9911796707
TMI Blog2022 (3) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the remaining demand of Cenvat credit of Rs. 18,75,923/- is dropped as the cenvat credit has been taken properly. (ii) I order for recovery of interest at applicable rates on the aforesaid amount of cenvat credit confirmed at (i) above in terms of Rule 14 of Cenvat Credit Rules, 2004 read with Section 11 AB/Section 11 AA of the Central Excise Act, 1944. (iii) I impose a penalty of Rs. 1,18,89,509/- upon M/s Varun Beverage Limited, Chopanki, Bhiwadi in terms of Rule 15(1) of the Cenvat Credit Rules, 2004 and order recovery of the same from them. This order is issued without prejudice to any other action that may be taken under the law relating to Central Excise or any other law for the time being in force." 2. We have heard both sides and perused the records. 3. The facts of the case, in brief, are that the appellant is a manufacturer of soft drinks, mineral water and fruit juices and holds Central Excise registration. During the course of audit of the appellant for the period April 2012 to March 2015, it was observed by the Auditors that the appellant had taken Cenvat credit on the basis of improper challans issued by its head office which is registered as Input S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 301 (Tri.-Mumbai)] and Commissioner of Central Excise, Delhi-III Vs. Pricol Ltd [2016 (41) STR 649 (Tri.-Del.)]. (iii) As far as the air travel agent and air charter services are concerned, the appellant used them in or in relation to the manufacture of final product. Reliance has been placed on Steadman Pharmaceuticals (P) Ltd. Vs. Commissioner of Central Excise, Chennai-III [2016 (44) STR 427 (Tri.-Chennai)]. (iv) On the allegation that the head office of the appellant (Input Service Distributor) has not distributed the credit to all units, it has been asserted that the ISD has indeed, distributed eligible CENVAT credit of service tax to all the units on pro rata basis as per Rule 7 of CCR, 2004 which reads as follows : "Rule 7. Manner of distribution of credit by input service distributor. - The input service distributor may distribute the CENVAT credit in respect of the service tax paid on the input service to its manufacturing units or units providing output service, subject to the following condition, namely:- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; or (b) credit of service tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing which the CENVAT credit is distributed. (c ) In case of an assessee who does not have any total turnover in the said period, the input service distributor shall distribute any credit only after the end of such relevant period wherein the total turnover of its units is available." After 1.04.2014 "Explanation 3 - For the purposes of this rule, the 'relevant period' shall be,- (a) If the assessee has turnover in the 'financial year' preceding to the year during which credit is to be distributed for month or quarter, as the case may be, the said financial year; or (b) If the assessee does not have turnover for some or all the units in the preceding financial year, the last quarter for which details of turnover of all the units are available, previous to the month or quarter for which credit is to be distributed." 8. The appellant submits that the company has followed the provisions correctly inasmuch as for the period up to 1.4.2014, turnover of units on monthly basis has been taken and thereafter turnover on yearly basis was taken. However, the appellant had inadvertently taken turnover on calendar year basis instead of on financial year basis. Nevertheless, even if t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asserted that the show cause notice is not sustainable and needs to be set aside. The appellant also contested the impugned order on the grounds of limitation of time alleging that there is no fraud, collusion, willful mi-statement or suppression of facts and, therefore, the demand cannot be made invoking extended period of limitation. Interest has been asserted to be not recoverable as the demand itself is not sustainable. 13. Lastly, the appellant also contested the penalty imposed under Rule 15 of the Cenvat Credit Rules. 14. Learned Departmental Representative forcefully supported the impugned order. He submitted that the appellant has taken Cenvat credit on the challans issued by the input service distributor. As per Rule 9(2) of CCR, 2004 "no Cenvat credit under sub-Rule (1) shall be taken unless all the particulars as prescribed under the Central Excise Rules or the Service Tax Rules, 1994, as the case may be, are contained in the said documents". Rule 4(A) of the Service Tax Rules provides that every ISD invoice shall contain the following: (i) the name, address and the registration number of the person providing input services and the serial number ad date of invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CR, 2004. This is not a case of demand of duty at all. Therefore, reliance placed by the appellant on the case laws to assert that two show cause notices could not have been issued is completely misplaced. 17. We have considered the arguments advanced from both the sides. Following questions need to be answered: (a) Whether the impugned order gets vitiated on the ground that two show cause notices have been issued for overlapping the periods; (b) Whether the Commissioner was correct in denying Cenvat credit on the ground that certain input services do not quality as 'input services' under Rule 2(l) of CCR, 2004; (c) Whether the head office of the appellant (input service distributor) has distributed the total input services credit only to the appellant, i.e., the Bhiwadi unit and not to the other units; (d) Whether the Cenvat credit is inadmissible if the address of the service provider and amount of credit distributed is not mentioned in the Challan. (e) Whether the ISD has distributed credit incorrectly on the basis of pro-rata turnover of previous year instead of on the basis of monthly turnover; (f) Whether any interest is recoverable from the appellant under Rule 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been made applicable mutatis mutandis for Rule 14 also. Nevertheless, any recovery of irregularly availed Cenvat credit under Rule 14 is not demand of duty at all. Section 11A deals with the duty which the assessee has to pay on final products. Rule 14 deals with the credit of duty on inputs which someone else had paid which the assessee has taken credit of. Any denial of Cenvat taken will not affect the duty liability. Similarly, any demand of duty will not affect the Cenvat credit. If Cenvat credit is wrongly availed, a penalty can be imposed under Rule 15 of CCR, 2004. If duty is short paid, penalty can be imposed under Section 11AC. Therefore, we do not find any illegality in the Revenue issuing two show cause notices; one for recovery of irregular availed Cenvat credit (which is subject matter of the present appeal) and another show cause notice for recovery of duty short paid. It does not amount to two assessments for the same period in this case. Distribution of input service credit only to the appellant 20. It has been alleged in the show cause notice that the total amount of input service credit taken by the input service provider has been distributed in the challa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 25.11.2013 to the assessee on the strength of documents (invoices) issued by M/s IDBI Bank for providing Banking and other financial services and M/s Dhara Jaipuria for providing Renting of Immovable Property Service for service tax involved of Rs. 247200/- and Rs. 68189/- respectively, totaling to Rs. 315389/-. This entire amount has been transferred to the assessee i.e. Chopanki unit. All the challans were issued in the similar manner up to September 2015. Vide Challan No. 90/2015 dated 9.10.2015; 106/2015 dated 19.11.2015 and 122/2015 dated 24.12.2015, the ISD have distributed the Cenvat Credit on pro rata basis taking ratio of 9.52%, 10.15% and 10.15% respectively calculating the ratio on monthly basis which is in excess from the ratio of 6.51% for the year 2015 as discussed above. Therefore, I have no hesitation in holding that the ISD has distributed the entire amount of service tax involved in the said challans to the assesee up to September 2015 and have passed excess credit from October 2015 to December 2015 in contravention provision of Rule 7 of the Cenvat Credit Rules, 2004. 21. Learned Counsel for the appellant has demonstratred through challans and documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the documents on which Cenvat credit is taken. Therefore, we find it a fit case to remit the matter to the adjudicating authority for conducting the necessary verification and decide as to which ISD challans, coupled with the Annexures contain all the essential details to be eligible for Cenvat credit. 24. The next question is whether the Commissioner could have denied Cenvat credit on the ground that certain input services do not qualify under Rule 2(l) of CCR, 2004. We find that the show cause notice did not raise this ground and the Commissioner cannot confirm the demand on a new ground. 25. The last question is whether the ISD had distributed the credit incorrectly as held by the Commissioner in the impugned order or has done it correctly as per Rule 7 read with Explanation 3, as applicable during the relevant period. This issue also needs thorough examination by the Commissioner. 26. In view of the above, we find that the impugned order is not vitiated on the ground that another show cause notice demanding short paid duty of excise was issued to the appellant during the same period. The Commissioner was not correct in denying Cenvat credit on the ground that the input ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
