The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ordered to conduct of a fresh adjudication since the duty was demanded on the value of exempted goods without considering evidence of maintaining separate accounts for dutiable and exempted goods.
M/s. M. B. Control & Systems Pvt. Ltd, the Appellant is a manufacturer of Control Panel & Spare Parts thereof falling under CETSH No.85389000 and some other items. They claimed they have cleared the inputs on payment of Excise Duty and they also supply their finished goods to Indian Navy. The Appellants are also manufacturing and clearing the goods under Nil Excise Duty availing the benefit under Notification No.10/97-CE dated 01.03.1997 and Notification No. 64/95 dated 16/3/1995.
The Department investigated and found that they were not maintaining separate records for the inputs being used in the manufacture of dutiable goods and the exempted goods. The Appellant on being pointed out about this mistake, paid the amounts of demand and closed the issue.
After this, the Appellant has started maintaining separate records for the inputs being used in the manufacture of dutiable and exempted goods. As per the new system of maintaining separate accounts, they are not taking the Cenvat Credit for the inputs used in the manufacturing of goods during the period 2013-14.
The Department officials visited their unit on 03/02/2014 and asked them to submit documentary evidence for maintaining separate accounts for dutiable and exempted goods. The Appellant submitted that in view of the accident sustained by the concerned official, they were not able to produce the record immediately but they will do so after some time. The Appellant submitted the complete details of inputs on which no Cenvat Credit was taken by them. They also enclosed copies of the invoices.
The Department issued a Show Cause Notice demanding 5%/6% of the value of the exempted goods wherein the duty demand was worked out to Rs.5,35,489/-. After due process, the lower authorities confirmed the demand along with interest and penalty.
It was contended by the appellant that the lower authorities failed to consider the detailed letter along with the statement and invoices submitted. They have taken more than 85 days to submit their documents which gives rise to the doubt that the same was prepared subsequently.
It was viewed that the Appellant is required to be given one more opportunity to present these documents before the Adjudicating Authority.
A single-member bench comprising Mr. R. Muralidhar, (Judicial) remanded the matter to the Adjudicating Authority. “The Appellant should produce the RG23A Part 1 & Part 2 Books as well as photocopies of the same before the Adjudicating Authority along with statement and copies of the invoices which they claim about inputs used for exempted goods and Cenvat was not taken by them.”, the CESTAT held.
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