Order Date – 16 January 2023

Parties: Hubergroup India Pvt Ltdand Shri Suresh Nair Vs C.C.E. & S.T.-Daman 

Facts –

• The Appellant, Hubergroup India Pvt Ltd and Shri Suresh Nair (Employee), were issued with a show casue notice denying Cenvat credit in respect of Education Cess and Secondary & Higher Education Cess paid by the 100% EOU.
• The appellant had already reversed the Cenvat Credit of Education Cess prior to show cause notice. 

Issues –

• Whether the show cause notice issued after reversing the Cenvat credit is in order?

Order –

• The Tribunal held that on perusal of the show cause notice it can be seen that the demand of Cenvat Credit is not only in respect of basic Excise duty but also of Education Cess and Secondary & Higher Education Cess. Therefore, in this fact it cannot be said that the order denying the Cenvat credit on Education Cess and Secondary & Higher Education Cess is travelling beyond the scope of show cause notice. Hence, the demand was rightly made by the adjudicating authority.
• It was also held that the issue of correct calculation of Cenvat Credit on the invoice issued by the 100% EOU was always in dispute, therefore, malafide cannot be attributed to the employee of the Company in the facts of the present case. Moreover, he is not beneficiary of any wrong doing by the Company.
• Hence the penalty Shri. Suresh Nair employee of the Company cannot be imposed under Rules 26 of the Central Excise Rules, 2002. Hence, penalty on Shri. Suresh Nair is not sustainable, accordingly, set aside.