The Commissioner Of GST vs. M/S. Sunbeam Generators

Facts

The Commissioner of GST and Central Excise, Puducherry Commissionerate (Appellant/Revenue) filed a Civil Miscellaneous Appeal before the Madras High Court challenging an order dated 21.03.2018 passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had set aside an order in original dated 31.01.2013 passed by the Adjudicating Authority. The dispute concerned the eligibility of CENVAT credit availed by M/s.Sunbeam Generators Pvt Ltd. (Respondent/Petitioner) on supplementary invoices issued by M/s.Doosan International India Pvt. Ltd. The Revenue alleged that the supplier was involved in an offence case for non-payment of SAD portion on removal of inputs as such, with intent to evade duty. The tax effect in this case was stated to be less than Rs.1,00,00,000/-.

Held

The Court noted the Instruction issued by the Central Board of Indirect Taxes and Customs dated 22 August 2019, which stipulates that appeals shall not be filed or pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/-. In the present case, the tax effect was stated to be less than this monetary limit. Consequently, the Court dismissed the Appeal filed by the Revenue as withdrawn. The Court explicitly stated that the substantial question of law remains open for determination in appropriate cases. No order as to costs was made.

Key Issues

1. Whether the Hon'ble CESTAT was right in setting aside the order in Original No.02/2013(C) dated 31.01.2013 passed by the Adjudicating Authority, inasmuch as the Respondent availed ineligible credit on supplementary invoices issued by M/s.Doosan International India Pvt. Ltd., who had allegedly committed an offence case for non-payment of SAD Portion on removal of inputs as such with intent to evade payment of duty? (This issue turns on the interpretation of provisions related to eligibility of CENVAT credit and supplier's conduct). 2. Whether the Hon'ble CESTAT is correct in passing an order that is not in consonance/conformity with the provision of Rule 9(b) and 9(5) of Cenvat Credit Rules, 2004? (This issue turns on the interpretation of Rule 9(b) and 9(5) of Cenvat Credit Rules, 2004). Contentions: Petitioner/Respondent: The judgment does not record any specific arguments made by the Respondent regarding the merits of the case. Revenue/Appellant: The Revenue argued that the CESTAT erred in setting aside the adjudication order and that the Respondent had availed ineligible credit. They also contended that the CESTAT's order was not in conformity with Rule 9(b) and 9(5) of the Cenvat Credit Rules, 2004. The Revenue also brought to the court's notice an instruction from the Central Board of Indirect Taxes and Customs dated 22 August 2019.