Custom, Excise & Service Tax Tribunal
Kalyani Steels Ltd vs Commissioner Of Central Excise, ... on 26 December, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 22417 / 2014 Application(s) Involved: E/Stay/22877/2014 in E/22581/2014-SM Appeal(s) Involved: E/22581/2014-SM [Arising out of Order-in-Appeal No. BGM-EXCUS-000-BLR-APP-HAB-038-2014 dated 27/05/2014 passed by the Commissioner of Central Excise, Mysore] Kalyani Steels Ltd. Hospet Road, Ginigera Koppal 583 228 AP Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax, Belgaum No. 71, Club Road, Central Excise Building, Belgaum 590 001 Karnataka Respondent(s)
Appearance:
Mr. M.S. Nagaraja, Advocate M/s. T. Rajeswara Sastry & Associates, No.48, 11th Main Road, Banashankari II Stage, Bangalore - 560 070 For the Appellant Mr. R. Gurunathan, AR For the Respondent CORAM:
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER Date of Hearing: 26/12/2014 Date of Decision: 26/12/2014 Order Per: B.S.V. MURTHY After hearing both the sides in detail, I found that the appeal itself has to be decided in this case even though learned AR opposed the observation and submitted that matter may be decided finally at a later stage and stay application alone be considered at this stage. This is because in my opinion the whole proceedings initiated culminating in reaching the Tribunal itself was unnecessary and unwarranted. The requirement of pre-deposit is accordingly waived and the appeal itself is taken up for final decision.
2. On 07.12.2012, the jurisdictional Range Officer wrote a letter to the appellant requiring them to furnish details of CENVAT credit availed on outward freight charges on the basis of audit observation that assessee had availed CENVAT credit of service tax paid on outward freight charges. The appellants in their reply dated 19.12.2012, in the first two paragraphs stated that they are submitting the details of input service tax credit taken on service tax paid on outward transportation from the factory gate to the job workers premises for further processing of their products. After seeing this reply, without taking note of the fact that according to the appellants letter the credit of service tax had been taken on the material sent for further rolling and therefore it cannot be called outward freight in respect of goods cleared from the factory gate, show-cause notice was issued on 29.05.2013 proposing to deny CENVAT credit of Rs. 8,07,284/- with interest and also imposition of penalty.
3. Original adjudicating authority observed that factory gate is the place of removal and therefore credit of service tax paid on freight charges towards outward transportation up to the place of consignee is not admissible. In fact he also observed that the judgment quoted by the assessee to Commissioner (Appeals) Mangalore deals with clearance of semi finished goods from the factory gate to the job workers premises and observes that this is not issue before him. This shows that the original adjudicating authority failed to take note of the letter written by the appellants.
4. The Commissioner (Appeals) also proceeded on the same ground and in the record of personal hearing he takes note of the fact that the letter dated 19.12.2012 was placed on record. Nevertheless the Commissioner (Appeals) observed that they have not proved their submissions.
5. The above observations would show that the original claim made by the appellants that they had cleared the goods to job workers was not verified before issue of show-cause notice and was subsequently held to be incorrect because the appellant did not prove. This is an offence case and departmental officers seem to think that appellant should anticipate the requirements of the department and produce evidence at every stage. The audit party nor the Range Officer nor the original authority insist on verification of the documents or ask for the documents to check the claim of the appellant whether it is correct. In my opinion the claim of the appellant which has not been contradicted on the basis of evidence in the form of statement, mahazar or transportation documents etc, no case has been made out by the Revenue. Accordingly the appeal is allowed with consequential relief, if any, to the appellants.
(Operative portion of the order has been pronounced in open court on 26.12.2014) (B.S.V. MURTHY) TECHNICAL MEMBER iss