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TMI Blog2022 (1) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority vis a vis the claim of reversal made by the appellant. Extended period of limitation - penalty - HELD THAT:- When the appellant is claiming to have admitted and reversed the entire credit confirmed by the impugned order, there are no merits in the submissions made by the appellant vis a vis the invocation of extended period of limitation. However in remand proceeding adjudicating authority should consider the said letter for taking into account this letter for establishing bonafides, for purpose of penalty imposed. The matter needs to be relooked into by the adjudicating authority for verification of the following: Amount of credit reversed by the appellant as claimed on the basis of ST-3 return filed by them; In case on verification, if appellant is able to substantiate their claim no further action is required; In case the some amount is not found to be reversed, consequences as per law follows; Issue needs to examine afresh for bonafides in view of exhibit 15. Appeal allowed by way of remand. - Service Tax Appeal No. ST/86600/2015 and Service Tax Miscellaneous Application No ST/MISC/85933/2021 - A/87412/2021 - Dated:- 23-12-2021 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CENVAT credit on various services such as Passenger Service Fee (PSF) and User Development Fee (UDF), classified under the head Airport Services on the basis of the invoices of various airport authorities. 2.2 After completion of investigations and collecting the details of the credit taken by the appellant on these services, a show cause notice dated 22.10.2013 was issued to appellant asking them to show cause as to why:- i. The Cenvat credit amounting to ₹ 37,76,07,022/- (Rupees Thirty seven crores seventy six lakhs seven thousand and twenty two only) wrongly taken on PSF UDF mentioned at para-7 of the SCN and utilized for payment of service tax on output services should not be demanded and recovered from them under Rule 14 of Cenvat Credit Rules, 20104 read with proviso to the Sub Section (1) of Section 73 of the Finance Act, 1994. ii. the service tax paid on account of PSF under the head Airport service totally amounting to ₹ 22,87,851/- vide challan no 50371 dtd 18.10.2013 should not be appropriated against the demand raised. iii. Interest at appropriate rate should not be demanded and recovered from them under Rule 14 of the Cenvat Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 2015 and Chartered Accountant Certificate dated 30th November, 2021 during the hearing and final disposal of the Appeal. 3.2 The miscellaneous application was considered by the bench on 02.12.2021 along with the appeal and following directions were given: Part heard. Adjourned to 22/12/2021 for allowing AR to seek verification of facts stated by the appellant in miscellaneous application and for completion of arguments 4.1 We have heard Shri D B Shroff, Advocate for the appellant and Shri Nitin Ranjan Deputy Commissioner, Authorized Representative for the revenue. 4.2 Arguing for the appellant learned counsel submitted that- In response to the direction given by the bench on last date of hearing department had asked them to provide invoices against which the credit was taken and sought to be denied as per the impugned order. They had provided the invoices for some period. However they are not aware of any further development in the matter. Revenue authorities have misdirected themselves by calling for the invoices, whereas the demand in the present case has been crystallized and confirmed by the impugned order, and the fact that was to be verified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found that the invoice number is hand written which renders them invalid. 4. Since the assessee has submitted insufficient invoices, the assessee's contention that Cenvat Credit reversed under protest to an extent of ₹ 83.23,05,289/- (As per ST-3 returns) is including the amount of ₹ 31,72,51,646/- towards PSF/UDF/DF is baseless and absolutely incorrect. In view of the above facts, it appears that the assessee has not reversed the said amount of ₹ 31,71,51,646/ This is issued with the approval of the Principal Commissioner. 5.1 We have considered the impugned order along with the submissions made in appeal and during the course of argument. We have also considered the Miscellaneous application and the verification report submitted by revenue. 5.2 Commissioner has in the impugned order while making the record of personal hearing as stated as follows: PERSONAL HEARING Personal hearing was granted to the Noticee on 12.2.2015 which was attended Mr A.C. Pradeep, Finance Controller of M/s. Emirates; Mr. Niren Shethia and Ms. Legro Salot of PWC. They reiterated the written submissions made by them vide letter dated 9.1.2015. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2007(215)ELT 3 SC] and Boards circular No. 858/16/2007-CX dt 8.11.2007 as per which reversal of CENVAT credit before utilization amounts to non availment of credit that since they have not availed the entire credit questions of further reversal do not arise. .... 5.2 Further in para 4.6.13 Commissioner again records as follows: 4.6.13 It appears that, as mentioned in their letter dated 2.3.2015 (received on 5.3.2015) the noticees and availed the credit of UDF for the period April 2012 to Jan. 2013, totally amounting to ₹ 7,44,20,009/- in, in March 2014. This seems to be the part of the 'recomputed cenvat credit amounting to ₹ 45,63,93,1897- as mentioned above. Thus the noticee is availing the credit at a much delayed stage. At the same time they are also claiming that they have not availed any Cenvat during the period 2012-13. They are also making contradictory submissions such as they had availed only admissible credit after computing the ration under Rule 6(3), and at the same time vide their letter dated 2.3.2015, they are also submitting that they are reversing the amount of ₹ 31,79,45,7041- 'under protest'. They have not submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 31 March 2012 (hereinafter referred to as 'Disputed period'). Based on our verification of the CENVAT Credit Register for the period October 2014 to March 2015 and the corresponding Service Tax Returns and workings, we hereby confirm the following: 1. The total amount reversed in 'Section 13 - CENVAT Credit Taken and Utilised' of the Service Tax Return (Form ST-3) in row numbers. 13.1.3.8, 13.2.3.4 and 13.3.3.4 is INR 85,78,05,523 as reported in the Month of February 2015. The amount of INR 85,78,05,523 includes the following reversals: a. CENVAT Credit reversed under 'Protest' to the extent of INR 75,76,65,738. The said amount includes PSF/UDF/DF for the disputed period aggregating to INR 31,72,51,646; b. CENVAT Credit reversed without any 'Protest aggregating to INR 9,96,08,710 on account of other objections (other than the issue of PSF/UDF/DF) raised by authorities during audits; and c. Regular CENVAT Credit on Education Cess and Secondary and Higher Education Cess under Rule 6(3) of the CENVAT Credit Rules, 2004 pertaining to the month of February 2015 aggregating to INR 5,31,075. 2. It is therefore clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of tax. Total demand of CENVAT Credit has been determined by the impugned order and if the same has been reversed by the Appellant as submitted by them before the adjudicating authority and in their Miscellaneous application needs to be verified from their ST-3 returns which are already filed and available with the department. 5.5 In a subsequent order in the similar matter Commissioner has vide his order in original No 95/STC-I/SM/16-17 dated 30.03.2017, after verification of debit entries held as follows: CENVAT CREDIT REVERSED UNDER PROTEST TO BE APPROPRIATED 19. It was informed by the assessce that no cenvat credit was availed by them from April 2012 to July 2014. Cenvat credit for the said period was availed during the months of Aug, Sept and Oct. 2014. On being pointed out by the department during audit conducted in the month of Dec. 2014, the credit so availed, amounting to ₹ 55.45,55,865/- was reversed by them Under Protest in the month of Feb. 2015. As the said amount was paid under protest, show cause notice was issued to the assessee on 11.03.2016. I find that there is no provision in Cenvat Credit Rules, 2004 of reversing cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d has contended that the credit availed on the impugned services has not been utilised. The local cenvat credit availed during Aug, Sept and Oct 2014 on account of the impugned services amount to ₹ 55,45,55,865/ - which was reversed in Feb 2015. I have perused the ST-3 returns filed for the said period and find that the cenvat credit balance for the months August 2014 to Feb 2015 was minimum of ₹ 103 cr for any given said month. The contention of the assessee that they have not utilized the said credit amount during the said months is therefore found to be correct. 20.2 In view of the Rule position as detailed above, no interest is liable to be paid by the assessee, for the wrong availment of cenvat credit of ₹ 55,45,55,865/ -. In terms of Rule 14 of CCR, 2004. 5.6 In view of the above we are of the view that matter needs to be relooked by the adjudicating authority vis a vis the claim of reversal made by the appellant. 5.7 Appellants have also claimed bonafides by referring to Exhibit 15. The said letter has been considered by the Commissioner in the impugned order, in para 4.5.2 stating as follows: 4.5.2 It was also claimed by them that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port operator. Only such declaration would have given any clear understanding and insight of the nature of transaction between AAI and the noticee and the purpose of issue of invoice by AAI, on which the cenvat is availed by them. In absence of any clear and understandable disclosure it can not be assumed that they declared about such availment of credit. Just a mention of a PSF would neither give any idea to the Audit officers about the real nature of such Cenvat availment nor can this be expected that they would conduct a separate enquiry to gauge the fallacious nature of such purported declaration. It appears from the noticee's submission that what they are trying to say is that when they had purportedly given the letter mentioning 'PSF' in the list as one of the services on which the Cenvat is availed, the department should have caused full enquiry by asking for all the details about the same and raised all the objections during the said audit conducted in 2008 itself. By not causing the investigations it tantamount to approving or allowing their Cenvat on PSF. In this context, l observe that in the case of M/s. Step Cosmetics V/S. CCE (1996 (87) ELT 734 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a mechanism to facilitate the remittance of PSF and UDF to AAI and such remittance were not for receipt of any service. Though these facts were known to the noticee, they did not declare it to the department. Therefore it appears to be a clear case of suppression and wilful misdeclaration with an intention to defraud the revenue. Therefore, the extended period as well as penal provisions are invokable in this case. 5.8 However in our view when the appellant is claiming to have admitted and reversed the entire credit confirmed by the impugned order, we do not find any merits in the submissions made by the appellant vis a vis the invocation of extended period of limitation. However in remand proceeding adjudicating authority should consider the said letter for taking into account this letter for establishing bonafides, for purpose of penalty imposed. 5.9 In view of the discussions as above we are of the view that matter needs to be relooked into by the adjudicating authority for verification of the following: Amount of credit reversed by the appellant as claimed on the basis of ST-3 return filed by them; In case on verification, if appellant is able to substantiate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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