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2024 (12) TMI 1297
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....six hundred eleven only) upon the party under Rule 15 of the CCR, 2004 read with Section 11AC of the Act ibid. 2.1 Appellant having Central Excise registration No. AACCR7807BXM001 are engaged in manufacture of M.S. Bars and providing taxable services and exempted services (Trading). The party is also availing the facility of CENVAT credit. 2.2 During the audit of records of the appellant for the period 2014, it was observed that appellant was not paying amount in compliance of rule 6(3) of the cenvat Credit Rules, 2004 (in short CCR, 2004). 2.3 As per explanation to rule 2(e) of the CCR, 2004 'exempted service' includes trading. As per rule 6(2) of the CCR, 2004, where a manufacturer or provider of output service avails of cenvat credit in respect of inputs or input services and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services then, the manufacturer or provider of output service shall maintain separate account and shall take cenvat credit only on input pr input services used in relation to manufacture of dutiable goods and taxable output services. Rule 6(3)(i) of the CCR, 2004....
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...., they were required to pay an amount equal to value of 6% of exempted service i.e. trading in terms of Rule 6 (3) of CCR, 2004. 2.8 As per provisions of Rule 6(3) of the CENVAT Credit Rules, 2004 the liability on appellant for the period from 2012-13 to 2015-16 was calculated as under: Year Cost of traded goods Sale price traded goods Profit earned (Col C-Col B) 10% of the cost of goods sold Value of exempt Service (traded goods) as per Explanation I(c) of Rule 6(3D) of CCR 2004 Amount to be paid in accordance with rule 6(3) as per @6% of value determined under Rule 6(3D) of CCR 2004 A B C D E F G 2012-13 522738538 623173834 100435296 52273854 100435296 6026118 2013-14 494048064 612288321 118240257 49404806 118240257 7094415 2014-15 595171828 626888206 31716378 59517183 59517183 3571031 2015-16 933749350 1125333460 191584110 93374935 191584110 11495047 Total 28186611 2.9 Appellant had not disclosed trading activities to the department. They did not disclose complete income from these activities to the department. The facts of availment of cenvat....
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.... Education [AIR 1991 SC 271] • Demand not sustainable as SCN and impugned order have been passed without scrutiny of any documents and with providing any evidence. • Tanay Landcon India Pvt Ltd. [2015 (40) STR 608 (T-Del)] • The appellant has not provided any taxable service on which cenvat credit was availed. • The CENVAT Credit is availed on the input services exclusively on inputs services used for the manufacture of goods. • Security services were received and utilized exclusively at the factory premises. • Royalty was paid by the Appellant to Kamdhenu Ispat Ltd., for manufacture of Kamdhenu Bars under the franchise agreement. • Repair Chrges were paid for repair and maintenance of plant and machinery. • Legal Charges were exclusively in respect legal services availed for the factory. • They have not availed any credit on the transportation of traded goods for the reason that the freight paid transportation of traded goods was below Rs 750/- and exempted as per Notification No 34/2004-ST. • Appellant maintained separate account for taxable and exempt....
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.... Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. Explanation 1. For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2.-Value of non-excisable goods for the purposes of this rule , shall be the invoice value and where such invoice value is not available , such value shall be determined by using reasonable means consistent with the principles of valuation contained in the Excise Act and the rules made thereunder. Explanation 3. For the purposes of this rule, exempted services s activity, which is not a defined in clause (le) of rule 2 shall include an 'service' s defined in section 658(44) of the finance Act, 1994 [provided that such activity has used inputs or input services]. Explanation 4. Value of Such an activity as specified above in Explanation 3, shall be ....
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....w anyone of the following options, as applicable to him, namely:- (i) Pay an amount equal to six per cent Of value of the exempted goods and exempted services; or (ii) Pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clouse (a) of sub-rule (2), take CENVAT credit only on inputs under sub-clauses(i)J and (iv) of said clause (a) and pay an amount as determined under sub-rule (3A) in respect of input services. The provisions of sub-clauses (i) and (il) of clause (b) and sub-clauses (i) and (ii) of clause (c) of sub-rule (3A) shall not apply for such payment. Further, value of services in case of trading has envisaged in explanation to the - Rules which is reproduced as under:- Explanation 1 "Value" for the purpose of sub-rules (3) and (3A),- - (a) shall have the same meaning as assigned to it under section 67 of the Finance Act, read with rules made there under or, as the case may be, the value determined under section 3, 4 or 4A of the Excise Act, read with rules made there under, (b) in the case of a taxable servic....
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....ed for providing such taxable service shall be taken. 6.6. That even prior to 01.07.2012 as per explanation appended to Rule 2(e) of the CCR, 2004, the exempted services including trading and the legal position of the trading services even after 01.07.2012 remains the same as per Section 66D(e) of the Finance Act, 1994 trading of goods has been specified as a service under Negative list. That it is also relevant to point out that Explanation 1(c) to Rule 6(3D) states that the value of traded goods for the purpose of reversal or payment of amounts will be the difference between the sale price and the cost price of the goods 6.7. That as it is alleged that the party was engaged in providing taxable Business Auxiliary Services and exempted services i.e. trading during the impugned period but they have neither maintained seprate records nor paid an amount equal to 6% of the value of the exempted services i.e. trading which was recoverable from the party. 6.8. In their defence party have submitted that the Department have not specified specific common input service on which CENVAT credit availed by them. The contention of the party is not justified. In para 6 ....
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....arty has failed to maintain separate account as provided in the Rule mentioned above. Maintenance of sale and purchase ledger in respect of trading cannot be said as proper documents required to be maintained in accordance with the provisions of Rule 6(2) of CCR, the same should be maintained in respect of. services used in or in relation to trading Thus the plea of t the party cannot be accepted 6.11 Therefore, I hold that the party were providing the taxable and exempted output service using common input services, as such, they are liable for payment of 6% of the value of the exempted service i.e. trading and the value of the trading service shall be determined as per Explanation - 1(c) appended to Rule 6(3D) of CCR, 2004. That in the case of Orion Appliances Limited Vs. CST [2010]27 STT 319 (Ahed CESTAT), the principle was laid down by the Tribunal which was later on adopted by the legislature for valuation of trading activity to be used for charging amount against these activities Therefore, I find that the party is liable to pay an amount of Rs. 2,81,86,611.00 and the same is recoverable from them under Section 11A of the Central Excise Act, 1944 read with Rule 14 of ....
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....ame has been issued more than one year from the date in which the appellant intimated the audit party vide their letter dated 8.12.2007 giving the details of the activity undertaken by them for BALCO. Hon'ble Gujarat High Court in the case of Neminath Fabrics (P) Ltd V. Commissioner of Central Excise Surat-- 2010(256)ELT 369 (Gujrat) has clearly held that date of knowledge was of no significance. The Hon'ble Court has held that once the suppression of facts is established, then the Show Cause Notice may be issued within the extended period of time provided. The Hon'ble Supreme Court has held in the case of Mehta and Company reported in 2011 TIOL 17-SC-2011(264)ELT 481(SC) that show cause notice can be issued within a period of 5 years from the date of knowledge if the suppression of facts is established. .................... " 6.14. That since the act and omission of the party was covered under intent to evade payment of service tax, they are liable for penal action under Rule 15 of the CCR, 2004 read with Section 11AC of the Act. 4.3 During the course of arguments appellant specifically submitted that they are having two premises one located at Fazal ....