2015 (7) TMI 929 - AT - Service Tax

Denial of CENVAT Credit - Imposition of penalty - They also contended that excess utilized credit was paid back in cash and that even before the issue of shown cause notice. So no extended period was invokable nor was rule 15(2) of Cenvat Credit Rules 2004 or Section 11AC consequently no penalty was imposable. - Held that - Commissioner (Appeals) has examined the issue in detail and concluded the issue in favour of revenue. Fraud has clearly manifested and has also been admitted. Extended period has rightly been involved. Penalty is also imposable as intent to defraud the revenue is very clear. Since both dutiable and exempted products were being manufactured, credit availment was to be restricted to 20% of ₹ 372126.69/-. - Decided against the assessee. Appellant has also raised the issue of refund of excess amount. There is no such issue discussed in Commissioner (Appeals) s Order. In present grounds of appeal also, no specific calculation is pointed out fortifying their claim for refund. This issue has also not been vehemently taken up in earlier stage. There are no indications on record whether these calculations were provided and specifically elaborated. In absence of these factors being reflected, I am unable to appreciate the quantifications in this regards. Further no evidence is coming on record whether refund claim was specifically pleaded with Commissioner (Appeals). Accordingly no order is warranted on this issue at the stage of appeal before tribunal. - Decided against assessee.

Summary

Issues:
1. Wrong availment of Cenvat credit on CBFS and other inputs.
2. Fraudulent intent in availing excess credit.
3. Allegation of suppression and misstatement.
4. Imposition of penalty and extended period of limitation.
5. Challenge on the issue of time bar.
6. Claim for refund of excess amount.

Analysis:

1. The case involved the appellant appealing against an Order-In-Appeal confirming the Cenvat credit of Rs. 65,862.48 and imposing a penalty of Rs. 1,48,851/- for wrong availment. The original adjudicating authority confirmed the credit and penalty, which was upheld by the Commissioner in the Order-In-Appeal. The appellant was found to have availed Cenvat credit on CBFS while actually using diesel oil in their furnaces, contrary to Cenvat Credit Rules, 2004. The appellant admitted to the irregularity and offered to pay back the wrongly availed credit.

2. During the investigation, it was discovered that the appellant had also suppressed information regarding the wrong availment of Cenvat credit amounting to Rs. 2,31,838.88/- in addition to the CBFS credit. The appellant had utilized full credit beyond the permissible limit of 20% of the tax payable, leading to further allegations of fraudulent intent. The Manager admitted ignorance of the rule restricting credit availment to 20% of the Service Tax.

3. The Commissioner (Appeals) analyzed the case in detail, highlighting that CBFS was not suitable as fuel in furnaces due to its composition and primary end-use application in manufacturing Carbon Black. The invoices showed CBFS, not furnace oil, and the appellant failed to provide evidence of CBFS usage. The Commissioner found evidence of fraud and suppression, leading to the sustained demands under the extended period of limitation.

4. The Commissioner upheld the penalty and extended period of limitation, citing clear fraudulent intent and suppression of facts by the appellant. The appellant's challenge on the time bar was rejected due to established fraud and suppression. The credit availment was required to be restricted to 20% of the total tax payable, but the appellant had availed excess credit. The Commissioner concluded that the appeal lacked merit, and the penalty was justified.

5. The issue of a refund of the excess amount was raised by the appellant, but the Commissioner's order did not address it. The appellant failed to provide specific calculations or evidence supporting the refund claim. As the issue was not elaborated upon earlier and lacked substantiation, the Tribunal found no grounds for addressing the refund claim.

6. The Tribunal dismissed the appeal, concurring with the Commissioner's conclusions on the fraudulent intent, suppression, and penalty imposition. The judgment highlighted the detailed analysis conducted by the Commissioner and upheld the decision based on the totality of facts presented in the case. The appeal was deemed without merit, and the refund claim was not entertained due to insufficient evidence and lack of substantiation.