9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (7) TMI 466 - AT - Central ExcisePenalty under Rule 15(4) of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 - Demand of interest under rule 14 of the Cenvat Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944 - The appellants are availing Cenvat Credit of duty paid on inputs and capital goods as well as Service Tax paid on input services under Cenvat Credit Rules, 2004 - Appellant had paid service tax in terms of Section 66A of the Finance Act, 1994 read with Rule 2(d )( iv) of Service Tax Rules, which was paid as recipient of services on commission paid to foreign agents M/s. Matrix Resources PTE Ltd., Singapore in connection with purchase of Nickel - Appellant availed Cenvat Credit of the said Service Tax even though they had not received physical delivery of the Nickel in their factory - Services were utilized for trading activity but were not used directly or indirectly in manufacturing activity - Held that - As per the decision in COMMISSIONER OF C. EX., JAIPUR-I Versus PUSHP ENTERPRISES 2010 (11) TMI 835 - CESTAT, NEW DELHI , the ER-1 Returns disclosed the availment of Cenvat Credit but since there is no requirement for enclosing the invoices or giving the details of such credit - Once ER-1 Return is filed, even though it is filed under self-assessment system, the officers are supposed to scrutinize the same Appellant taken Cenvat credit in respect of certain input services, which according to the Department was not admissible to them, it cannot be concluded that the credit had been taken knowing very well that the same was not admissible, unless there is some evidence in this regard - Moreover, when the quantum of service tax credit availed had been disclosed, the officers were always free to inquire from the respondent about details of the same and satisfy themselves about its correctness Appeal allowed Decided in favor of Assessee.
Issues:
1. Availment of Cenvat credit on service tax paid for commission to foreign agents. 2. Allegation of suppression of facts and demand for reversal of Cenvat credit. 3. Imposition of interest and penalty under Cenvat Credit Rules, 2004 and Central Excise Act, 1944. 4. Dispute regarding the limitation period for the show-cause notice. 5. Contestation of penalty imposition under Rule 15 for wrong availment of Cenvat credit on input services. 6. Examination of bona-fide belief of the appellant in availing the Cenvat credit. Analysis: Issue 1: Availment of Cenvat credit on service tax paid for commission to foreign agents The appellant availed Cenvat credit of service tax paid on commission to foreign agents under the reverse charge mechanism. The Tribunal examined whether the appellant had a bona-fide belief while availing the credit. The appellant paid commission for procurement of Nickel, intending to use it in future business activities. The Tribunal found that the appellant had discharged service tax liability regularly, filed returns, and abided by the law, indicating no intention to evade duty. Issue 2: Allegation of suppression of facts and demand for reversal of Cenvat credit The appellant was alleged to have availed Cenvat credit on services not directly or indirectly used in manufacturing activities, leading to a demand for reversal of Cenvat credit. The lower authorities confirmed the demand, interest, and imposed penalties. However, the Tribunal found no suppression of facts by the appellant, as they had regularly filed returns and complied with the law, leading to the set-aside of the demand. Issue 3: Imposition of interest and penalty under Cenvat Credit Rules, 2004 and Central Excise Act, 1944 The adjudicating authority imposed interest and penalties on the appellant, which were upheld by the First Appellate Authority. The appellant contested the interest and penalties, citing limitations and lack of provision under the Central Excise Act, 1944. The Tribunal reviewed the contentions and found in favor of the appellant, setting aside the penalties and interest imposed. Issue 4: Dispute regarding the limitation period for the show-cause notice The appellant argued that the show-cause notice was time-barred, as it was issued after the period of improper utilization of Cenvat credit. The Tribunal considered this argument and set aside the show-cause notice, ruling in favor of the appellant. Issue 5: Contestation of penalty imposition under Rule 15 for wrong availment of Cenvat credit on input services The appellant contested the penalty imposition under Rule 15, arguing that it applied only to wrong availment of credit on inputs and capital goods, not input services. Citing relevant case law, the Tribunal agreed with the appellant's position and set aside the penalty imposed under Rule 15. Issue 6: Examination of bona-fide belief of the appellant in availing the Cenvat credit The Tribunal thoroughly examined whether the appellant had a bona-fide belief while availing the Cenvat credit on service tax paid for the commission to foreign agents. Considering the appellant's regular compliance with filing returns and discharging service tax liabilities, the Tribunal concluded that there was no suppression of facts or intention to evade duty, leading to the allowance of the appeal. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision on each aspect of the case.
|
