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TMI Blog2022 (9) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... coils cannot be faulted. In view of the decision of the Hon ble High Court of Mumbai, there are no merits in the impugned order and the same is set aside - appeal allowed - decided in favor of appellant. - Excise Appeal No. 849 2011 - FINAL ORDER NO. A/85894/2022 - Dated:- 27-9-2022 - MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) AND MR. AJAY SHARMA, MEMBER (JUDICIAL) Shri P.V. Sadavarte, Advocate, for the Appellant Shri Dhirendra Kumar, Joint Commissioner, Authorised Representative for the Respondent ORDER This appeal is directed against order in original No 110/2010-11/C dated 22.02.2011 of the Commissioner of Central Excise, Nagpur. By the impugned order, the Commissioner has held as follows: ORDER (i) I disallow order the recovery of the irregularly availed Cenvat credit of Rs. 50,56,154 1-(Rupees fifty lakhs fifty six thousand one hundred fifty four only) (including Education Cess @ 2% and Secondary and Higher Education Cess @1%) which is not leviable under Section 66 of Finance Act, 1944 from the Noticee under Rule 14 of CENVAT Credit Rules, 2004 read with proviso to Section 11A of the Central Excise Act, 1944. (ii) I order the recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailed Cenvat credit of the service tax paid. The excess service tax amounting to Rs 50,56,154/-the credit of which appellant has take in view of the revenue was inadmissible under rule 3(1) (ix) of Cenvat Credit Rules, 2004. 2.5 Therefore, the a show cause noticee dated 05.02.2010 to them asking them o show cause, as to why: - (i) Cenvat credit of Rs. 50,56,154 /-(Rupees fifty lakhs fifty six thousand one hundred fifty four only) (including Education Cess @ 2% and Secondary and Higher Education Cess @1%) which is not leviable under Section 66 of Finance Act, 1944 should not be disallowed and recovered from them under Rule 14 of CENVAT Credit Rules, 2004 read with proviso to Section 11A of the Central Excise Act, 1944. (ii) Interest at the appropriate rate should not be recovered from them under Section 11AB of Central Excise Act, 1944 read with Rule 14 of the Cenvat Credit Rules, 2004. (iii) Penalty should not be imposed upon them under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. 2.6 This show cause notice was adjudicated as per the impugned order. Aggrieved appellants have filed this appeal. 3.1 We have hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Eenadu Television [2019 (28) GSTL 256 (T-Hyd)] Federal Mogul TPR India Ltd. [2016 (42) STR 427 (Kar)] Auro Weaving Mills [2017 (345) ELT 350 (HP)] Glaxo India Ltd. [1999 (109) ELT 211 (T) ] 3.3 Arguing for the revenue while reiterating the findings recorded in the impugned order, learned authorized representative submitted that: During the period Jan, 2005 to Sept., 2007, Appellant paid Service Tax on the freight paid on inward carriage under the category of transport of goods by road' on 100% of gross freight paid and availed credit of Service Tax paid and utilized it for payment of duty. As per Notification No. 32/2004-ST dated 03.12.2004, Appellant was required to pay S.Tax only on 25% of the gross amount of freight paid to the Goods Transport Agency. Appellant has paid S.Tax on the 100% of the gross amount of freight and has availed credit of such excess paid S.Tax which is inadmissible under Rule 3(1)(ix) of the Cenvat Credit Rules, 2004. As per the provisions of Rule 3(1)(ix) of the Cenvat Credit Rules 2004, a manufacture is allowed to take credit of Service Tax which is leviable under Section 66 of the Finance Act, 1944. As per Section 70 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for imposition of penalties Commissioner has recorded in the impugned order, the following findings: Whether the Cenvat Credit of Service Tax paid in excess of 100% value of service, instead of 25% on the input service of Transportation of Goods by Road (GTA) is admissible to them. 17.4. Thus it is observed that it was the responsibility of the Noticee to have correctly assessed / determined and paid the Service Tax on the GTA service. 17.5. The Noticee has paid the Service Tax on the entire amount of freight paid by them instead of on the value equal to 25% of the freight in view of the exemption Notification No. 32/2004 dated 03.12.2004. The said exemption was subject to the condition that no Cenvat Credit of duty paid on inputs or capital goods used for providing the taxable service had been taken or the goods Transport Agency had not availed the benefit under Notification No. 12/2003 S. T. dated 20.06.03. 17.6. In other words if the above two conditions were satisfied then the Service Tax would be payable on the value equal to 25% of the gross value charged i.e. equal to 25% of the freight paid by the Noticee and not on the entire freight amount. 17.7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above. Hence it is not an option available to pay Service Tax on full value in respect of the service availed from GTA. Only in case where the GTA takes Cenvat Credit the Noticee is required to pay Service Tax on full value. It is for the GTA to choose the option and not the Noticee (i.e. person who availed the service) 17.11. It is further contended by the Noticee that the exemption notification was conditional and hence optional. It is observed that the same is not forthcoming from the wordings of the notification. It is clearly specified that the exemption was granted from payment of Service Tax on value which is in excess of 25% of the value of freight subject to the fulfillment of the two conditions. Although the notification was conditional it cannot be said that the same was optional. 17.12. Moreover, it was the responsibility of the Noticee to have obtained consignment notes from the GTA in terms of the circular dated 27.07.05 referred above. The Noticee has failed to obtain such declaration. Thus it is observed that the Noticee was liable to pay service tax under the provisions of Notification No.1/2006-ST dated 1-3-2006 i.e. on a value which is equivalen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue neutral situation comes about in relation to the credit available to the assessee himself and not by way of availability of credit to the buyer of the assessee's manufactured goods; 19. Limitation - The Noticee bas claimed that the ST-3 returns were filed and were accepted without any objection. It is observed that the Noticee was working under self assessment and hay determined the Service Tax liability themselves. Regarding their submission on the auditing of their unit by CAP during October, 2005 and the Range officer was aware of the fact of their making payment of Service Tax on 100% amount. It is observed that it was detected during audit that the Noticee had irregularly taken Cenvat Credit and not disclosed by the Noticee on their own. Further the instant show cause notice has covered the period of five years only from 2005-06 onwards. Hence the same was issued within five years from the knowledge of the department. Thus the same cannot be said to be time barred. I place reliance upon the decision of the Hon'ble Apex court in the case of CCE, Viazg v/s M/s Mehta Co reported in 2011-TIOL-17-SC-CX in which it has been held that Show Cause Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to ensure as regards to proper availment of Cenvat credit with observance of the conditions laid down under Rule 4 of the Cenvat Credit Rules, 2004.The availment of the irregular Cenvat Credit comes to the knowledge of the department only on scrutiny of their records during the audit of relevant period. Hence, by this act of omission and commission it is proved that the Noticee has suppressed the facts with willful intention to avail inadmissible credit and utilized the same for payment of duty. Therefore I held that for recovery of inadmissible Cenvat credit, the proviso to Section 11 A of the Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004 is correctly invokable e instant case and the Noticee is liable for penalty under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. I hold that the imposition of penalty under Rule 15 of CCR, 2004 read with Section 11AC of CEA. 1944 is sustainable in law by following the judgment of the Hon ble Apex Court in the case of Sony India Lid Vs CCE New Delhi reported in 2004 (167) ELT 0385 (SC) = 2004 (094) ECC 0033 (SC) which upheld the imposition of penalty under Section 11AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts as recorded above the fact of payment of service tax is not in dispute. Once the fact of payment of service tax is not disputed the CENVAT Credit availed by the appellant which is equal to the tax paid cannot be disputed. In the case of Ajinkya Enterprises [2012- TIOL-578-HC-MUMBAI-CX], Hon'ble High Court of Mumbai held as follows: 8. We see no merit in the above contentions. As rightly contended by the representative of the assessee appearing in person, till 1st March 2005 the Revenue has accepted that the activity carried on by the assessee constituted manufacturing activity in view of Board Circular dated 7th September 2001 and accordingly held that the assessee is entitled to take credit of duty paid on HR / CR coils. It is only because, the Board, on 2 nd March 2005 has withdrawn the Circular dated 7th September 2001 the Revenue is claiming that the activity carried on by the assessee does not amount to manufacturing activity. The question is, whether on the facts of the present case, the Revenue, based on the Circular dated 2nd March 2005, is justified in calling upon the assessee to reverse the credit or pay the amount to the extent of the credit liable to be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TL 105 (T-Mumbai)], a coordinate bench of Tribunal has held as follows:- 5 . The facts of the case are that the appellant have paid service tax on GTA on the 100% amount without availing abatement of 75% as was applicable and they have availed the credit of the service tax on 100% GTA paid by them. During audit an objection was raised that since service tax is payable only on 25% of the transportation charges the credit on the service tax paid on 75% is not admissible. Complying with the audit objection appellant reversed the credit and treated the same as excess payment and they adjusted the said excess payment of service tax against service tax liability for the subsequent period i.e. April, 2009 to June, 2009. . 10 . I have carefully considered the submissions made by the Learned Authorised Representative and perused the records. The facts narrated above are not under dispute. Firstly, the notification is concessional notification. Unlike in Central Excise law wherein the unconditional notification should be mandatorily availed by the assessee, similar provision is not available in service tax. Therefore, it is open for the assessee whether to avai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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