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TMI Blog2020 (3) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion wrongly qualifying, not all three but only two of these, it would appear that the assumption of credit and a refund of credit, if wrong, would have to pay the price in the form of interest. However, it is unusual for utilization to be qualified with ineligibility on its own as utilization is solely for the purpose of discharge of tax/duty liability which, even if not warranted, does not, by any stretch of usage, behove description as wrongly. Such transfer of epithet, borne out of drafting frailty, can only reasonably mean utilization after having been wrongly taken and, therefore, ineligible. The appeal is allowed by way of remand to determine the interest liability, as well as the penal consequences, in the light of the submissions that were not considered by the adjudicating authority in the impugned order. - Service Tax Appeal No: 85306 of 2015 - A/85481/2020 - Dated:- 5-3-2020 - HON BLE MR C J MATHEW, MEMBER (TECHNICAL) AND HON BLE DR SUVENDU KUMAR PATI, MEMBER (JUDICIAL) Shri JC Patel with Ms Shamita Patel, Advocates for the appellant Ms P Vinitha Sekhar, Additional Commissioner (AR) for the respondent ORDER PER: C J MATHEW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax under Finance Act, 1994, and credit having been taken more than once against the same document. In the adjudication order of Commissioner of Central Excise, Mumbai-II, interest liability of ₹ 1,28,80,551 and ₹ 12,21,933 for the two periods was confirmed, and the recourse to debit notes, insofar as ₹ 1,02,80,347 out of ₹ 1,50,92,416 pertaining to capital goods was held to be eligible, with denial restricted to ₹ 48,12,069 and ₹ 2,51,05,390 which were ordered to be recovered along with interest thereon. The credit availed on capital goods in excess in the year of procurement was, though denied to the extent of ₹20,15,25,253, allowed to be adjusted as credit of the following year and, thereby, the recovery was limited to interest liability of ₹1,27,46,540 and penalty, equivalent to the excess credit, imposed under rule 15 of CENVAT Credit Rules, 2004. Credit of ₹ 4,49,26,318 held to be attributable to capital goods received before the service provided by appellant was made taxable and to tax of ₹ 9,42,17,819 paid, under a ten year agreement with M/s VSNL on 13th November 2006 for procuring indefeasible right to use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot payable with respect to duty required to be debited in the CENVAT Credit Account provided sufficient balance was available in the CENVAT Credit Account. Nothing has been brought on record that such a credit was not available in the CENVAT Account during the relevant period for debit. , Learned Counsel questions the legality of levy of interest for the alleged delay in payment of tax liability. 5. Further, it was claimed that CENVAT credit on capital goods procured when interconnection usage charge was not liable to tax could not be denied as the subsequent incorporation of telecommunication service , as well as the utilisation of the same by other divisions of the appellant in providing service to subscribers, was not countered in the adjudication order. Furthermore, according to him, even if the input service was contracted for when tax liability did not arise on interconnection usage charge , the introduction of the levy soon after ensures eligibility for CENVAT credit, at least in proportion. Reliance has been placed on the decision of the Hon ble High Court of Karnataka in Commissioner of Central Excise, Bangalore v. Kailash Auto Builders Ltd [2011-TIOL-974-H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying upon the decision of the Hon ble High Court of Bombay in Commissioner of Central Excise, Pune-III v. Ajinkya Enterprises [2013 (294) ELT 203 (Bom)] holding that 10 In these circumstances, the CESTAT following its decision in the case of Ashok Enterprises-2008 (221) ELT 586 (T), Super Forgings-2007 (217) ELT 559 (T), SAIL-2007 (220) ELT 520 (T) = 2009 (15) STR 640 (Tribunal), MP Telelinks Limited-2004 (178) ELT 167 (T) and a decision of the Gujarat High Court in the case of CCE v. Creative Enterprises reported in 2009 (235) ELT 785 (Guj) has held that once the duty on final products has been accepted by the Department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. Admittedly, similar view taken by the Gujarat High Court in the case of Creative Enterprises has been upheld by the Apex Court [see 2009 (243) ELT A121] by dismissing the SLP filed by the Revenue. and on the decision of the Hon ble High Court of Punjab Haryana in Commissioner of Central Excise v. Rane NSK Steering Systems Ltd [2007 (218) ELT 354 (P H)] holding that 2. Once the assessee-respondent has paid the excise duty then he is naturally e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplications of these decisions, it may be worthwhile to recall the provisions of Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded.- Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or provider of the output service and the provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. before its amendment with effect from 1st April 2012 as Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded.- Where the CENVAT credit has been taken and utilized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or provider of the output service and the provisions of sections 11A and 11AB of the Excise Act or sections 73 and 75 of the Finance Act, shall apply mutatis mutandis for effecting such recoveries. 10. The Hon ble Supreme Court, unambiguously, disapproved of the conscious substitution, by the Hon ble High Court of Punjab Haryana, of and in place of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, it may be worthwhile to peruse the circumstances in which that dispute was carried in appeal thereto. The issue in re Vandana Vidyut Ltd was the relegation of credit taken as mere paper entries which, according to the Tribunal, was not the same as utilization and the Hon ble High Court held the liability to interest after taking note that such a reversal was rectified only after issue of show cause notice. In re GL V India Pvt Ltd , the question of law was framed by Hon ble High Court of Bombay after taking note of credit having been taken suo motu by the assessee that, by itself, was unauthorized. In re Balmer Lawrie Co Ltd, the impugned goods were received at the premises of the assessee merely for storage, and entirely unrelated to the activities conferring eligibility to credit, which was held to be beyond the pale of CENVAT Credit Rules, 2004. Thus, we see an unbroken thread connecting the decision of the Hon ble Supreme Court and the decisions that followed thereon in which the utilization was not a matter of consideration. With this proposition of case to case application as precedent, the subsequent decisions are precedents to be followed in disputes that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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