2018 (12) TMI 1851 - AT - Central Excise

CENVAT Credit - allegation that the assessee had availed/utilized inadmissible Cenvat Credit in contravention of Notification No.20/2007- CE dated 25/04/2007 - HELD THAT - During the period in dispute, out of total Centvat Credit availed by the appellant, an amount of ₹ 75,15,568/- was pertaining to various input services for which the appellant assessee discharged Service Tax on 31/03/2014 as a recipient of Service under the Reverse Charge Mechanism (RCM) in terms of Rule 6 of the Service Tax Rules, 1994. The said credit was availed in the Cenvat Register in the month of April 2014. The issue is no more res-entigra in view of the decision of the Tribunal in the case of VINAYAK INDUSTRIES VERSUS COMMISSIONER OF C. EX. S.T., JAMMU KASHMIR 2014 (3) TMI 1033 - CESTAT NEW DELHI where it was held that credit is allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availment of inadmissible Cenvat Credit under Notification No.20/2007-CE dated 25/04/2007.
2. Adjudication Order by the Ld. Commissioner (Appeals) upholding the recovery of the inadmissible credit.
3. Appeal before the Tribunal challenging the Adjudication Order.

Analysis:

Issue 1: Availment of inadmissible Cenvat Credit under Notification No.20/2007-CE dated 25/04/2007
The appellant, located in Meghalaya, claimed a refund under Notification No.20/2007-CE for duty paid in April 2014, excluding Cenvat Credit utilization. However, a Show Cause Notice alleged the appellant availed inadmissible Cenvat Credit of ?75,15,568, contrary to the Notification. The credit pertained to various input services on which Service Tax was paid under the Reverse Charge Mechanism in March 2014. The Tribunal noted that the issue was settled in a previous case, emphasizing a revenue-neutral scenario due to varying duty payments through Cenvat credit and Payment of Excise Duty (PLA). The appellant's plea of no intention to avail higher exemption was accepted, leading to setting aside the impugned order and allowing the appeal with consequential relief.

Issue 2: Adjudication Order by Ld. Commissioner (Appeals)
The Adjudication Order, upheld by the Ld. Commissioner (Appeals), directed recovery of the inadmissible Cenvat Credit along with interest based on the alleged contravention of Notification No.20/2007-CE. However, the Tribunal, after detailed analysis and perusal of records, found that the appellant's case aligned with a previous Tribunal decision, establishing a revenue-neutral position due to fluctuating duty payments through Cenvat credit and PLA. Consequently, the Tribunal set aside the impugned order and allowed the appeal, providing relief to the appellant.

Issue 3: Appeal before the Tribunal
Following the adverse decision by the Ld. Commissioner (Appeals), the appellant approached the Tribunal seeking redressal against the recovery order for the inadmissible Cenvat Credit. The Tribunal, after hearing both sides and scrutinizing the appeal records, found merit in the appellant's case based on the established revenue-neutral position and the absence of intention to avail higher exemption. Consequently, the Tribunal allowed the appeal, providing consequential relief to the appellant, as pronounced in the court on 14/12/2018.

This comprehensive analysis of the issues involved in the legal judgment highlights the key aspects of the case, the Tribunal's findings, and the ultimate decision in favor of the appellant based on the established legal principles and precedents.