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2022 (9) TMI 1002 - AT - Central ExciseCENVAT Credit - input services - Outdoor Catering Services - period from January 2010 to April 2015 - levy of penalty - HELD THAT - The amendment was brought forth in the definition of input services with effect from 01.04.2011 which excluded services in the nature of outdoor catering services. Further, the Hon ble Supreme Court in the case of TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED VERSUS THE COMMISSIONER OF CENTRAL TAX 2021 (12) TMI 420 - SC ORDER had held that credit is not eligible after 01.04.2011. From the foregoing, it is held that appellant is not eligible for credit after 01.04.2011. Further, for the period prior to 01.04.2011, the appellant is eligible for credit. Levy of penalty - HELD THAT - The issue is interpretational in nature as the same had travelled upto the Apex Court wherein the Apex Court has held that after 01.04.2011 the credit is not eligible. Further, there is no positive evidence adduced by the department that the appellant intentionally suppressed facts to evade payment of duty - Penalty is set aside. The impugned order is modified to the extent of allowing credit for the period prior to 01.04.2011. The demand for the period after 01.04.2011 is upheld. The appellant is eligible for adjusting the amount that has already been paid. Penalty imposed is set aside - Appeal allowed in part.
Issues:
1. Eligibility of cenvat credit on 'Outdoor Catering Services' for the period January 2010 to April 2015. 2. Interpretation of law regarding credit eligibility based on the timing of the amendment. 3. Consideration of penalty imposition due to interpretational nature of the issue and lack of evidence of intentional suppression of facts. Analysis: 1. The case involved the appellant, engaged in the manufacture of Sanitary Wares, availing cenvat credit on 'Outdoor Catering Services' for the period from January 2010 to April 2015. The Department contended that the credit availed on such services was not eligible. Show cause notice was issued, leading to the original authority confirming the demand along with interest and penalty. The appellant appealed against this decision. 2. The appellant's counsel argued that eligibility for credit should be determined based on the timing of the amendment excluding 'Outdoor Catering Services.' It was highlighted that for the period before 01.04.2011, the appellant should be eligible for credit as the exclusion came into effect post that date. Legal precedents, including decisions in other cases, were cited to support this argument. 3. The counsel acknowledged that post 01.04.2011, the appellant would not be eligible for credit, citing a recent decision by the Hon'ble Supreme Court. It was emphasized that the appellant had already paid the entire amount along with interest for the services in question, which should be considered for adjusting the demand. The appellant's argument centered on the interpretational nature of the issue and their bona fide belief in availing the credit. 4. After hearing both sides, the Member (Judicial) analyzed the issue and held that the appellant was not eligible for credit on 'Outdoor Catering Services' after 01.04.2011. However, for the period preceding this date, the appellant was deemed eligible for credit. The Member also considered the interpretational nature of the issue and the lack of evidence of intentional suppression of facts by the appellant. 5. Consequently, the impugned order was modified to allow credit for the period before 01.04.2011, while upholding the demand for the subsequent period. The appellant was granted the right to adjust the amount already paid, and the penalty imposed was set aside based on the interpretational aspect of the issue and the absence of evidence supporting intentional evasion of duty. The appeal was partly allowed with consequential relief as per the law.
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