The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed Show Cause Notice (SCN) and held that Central Excise Department cannot decide if activities amounted to manufacture or not.
M/s RMC Switch Gears Ltd, the appellant filed the appeal to assail the order passed by the Commissioner (Appeals), CGST & Central Excise, whereby he upheld the orderpassed by the Deputy Commissioner and rejected the appellant’s appeal.
The appellant is registered with the central excise department and manufactures boards, panels, cabinets etc. and pays central excise duty. It also avails Cenvat credit as per rules. During the investigation initiated at M/s Bhushan Steels Ltd., Ghaziabad who supplied HR Coils and other inputs to the appellant, it appeared that M/s Bhushan Steels had undertaken processes which did not amount to manufacture but had paid central excise duty.
It further appeared that the duty so paid cannot be termed as duty, but only as an amount under section 11D of the Central Excise Act, 1944, which must be deposited with the Central Government. A show cause notice was issued proposing to deny Cenvat credit to the appellant on the above invoices on the ground that Rule 3 of the Cenvat Credit Rules, 2004 provides for credit of duty of excise, but not the credit of an amount deposited under section 11D.
The Authorized Representative for the Revenue supported the impugned order and vehemently argued that the CCR provide for credit of duty excise paid and not for credit of any amount paid. He submits that when the activity of M/s Bhushan Steels did not amount to manufacture at all, it was not required to pay any duty of excise.
The Coram consisting of observed that “The officer who issued the SCN had jurisdiction over the appellant and not over M/s Bhushan Steels. Therefore, in the first place the Jurisdictional Officer cannot decide or determine if the activities of M/s Bhushan Steels amounted to manufacture or not. Therefore, the SCN itself was issued without any authority of law.”
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