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2017 (11) TMI 279 - AT - Central ExciseCENVAT credit - services which is in connection of shifting and setting of a new plant from Bhandup to Taloja and there to present location of the appellant - Held that - Since the entire service is within the units of the appellant themselves and finally by availing such services the plant was setup in the factory of the appellant, therefore the services received in connection of sifting and setting of plant is admissible input services and credit is available - Moreover, even if it is accepted that the credit related with the unit either Bhandup or Taloja, in terms of Rule 10 of CENVAT Credit Rules, 2004 it is allowed to be transferred to unit where the factory is shifted. For this reason also credit cannot be denied - credit allowed. Penalty - non-reversal of CENVAT credit in respect of job work goods though the appellant had paid the CENVAT credit but interest was not paid - Held that - there is no provision in the Act and Rules made there under for imposition of penalty for non-payment of interest. In absence of any such provision the demand of penalty of ₹ 94,750/- does not sustain and the same is set aside. Penalty - excess credit availed - Held that - as per the fact of the case, on pointing out the discrepancy of the Audit party, appellant have admittedly reversed credit of ₹ 89,478/-. It is also noticed that there is no adjudication of any amount of CENVAT credit on this count. In absence of any determination of demand in terms of Section 11A(1), no penalty under Section 11AC can be imposed. Appeal allowed in part.
Issues:
1. Availment of CENVAT credit for services related to plant shifting. 2. Imposition of penalty for non-reversal of CENVAT credit for job work goods. 3. Imposition of penalty without determination of demand of CENVAT credit. 4. Availment of excess CENVAT credit and corresponding penalty. Analysis: Issue 1: Availment of CENVAT credit for services related to plant shifting The appellant availed CENVAT credit of ?2,46,325 for services related to shifting and setting up a new plant. The appellant argued that the credit was related to setting up the plant at their factory location, making it an admissible input service. The Tribunal agreed, stating that even if the credit was related to a different unit, Rule 10 of CENVAT Credit Rules allowed for transfer to the unit where the factory was shifted. Consequently, the demand for ?2,46,325 and the corresponding penalty were set aside. Issue 2: Penalty for non-reversal of CENVAT credit for job work goods A penalty of ?94,750 was imposed for non-payment of interest on the reversal of CENVAT credit for job work goods not received within 180 days. The appellant contended that there was no provision for imposing a penalty for non-payment of interest, and the Tribunal agreed, setting aside the penalty. Issue 3: Penalty without determination of demand of CENVAT credit Another penalty of ?92,394 was imposed without a determination of the demand of CENVAT credit. The Tribunal noted that the appellant had reversed the credit disputed by the audit party, and as there was no adjudication of the demand under Section 11A(1), the penalty under Section 11AC could not be imposed. Therefore, the penalty was set aside. Issue 4: Availment of excess CENVAT credit and corresponding penalty The appellant admitted liability for availing excess CENVAT credit of ?2,425. Consequently, the demand for this amount along with interest and penalty was upheld. In conclusion, the Tribunal modified the impugned order by allowing the appeal in part based on the above findings, with the final decision pronounced on October 13, 2017.
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