The Bombay High Court ordered the Hindustan Coca-Cola Beverage to reply cause-cum-demand notice alleging wrongful availment of CENVAT credit worth Rs.2.02 Crores.
The Petitioner, Hindustan Coca-Cola Beverage has been engaged in the business of manufacturing, selling and distribution of beverages under the brand name of Coca-cola, Thumbs Up, Sprite, Fanta, Limca etc.
The investigation was initiated in August, 2018 by the Directorate General of GST Intelligence, Mumbai Zonal Unit in relation to the CENVAT credit availed of by the petitioner in respect of service tax paid on transportation charges incurred for transportation of the products from the factories to the premises of the customers on the ground that the said service availed by the petitioner was not an eligible input service as per provisions of rule 2(l) of the CENVAT Credit Rules. During the course of investigation, statements of several officers of the petitioner were recorded by the investigating authorities.
Consequently, respondent authority issued the show cause-cum-demand notice which has been assailed by the petitioner on several grounds.
Firstly, CENVAT credit on outward goods transport agencies (GTA) is eligible to the petitioner even post March 1, 2008. It is contended that respondent No.3 failed to appreciate that petitioner is eligible to avail CENVAT credit of service tax paid on transportation charges incurred for transportation of its products from its factories / depots to the customer places.
Secondly, the investigation and the consequential show cause-cum-demand notice pertain to alleged wrongful availment of CENVAT credit of outward transportation beyond the place of removal. Respondent has invoked the extended period of limitation under section 11A(4) on the ground that petitioner with mala fide intent to avail ineligible CENVAT credit had fraudulently contravened various statutory provisions.
Thirdly, the allegation of suppression of facts is totally incorrect and misplaced. Therefore, the question of invoking an extended period of limitation does not arise.
The division bench of Justices Ujjal Bhuyan and Milind N.Jadhav observed that it would be more appropriate if petitioner responds to the impugned show cause-cum-demand notice by filing reply and thereafter if respondent is not satisfied with the show cause reply, the matter may be adjudicated by the adjudicating authority as adjudication on the show cause-cum-demand notice would require dealing with a wide range of issues involving facts and factual aspects.
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