9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (3) TMI 100 - AT - Central ExciseCENVAT credit - case against the appellant is that common input services for trading which, with effect from 1st April 2011 was incorporated as exempt service in rule 2(c) of CENVAT Credit Rules, 2004 should not have been availed of in CENVAT credit account - Held that - No attempt has been made in the SCN to isolate the value of the service on which alone liability under rule 6(3) (i) of CCR 2004 could be applied - It is certainly not the intention of the provision of law to recover an amount of ₹ 4,01,224/- when the benefit derived is limited to ₹ 5,551/- and which was already reversed by the appellant on 26th March 2014. It is now settled law that reversal of CENVAT credit is no different from non-availment of the credit. Appeal allowed - decided in favor of appellant.
Issues:
Confirmation of recovery of demand under CENVAT Credit Rules, 2004 and Central Excise Act, 1944; Imposition of penalty under rule 15 of CENVAT Credit Rules, 2004. Analysis: The dispute in this case revolved around the confirmation of the recovery of demand amounting to &8377; 4,01,224, along with interest and the imposition of a penalty of a similar amount under rule 15 of CENVAT Credit Rules, 2004, read with section 11AC of the Central Excise Act, 1944. The appellant was alleged to have availed common input services for trading, which was incorporated as an exempt service in the CENVAT Credit Rules, 2004. The jurisdictional authorities contended that the appellant failed to maintain a separate account for inputs used in trading and manufacturing activities, making them liable under rule 6(3)(i) of the CENVAT Credit Rules, 2004. During the proceedings, no representative appeared for the appellant, and their written submission was considered. The authorities calculated the appellant's liability at 6% of the value of exempted output services, specifically trading, resulting in the confirmed demand of &8377; 4,01,224. However, upon hearing the Learned Authorised Representative, it was noted that the show cause notice demanded payment based on the value of goods cleared for trading, despite trading being declared as an exempt service. The Tribunal observed that the liability under rule 6(3)(i) should have been based on the value of the service alone, not the goods involved. Additionally, it was highlighted that the CENVAT credit attributable to the exempt activity was &8377; 5,551, which had already been reversed by the appellant. The Tribunal referenced legal precedent to establish that the reversal of CENVAT credit was akin to non-availment, rendering the recovery and penalty unsustainable in law. In conclusion, the Tribunal found that the confirmation of recovery and imposition of the penalty were not legally sustainable, leading to their set aside. The judgment was pronounced on 29/01/2018.
|
