Two queries on excise ea2000 audit raised points

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This query is : Resolved

Santosh B Karangutkar (Querist)

02 January 2012 I need your help/guidance to give appropriate reply to Excise Authorities, the points which has been arriving in EA2000 audit held at our premises.

# 1. Nonpayment of an amount equal to 10% on executed clearance as required U/R 6 of cenvat Cex Rule 2006
Details Explanation from our side:- We have sale transaction under 6/2006 despatch under PAC – International Competitive Bidding – under 91 chapter executed with Nil duty, Excise Authorities having objection that they told on Cenvat Input – by oversight we have taken two Service Invoices consider in Service Tax Input and taken credit in account of Cenvat Input amount hardly not more than 10K.
And they ask us to paid the 10% period 2009-10 (up to 27.02.2010 new notification release for considering cenvat credit for the PAC 6/2006) - Total sales during the period amounting Rs. 22,68,80,208/- and ask us to make the payment @10% Rs. 2,26,88,011/- + interest 69,46,201/-
Pls guide how to avoid the same.

# 2 Praposionate reversal of input service credit on High Sea Sale held from 2006-07 to 2010.
Details Explanation form our side:- Under the trading sales they told us to that reverse the praposionate input service credit.
Pls advice on the same.

K Santosh - 9820271068

NILESHKUMAR

NILESHKUMAR (Expert)

03 January 2012 Your query no. 1 is not clear to me . You have made hothpoch. If possible send me query memo issued by Audit Team .

However whatver I understood from your query is that you have supplied against project authority certufucate ? Under Notification No. 6/2006 CE , supply against ICB are exempted from payment of excise duty subject to obtaining certificate from juridictional Central Excise authority and fulfilling conditions No. 19 to the notifications. It is not clear from your query that you haveused imported goods into manufacture of final product or toerhwise. Hope you understand.
In absence of proper proper SCN/ query memo it is difficult to comment on such typical issue.

If you have availed Cenvat on inputs and cleared against ICB , no need to reversal of Cenvat credit availed.

No.2.
No need to reverse service tax amount. This views are supported by tribunal as per the following case laws

• 2010 (256) E.L.T. 420 (Tri. - Del.)- A R Castings V. CCE
• 2010 (260) E.L.T. 521 (P & H) –CCE v/s Punjab Steels
• 2010 (250) E.L.T. 529 (Tri. - Del.) -Bansal Alloys & Metals Ltd. v/s CCE
• 2010 (19) S.T.R. 369 (Tri. - Del.) -Bassi Alloys P. Ltd. v/s CCE

Thanks
NILESHKUMAR
B.Com, LLM, MBA (Fin), CWA
Advocate and consultant
Central Excise, Service Tax, Customs and Foreign Trade Policy (EXIM)

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