GOVERNMENT OF INDIA

MINISTRY OF FINANCE
OFFICE OF THE DEPUTY COMMISSIONER CENTRAL EXCISE,
DIVISION-V(REWARI)
C. No. .

Dated :

.08.2014

SHOW CAUSE NOTICE NOM/s Rane NSK Steering Systems Ltd., Plot No. 28A, Sector-6, HSIIDC Growth
Centre, Bawal, Gurgaon, Haryana (hereinafter referred to as the Assessee), registered
with
Central
Excise
Department
under
Registration
Certificate
No.
AAACR4738FXM005, are engaged in the manufacture of Steering Column falling under
chapter heading no. 87089400 of the First Schedule to the Central Excise Tariff Act, 1985
(5 of 1986) and clearing their goods on payment of Central Excise Duty as applicable.
They are availing CENVAT credit on inputs, Capital Goods and input services under the
Cenvat Credit Rules, 2004 (here-in-after referred to as the CCR, 2004).
2.
Whereas, the audit of the assessee, for the year 2012-13, was conducted on 30th
May & 2nd June 2014 by the internal audit team of Central Excise, Delhi-III, Gurgaon.
During the scrutiny of the Assessees records, it was observed that the assessee has
availed Cenvat Credit on invoice dated 18.04.2012(RUD-1) and invoice dated 21.04.2012
(RUD-2) pertaining to Civil Work of the factory. The assessee has availed Cenvat Credit,
totally, amounting to Rs. 15,609/- in the aforesaid two invoices.

3.

Whereas as per Rule 2(l) of the Cenvat Credit Rules, 2004, it is stipulated that:-

(l)

"input service" means any service,(i)

used by a provider of taxable service for providing an output service; or

(ii)
used by the manufacturer, whether directly or indirectly, in or in relation
to the manufacture of final products and clearance of final products upto the place of
removal,

and includes services used in relation to setting up, modernization, renovation or

repairs of a factory, premises of provider of output service or an office relating to such
factory or premises, advertisement or sales promotion, market research, storage upto the
place of removal, procurement of inputs, activities relating to business, such as
accounting, auditing, financing, recruitment and quality control, coaching and training,
computer networking, credit rating, share registry, and security, inward transportation of
inputs or capital goods and outward transportation upto the place of removal;
but excludes(A) service portion in the execution of a woks contract and construction services
including services listed under clause (b) of Section 66E of the Finance Act
(herein after referred to as specified services) in so far as they are used for(a) construction or execution of works contract of a building or a civil
structure or a part thereof;
(b) laying of foundation or making of structures for support of capital
good,
except for the provision of one or more of the specified services; or
(B)
(BA)
(C.)
4.
Whereas, in terms of Rule 2(l) of the Cenvat Credit Rule, 2004, the Cenvat Credit
of the service tax paid on services of civil work is not admissible to the assessee. By way
of availing cenvat credit amounting to Rs. 15,609/- on inadmissible service, the assessee
has contravened the provisions of:(i)
Rule 2(l) of the Cenvat Credit Rules, 2004, in as much as they have wrongly
availed Cenvat Credit on inadmissible service i.e. civil work treating it as input service.
(ii)
Rule 3 of the Cenvat Credit Rules, 2004, in as much as they have wrongly
availed Cenvat Credit on inadmissible service.

9.
Whereas, in view of foregoing, the assessee is required to pay the amount of Rs.
15,609/-, equivalent to wrongly availed Cenvat Credit on inadmissible service i.e. civil
work, alongwith interest, in terms of Rule 14 of the CCR, 2004 read with Section 11AA
of the Central Excise Act, 1944, and penalty in terms of Rule 15 of the CCR, 2004 read
with Section 11AC of the Central Excise Act, 1944.

10.
Whereas, during the course of Audit, the assessee had the option to deposit the
Central Excise Duty, interest at applicable rate and penalty@1% per month (max 25% of
the duty amount) in terms of Section 11A(5) and Section 11A(6) of the Central Excise
Act, 1944. In order to avail the option under Section 11A(5) and Section 11A(6) of the
Central Excise Act, 1944, the assessee has to deposit the entire amount of Duty, interest
and penalty and inform the Central Excise Officer of such payment in writing. In terms of
Section 11A(7) of the Central Excise Act, 1944, the Central Excise Officer, on receipt of
information under sub-section (6) shall not serve any notice in respect of the amount so
paid and all proceedings in respect of the said duty shall be deemed to be concluded
where it is found by the Central Excise Officer that the amount of duty, interest and
penalty as provided under sub-section (6) has been fully paid. Since, the assessee has not
deposited the said entire amount of Duty, interest and penalty, as such, they failed to avail
the option in terms of Section 11A(5) and Section 11A(6) of the Central Excise Act,
1944.
11.
Whereas, it appears that assessee has deliberately kept the department in dark by
keeping the information aforementioned and suppressed the fact of wrong availment of
Cenvat Credit on inadmissible service with intend to evade payment of Central Excise
duty. Had the audit of the assessee not conducted by the internal audit group of Central
Excise, Delhi-III, Gurgaon, the fact of wrong availment of Cenvat Credit on inadmissible
service never came to the knowledge of the department. In view of the aforementioned
facts, it appears that the extended period of limitation provided under the first proviso of
Section 11 A(1) of Central Excise Act,1944 is invokable for recovery of the central
excise duty on the goods cleared by reason of fraud, collusion, willful suppression of
facts with intent to evade payment of duty.
12.
Whereas, it appears that the wrongly availed cenvat credit amounting to Rs.
15,609/- is recoverable from the assessee in terms of Rule 14 of the CCR04 read with
Section 11A of the Central Excise Act, 1944 alongwith interest under Section 11AA of
the Central Excise Act, 1944. It also appears that by contravening the provisions of Rule
2 and Rule 3 of the CCR04, the assessee have rendered themselves liable for penal
action under Rule 15 of the CCR04 read with Section 11AC of the Central Excise Act
1944.
13.
Now, therefore, M/s Rane NSK Steering Systems Ltd, Plot No. 28A, Sector-6,
HSIIDC, Growth Centre, Bawal, Rewari, Haryana, is hereby called upon to show cause
to the Deputy / Assistant Commissioner of Central Excise, Division-V (Rewari), DelhiIII, Gurgaon, having his office at , within thirty days of receipt
of this notice as to why:

i.
the wrongly availed and utilized cenvat credit amounting to Rs 15,609 (fifteen
thousand six hundred and nine only) should not be demanded and recovered from them
under Section 11 A(1) of Central Excise Act, 1944 read with Rule 14 of the CCR, 2004
by invoking the extended period read with Section 11A(4)(5) of the Act ibid.
ii.
Interest on the amount, mentioned at (i) above, should not be recovered from them
under Rule 14 of the CCR04 read with Section 11 AA of the Central Excise Act, 1944.
iii.
penalty should not be imposed upon them under Rule 15 of Cenvat Credit Rules,
2004 read with Section 11AC of the Central Excise Act 1944.
14.
The assessee is further directed to produce, at the time of showing cause, all the
evidence, documentary or otherwise, which they intend to rely upon in support of their
defence. The assessee should also indicate in their written submission as to whether they
wish to be heard in person or through their representative when the case is posted for
personal hearing.
15.
If no cause in shown against the action proposed to be taken within thirty days of
the receipt of this notice or they/their authorized representative fail to appeal for hearing,
the case will be decided on the basis of evidence and facts available on record.
16. This Show Cause Notice is being issued without any prejudice to any other action
that may be taken against them or any other person whether named have or not under the
provision of Central Excise law or any other law for the time being in force.

DEPUTY / ASSISTANT COMMISSIONER

CENTRAL EXCISE, DIVISION-V (REWARI).
Annexure-RUD-1 to RUD-2
Reg. A. D.
M/s Rane NSK Steering Systems Ltd,
Plot No. 28A, Sector-6, HSIIDC, Growth Centre, Bawal, Rewari, Haryana

Copy to:
1, The Deputy Commissioner (Audit), Central Excise, Delhi-III.
2. The Supdt.(Adj.), Central Excise, Division-V(Rewari), Gurgaon.
3. Guard File / Notice Board
Deputy Commissioner
Central Excise, Div-V (Rewari)