Page 86 - GSTL_23rd April 2020_Vol 35_Part 4

412 GST LAW TIMES [ Vol. 35
“unprocessed knitted fabric” falling under Serial No. 165 of Exemption No-
tification No. 6/2000, dated 1-3-2000, attracting nil rate of duty as also un-
der Notification Nos. 5/96 and 18/96. These appeals are bereft of any merit
and are, therefore, dismissed accordingly, leaving the parties to bear their
own costs.
Similarly, we find that the Apex Court in the case of Prince Khadi Woollen Hand-
loom Prod. Coop. Indl. Society (supra) have held that -
2. It does not appear that at any stage of the proceedings the appellants
had been required to show that the factories in which they produced the
woollen fabrics were owned by them. The order of the Tribunal refusing
them the exemption on this ground must, therefore, be set aside.
3. If it is the case of the Revenue that the appellants are not entitled to the
benefit of the exemption under the said notification by reason of the fact
that the appellants do not own the factories in which the woollen fabrics are
produced, the Revenue must give to the appellants a notice to show cause
in this regard and the matter must be processed from that stage.
7. We find that by applying the ratio of the above judgments, the Ld.
Counsel submits that the Commissioner has gone beyond the scope of the show
cause notice while passing the impugned order whereas the Ld. AR vehemently
opposes the contentions and says that only when the appellants have submitted
that a part of the demand has been paid through Cenvat credit, Ld. Commission-
er had to go into the issue to find that Ld. Commissioner held that the condition
for allowance of Cenvat credit in respect of input service is as per Rule 4(7) of the
Cenvat Credit Rules, 2004. He holds that for availing of Cenvat credit, the noticee
must pay the value of input service check with the documents submitted by the
appellants as to the correctness of their claim. In case, the Ld. Commissioner
felt/found that any of the claim of the appellants about the payment were incor-
rect, he has given a finding on the same without going into the liability of the
Cenvat credit. We find that for this issue, it is required to go through the claim of
the appellants about the arithmetical correctness of the duty paid by them
through Cenvat credit, verification needs to be undertaken by the Adjudicating
Authority. For this reason, the issue needs to travel back to such Authority.
8. Coming to the issue of admissibility of cum-duty value while com-
puting the duty liability, the Ld. AR submits that in view of the suppression of
facts resorted by the appellants, such benefit cannot be extended in view of the
findings of the certain fora. However, we find that the appellants are a Public Sec-
tor Undertaking and as such, as held by the Tribunal as well as various Courts
mens rea cannot be assumed in respect of PSUs. It was consistently held that no
particular person or officer could be benefited by such suppression/misdeclara-
tion by the Organization. Therefore, we find that the appellants are entitled to
the benefit of cum-duty price. The amounts received by them by the appellants
from their customers should be treated to be inclusive of Service Tax and accord-
ingly, the liability of Service Tax recalculated. For this purpose, also the im-
pugned order needs to go back to the Adjudicating Authority. In view of our
findings suppression, etc., cannot be imputed to the appellant. Penalty imposed
is not sustainable however, they shall be liable to pay interest on the duty arise at
in terms of the above. It is needless to say that the appellants shall be provided
with an opportunity to be heard/represented.
9. In view of the above, we allow the appeal by way of remand to the
Adjudicating Authority.
(Dictated and pronounced in open Court)
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