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CX – Commissioner has, without justification, recorded a finding for period which was not the period involved in the SCN – AA cannot go beyond the SCN: CESTAT

2019-TIOL-2397-CESTAT-BANG

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, BANGALORE

Appeal No. E/20583/2016-SM

Arising out of Order-in-Original No. BEL-EXCUS-000-COMBHR-032-15-16, Dated: 17.03.2016
Passed by Commissioner Of Central Excise, Customs and Service Tax , BELGAUM

Date of Hearing: 14.02.2019
Date of Decision: 14.02.2019

HIRANYAKESHI S S K NIYAMIT
SANKESHWAR, HUKKERI BELGAUM – 591314
KARNATAKA

Vs

COMMISSIONER OF CENTRAL EXCISE
CUSTOMS AND SERVICE TAX BELGAUM NO. 71…CLUB ROAD
CENTRAL EXCISE BUILDING, BELGAUM, – 590001
KARNATAKA

Appellant Rep by: Shri J N Somaiya Adv.
Respondent Rep by: Shri Gopa Kumar, Jt. Commissioner AR

CORAM: S S Garg, Member (J)

CX – SCNs issued on the electricity sold to power distribution companies during the period October 2012 to February 2015 – demands dropped – however, in para 24 of the impugned order, the Commissioner has observed that provisions of Rule 6 of the Cenvat Credit Rules, 2004 are attracted for the clearances of electricity for a consideration by the assessee w.e.f. 1.3.2015 – appeal against this observation.

Held: Commissioner has, without justification, recorded the above finding for the clearances w.e.f. 1.3.2015, which was not the period involved in the present case and there was no SCN for the period after the amendment – by following the ratio of the decisions [Hindustan Polymers Co. Ltd. – 2002-TIOL-822-SC-CX, Kandarp Dilipbhai Dholakia – 2014-TIOL-2719-HC-AHM-CX, Manjit Singh – 2013-TIOL-989-CESTAT-MUM, Hi-Tech Electronics Industries – 2010-TIOL-1274-CESTAT-DEL, DHL Logistics Pvt. Ltd. – 2014-TIOL-1386-CESTAT-MUM, ND Metal Industries Ltd. – 2013-TIOL-1017-CESTAT-AHM], wherein it has been held that the adjudicating authority cannot go beyond the SCN, para 24 in the order portion is not sustainable in law and, therefore, set aside – appeal is accordingly allowed : CESTAT [para 6]Appeal allowed

Case laws cited:

Hindustan Polymers Co. Ltd – 2002-TIOL-822-SC-CX… Para 4

Kandarp Dilipbhai Dholakia Vs. CCE – 2014-TIOL-2719-HC-AHM-CX… Para 4

Manjit Singh Vs. CCE – 2013-TIOL-989-CESTAT-MUM… Para 4

CCE Vs. Hi-Tech Electronics Industries – 2010-TIOL-1274-CESTAT-DEL… Para 4

DHL Logistics Pvt. Ltd. Vs. CCE – 2014-TIOL-1386-CESTAT-MUM… Para 4

ND Metal Industries Ltd. Vs. CCE – 2013-TIOL-1017-CESTAT-AHM… Para 4

FINAL ORDER NO. 20164/2019

Per: S S Garg:

The present appeal is directed against the impugned order dt. 17/03/2016 passed by the Commissioner(Appeals) whereby the Commissioner(Appeals) has dropped the proceedings initiated against the assessee under various show-cause notices but held that Rule 6 of CENVAT Credit Rules, 2004 (CCR) are attracted for the clearances of electricity for a consideration by the assessee w.e.f. 01/03/2015.

2. Briefly the facts of the present case are that the appellants are engaged in the manufacture of sugar, molasses falling under Chapter 17 of the CETA, 1985. They have co-generation plant in their factor where they are generating electricity and part of the said electricity sold to outside agency and the remaining part of the electricity is used by them in or in relation to the manufacture of their final product. Three show-cause notices were issued proposing to demand and recover the amount of Rs.7,57,43,756/- along with interest and penalty being an amount equal to 10% / 5% / 6% of the total amount received as value of electricity sold to power distribution companies during the period from October 2012 to February 2015. After following due process, the Commissioner vide Orderin- Original dt. 17/03/2016 dropped the demand involved in all the three show-cause notices by relying upon the judgment of the Hon’ble Supreme Court but while allowing the appeal, he has observed in para 24 of the impugned order (order portion) that provisions of Rule 6 of the CCR are attracted w.e.f. 01/03/2015, which according to the appellant was not required at all.

3. Heard both sides and perused records.

4. Learned counsel for the appellant submitted that appellant is only aggrieved by para 24 of the order portion wherein the Commissioner has observed that provisions of Rule 6 of the CCR are attracted for the clearances of electricity for a consideration by the assessee w.e.f. 01/03/2015. He further submitted that the period involved before the Commissioner was from October 2012 to February 2015 and there was no reason to record the finding in respect of the demand for a period which is not involved in the case. He further submitted that para 24 in the order portion is clearly beyond the scope of the show-cause notices and therefore not sustainable in law. He also submitted that it has been consistently held by various courts that the adjudicating authority cannot go beyond the allegations in the show-cause notice and pass order beyond the show-cause notice. In support of this submission, he relied upon the following decisions:-

i. Hindustan Polymers Co. Ltd. [1999(106) ELT 12 (SC)] = 2002-TIOL-822-SC-CX

ii. Kandarp Dilipbhai Dholakia Vs. CCE [2014(307) ELT 484 (Guj.)] = 2014-TIOL-2719-HC-AHM-CX

iii. Manjit Singh Vs. CCE [2015(323) ELT 377] = 2013-TIOL-989-CESTAT-MUM

iv. CCE Vs. Hi-Tech Electronics Industries [2014(314) ELT 689] = 2010-TIOL-1274-CESTAT-DEL

v. DHL Logistics Pvt. Ltd. Vs. CCE [2014(36) STR 874] = 2014-TIOL-1386-CESTAT-MUM

vi. ND Metal Industries Ltd. Vs. CCE [2013(292) ELT 520] = 2013-TIOL-1017-CESTAT-AHM

5. On the other hand, the learned AR defended the impugned order.

6. After considering the submissions of both sides and perusal of material on record, I find that in the impugned order, the Commissioner, in para 23, has dropped all the demands raised against the appellant in the show-cause notices but in para 24, he has, without any justification, recorded the finding that the provisions of Rule 6 of CCR are attracted for clearances w.e.f. 01/03/2015 which was not the period involved in the present case and there was no show-cause notice for the period after the amendment. In view of the decisions cited supra, wherein it has been held that the adjudicating authority cannot go beyond the show-cause notice. By following the ratio of the said decisions, I am of the view that para 24 in the order portion is not sustainable in law and therefore I set aside this part of the impugned order. Rest of the order remains intact. Appeal is accordingly allowed.

(Operative portion of the Order was pronounced in Open Court on 14.02.2019)

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