HUBERGROUP INDIA PVT LTD VERSUS C.C.E. & S.T.-DAMAN

Excise Appeal No. 10150 of 2021-SM

(Arising out of OIO-DMN-EXCUS-000-COM-043-20-21 Dated- 06/11/2020

passed by

Commissioner of Central Excise, Customs and Service Tax-DAMAN)

 

HUBERGROUP INDIA PVT LTD

VERSUS

C.C.E. & S.T.-DAMAN

WITH

Excise Appeal No. 10456 of 2021

(Arising out of OIO-DMN-EXCUS-000-COM-043-20-21 Dated- 06/11/2020

passed by

Commissioner of Central Excise, Customs and Service Tax-DAMAN)

SHRI SURESH NAIR

VERSUS

C.C.E. & S.T.-DAMAN

 

APPEARANCE:

Shri. S. Suriyanarayanan, Advocate for the Appellant

Shri. G. Kirupanandan, Superintendent (AR), for the Respondent

CORAM:

HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL)

Final Order No. A/ 10053-10054 / 2023

DATE OF HEARING: 03.01.2023

DATE OF DECISION:16.01.2023

RAMESH NAIR

This appeal is directed against the de novo order dated 29.10.2020

passed by the Commissioner, Central GST & Central Excise, Daman

Commissionerate whereby the learned Commissioner denied the Cenvat

Credit in respect of Education Cess and Secondary & Higher Education Cess

under the invoice issued by the 100% EOU.

Shri. S. Suriyanarayanan, learned Counsel appearing on behalf of the

appellant submits that the appellant had already reversed the Cenvat Credit

of Education Cess prior to show cause notice, thereafter, the same was also 

excluded while calculating the demand of Cenvat credit, hence, the

Education Cess and Secondary & Higher Education Cess was not the subject

matter of the show cause notice, accordingly, the impugned order denying

the Cenvat credit on Education Cess and Secondary & Higher Education Cess

is beyond the scope of show cause notice, hence, the same is not

sustainable. He further submits that there is substantial unutilized balance

of Cenvat credit in respect of Education Cess in the Cenvat account of the

appellant at the time of switching over to GST regime , hence, the credit

balance was lapsed, for this reason also demand is not sustainable.

Shri. G. Kirupanandan, learned Superintendent (Authorized

Representative) appearing on behalf of the revenue reiterates the finding of

the impugned order. He submits that there is no dispute that the appellant

at the relevant time was not eligible for Cenvat Credit on Education Cess and

Secondary & Higher Education Cess on the invoices issued by the 100%

EOU. The only plea of the appellant is that the denial of Cenvat credit in

respect of Education Cess and Secondary & Higher Education Cess is beyond

the scope of show cause notice . In this regards, he submits that in the show

cause notice the proposal to deny the Cenvat credit is not only in respect of

basic Custom duty but also of Education Cess. Therefore, it cannot be said

that in the order impugned a fresh case was made out by the learned

Commissioner. Hence, the demand was rightly confirmed in the impugned

order.

I have carefully considered the submission made by both the sides and

perused the records. I find that there is no dispute on merit that the

appellant was not eligible for Cenvat credit in respect of Education Cess and

Secondary & Higher Education Cess paid by the 100% EOU. The appellant’s

submission is that the denial of Education Cess was not subject matter of

show cause notice. On perusal of the show cause notice, I find that the

following proposal was made:-

“13. Now, therefore M/s. Micro Inks Limted, Morkhal Init-I, Survey

No. 11 & 13 Village Morkhal, Silvassa, are hereby called upon to show

cause to the Commissioner of Central Excise, Customs & Service Tax,

H.Q. Vapi 4th Floor Adarshdham Building, Daman Road, Vapi as to

why:-

(i)The CENVAT credit amounting to Rs. 2,27,27,871/- (BED Rs.

46,65,775/-, education Cess R. 1,29,89,792/- and SHE Cess Rs.

50,72,304/-) as detailed in Annexure-A wrongly availed by them

should not be demanded & recovered from them under Rule 14 of

Cenvat Credit Rules, 2004 read with proviso to Section 11A(1) of

the Central Excise Act, 1944.

(ii)

The interest should not be demanded & recovered from

them under Rule 14 of Cenvat Credit Rules, 2004 read with

Section 11AB of Central Excise Act, 1944. On the amount

demanded at Sr. No. (a) above. 

(iii)

Penalty shoul;d not be imposed under Rule 15(2) of

Cenvat Credit Rules, 2004 read with Section 11AC of Central

Excise Act, 1994”.

4.1 From the above proposal in the show cause notice, it can be seen that

the demand of Cenvat Credit is not only in respect of basic Excise duty but

also of Education Cess and Secondary & Higher Education Cess. Therefore, in

this fact it cannot be said that the order denying the Cenvat credit on

Education Cess and Secondary & Higher Education Cess is travelling beyond

the scope of show cause notice. Hence, the demand was rightly made by the

adjudicating authority.

As regard, the submission made by the learned Counsel that they had

accumulated unutilized credit of Education Cess and Secondary and Higher

Education Cess while switching over to the GST regime. I find that this fact

can be examined at the time of recovery of the amount confirmed in the

impugned order. Hence, I cannot give any conclusive finding on the said

submission.

As regard, penalty imposed on Shri. Suresh Nair employee of the

appellant’s Company. I find that the issue of correct calculation of Cenvat

Credit on the invoice issued by the 100% EOU was always in dispute,

therefore, malafide cannot be attributed to the employee of the Company in

the facts of the present case. Moreover, he is not beneficiary of any wrong

doing by the Company. Accordingly, considering the peculiar facts of the

present case , I find that the penalty Shri. Suresh Nair employee of the

Company cannot be imposed under Rules 26 of the Central Excise Rules,

2002. Hence, penalty on Shri. Suresh Nair is not sustainable , accordingly,

set aside.

As a result appeal of the Company bearing No. E/10156/2021 is

dismissed and appeal of Shri. Suresh Nair bearing No. E/10456/2021 is

allowed.

(Pronounced in the open court on 16.01.2023)

(RAMESH NAIR)

MEMBER (JUDICIAL)