2010 (7) TMI 242 - AT - Central Excise

Cenvat Credit - The original authority denied the credit of Rs. 3,19,302 and order recovery of the same along with interest and imposed equal amount as penalty. Commissioner (Appeals) partly allowed the appeal. The assessee contended that substantial part of the demand relates to Service Tax paid on insurance premium which was alleged to be relating to cars. The Service Tax credit taken relating to insurance of cars was to the tune of about Rs. 27,000 only and rest of the credit relates to other insurance services. Held that - order of Commissioner (Appeals) insofar as same related to denial of credit and imposition of equal amount of penalty was to be set aside and matter was to be remanded to original authority for re consider claim of assessee.

Summary

Issues: Denial of credit, recovery of amount, imposition of penalty

Denial of Credit:
The original authority denied the credit of Rs. 3,19,302, leading to recovery of the same along with interest and imposition of an equal amount as a penalty. The Commissioner (Appeals) partly allowed the appeal, confirming a demand of Rs. 1,98,675 along with interest and upholding the penalty of an equal amount. The appellants argued that a substantial part of the demand was related to Service Tax paid on insurance premium for various services, such as plant, machinery, electrical insulation, building, power plant, and machinery breakdown, not just cars. However, this specific breakdown was not presented before the original authority or the Commissioner (Appeals), causing inconvenience. The breakdown of insurances was being presented before the Tribunal for the first time by the appellants' representative.

Remand and Evidence Submission:
Considering the facts and circumstances, the Tribunal set aside the Commissioner (Appeals) order related to the denial of credit and imposition of penalty. The matter was remanded to the original authority for reconsideration of the appellants' claim. The appellants were directed to produce the evidence supporting their claim within 45 days. The original authority was instructed to issue a decision within 2 months after the expiry of the time limit for the submission of the defense reply by the appellants and after providing a reasonable opportunity for a hearing.

Conclusion:
The appeal was allowed through remand, with the stay petition also being disposed of. The Tribunal's decision aimed to ensure a fair consideration of the appellants' claim regarding the denied credit, emphasizing the need for presenting all relevant evidence and arguments before the authorities for a just resolution.