smt. Sulekha Beevi C.S, Judicial Member
For the Appellant Shri M. Karthikeyan, Adv.
For the Respondent Shri L. Nanda Kumar, AC (AR)
ORDER
Brief facts are that the appellants are manufacturers of alarm and signalling devices and light fittings. The availed the facility of Cenvat credit of duty paid on inputs and capital goods and service tax paid on input services. During the course of audit of accounts, it was noticed that the appellant had effected high-sea sales during the period 2012-13 to 2016-17 [upto Nov.'16], which according to department was exempted services and hence credit availed on common input services/inputs should have been reversed as per Rule 6(3) of CCR, 2004. On being pointed out by the audit, the appellants reversed the cr
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ision of the Tribunal in the case of M/s. Rajpetro Specialities Pvt. Ltd., Vs The Principal Commissioner of GST & CE, Chennai North Commissionerate reported in 2019 (2) TMI 7 – CESTAT Chennai and the decision in the case of M/s. Ramboll Imisoft Pvt. Ltd. Vs Commissioner of Customs, Central Excise & Service Tax, Hyderabad-II reported in 2017 (47) S.T.R.61 (Tri.-Hyd.).
3. The learned Authorised Representative for the Revenue Shri L. Nanda Kumar, AC (AR) supported the findings in the impugned order. He argued that the appellants have already paid the amount along with interest. They have violated the provisions of law and availed wrong credit on trading activities. Therefore, the demand of interest and penalties imposed are legal and proper.
4. Heard both sides.
5. The issue is with regard to demand raised alleging that credit was availed on common input services which were used for trading activity (high-sea sales) and manufacturing activity. From the arguments put forward by learned
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eyond 200 nautical miles from the shore is called „High Sea‟. The transaction of sale in such cases commences outside the territory of India and is also concluded outside the territory of India. If a buyer (importer) wants to sell the consignment to a third party before arrival of such goods, but after sailing of the vessel from load port, such sale is generally High Sea Sale. In other words, the ownership of goods is transferred when goods are in transit. It is thus the sale of goods which happens by way of transfer of document of title after the goods cross the Customs Barriers of the foreign nation but before they cross (enter) the Customs frontiers of India. Hence, when High Sea Sales take place outside the territorial waters, I do not understand how such sales can be considered as an exempted service (trading) so as to fall within the ambit of Rule 2(e) of the CENVAT Credit Rules, 2004.”
6. When the alleged trading activity has occurred outside the jurisdiction of Cen
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