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TMI Blog2023 (5) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... allow the appeal. X X X X Extracts X X X X X X X X Extracts X X X X ..... vailed for the Unit at Plot No. B-84, MIDC, Anand Nagar, Additional Ambernath Industrial Area, Thane, Maharashtra - 421506 which has been utilized for the payment of service tax. A Total of Rs. 5,78,214/- Cenvat Credit has been incorrectly utilized for the payment of such above mentioned provision of Supply of Tangible Goods Services. The appellant was required to pay tax electronically, through internet banking, but failed to pay the tax electronically but instead had incorrectly utilized Rs. 5,78,214/- Cenvat credit availed which were directly related to the manufacturing activities for payment of service tax liability for service of Supply of Tangible Goods. 2.3 This has resulted into short payment of service tax on service provided by M/s. Vista Film Packaging (Div. of Positive Packaging Industries Ltd.), now known as M/s. Huhtamaki PPL Ltd., Plot No. B-84, MIDC, Anand Nagar, Additional Ambernath Industrial Ares, Thane, Maharashtra-421506. The details of the same have been given below: S. No. Period Assessable Value (Rs.) Service Tax paid through Cenvat (Rs.) 1 April-Sep (FY 2016-17) 20,05,368/- 2,87,436/- 2 Oct-March (FY 2016-17) 20,05,368/- 2,90,778/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant Versus CCE (Adj.), New Delhi, by CESTAT, New Delhi in Service Tax Appeal No. 56375 of 2013 vide Final Order No. 51665/2018 Dated 02/05/2018. 2.6 Accordingly a show cause notice dated 27.03.2019 was issued to the appellant asking them to show cause as to why:- "i. Service Tax amounting to Rs. 5,78,214/- (Rupees Five Lakhs Seventy Eight Thousands Two Hundreds Fourteen only)as detailed in Para 2 above, should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994. ii. Interest on the said amount of Service Tax as at (1) above, should not be demanded and recovered from them under Section 75 of the Finance Act, 1994. iii. Penalty under Section 77of the Finance Act, 1994 should not be imposed upon them, for failure to correctly discharge the Service Tax Liability electronically, through internet banking, on the Services provided at Huhtamaki PPL Ltd. (Rudrapur), Plot No.70-73, Sector-4, IIE Pantnagar, Rudrapur, U.S. Nagar 263153, Uttaranchal and Huhtamaki PPL Ltd. (Hyderabad), Plot No. 139 & 148, Sri Venkateswara Coop. Indl Estate, Naraspur, Dist.-Medak, Bolaram-502325, Telangana. iv. Penalty under Section 78 of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the ER-1 returns and also in Half yearly ST-3 Returns. They further submit that under subrule (4) of Rule 3, Cenvat Credit in respect of specified duties and taxes is permitted to be utilised for the following: i) any duty of excise on any final products, including waste & scrap. ii) duty on inputs or capital gods themselves when they are removed from the factory as such. iii) an amount under sub-rule (2) of Rule 16 of CER,2002. iv) service tax on any output services. In view of expressed provision under Rule 3(4)(a) & (e) which states that Cenvat credit may be utilised for payment of any duty of excise on any final product or Service Tax on any output service, it is settled law that Credit by assessee who is manufacturer as well as service provider, Cenvat credit can be used for payment of excise duty or service tax. However, on the above contention of the appellant I find that as per Rule 201) Credit Rules 2004 input service means any service- (l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Goods service. The said services are having no nexus to the activity of manufacturer and therefore Credit taken on such services, cannot be utilised for the payment of service tax on the output service of Supply of Tangible Goods provided by them since those services are not used for provision of the output service. As regards catena of judgments' relied upon by the assessee, I find all of them are distinguishable from the case in hand. For example I find that the case of Commissioner of CGST, Belapur V/s. GTL Infrastructure Ltd 2019(TIOL)-1370-HC-MUM-ST and other High Court cases were dealing with the question of payment of service tax on reverse charge basis on GTA using Cenvat instead of cash. Similarly in the case of Panchmahal Steel Ltd V/s. CCE & ST 2015 (TIOL)-25-HC-AHM-ST the issue was about payment of Service Tax on GTA by the manufacturer using Cenvat instead of cash. In all those cited cases the issue dealt was the payment of service tax on Reverse Charge Mechanism using Cenvat Credit. In the case in hand issue is totally different. Here the payment of service tax on Supply of Tangible Goods service using Cenvat Credit is sought to be denied on the grounds of abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the said credit. 4.8 In the case of Toyota Kirloskar Motor Pvt. Ltd. [2011 (24) STR (Kar.), the issue was with regard to the definition of input services and not utilization of the credit. 4.9 Learned AR has placed reliance on the decision of Hon'ble Karnataka High Court in the case of Shell Technology India Pvt. Ltd. [2016 (44) STR 244 (Kar.)]. I do not find any merits in the submissions, in view of para 5 of the decision which records the facts in following manner:- "5. The brief facts of the case appears to be that as per the respondent, it is a registered unit rendering services of consulting engineer. As per the respondent, it is 100% export oriented unit engaged in providing services. The respondent filed an application for refund of unutilized Cenvat credit. On 10-9- 2008, the adjudicating authority issued a notice to show cause as to why the refund claim should not be rejected. On 21-7- 2009, the adjudicating authority rejected the refund claim of the respondent. On 9-8-2010, when the matter was carried before the Commissioner of Central Excise (Appeals) (hereinafter referred to as "the Appellate Authority"), the Appellate Authority, examined the matter including t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the assessee was liable to pay Service Tax on G.T.A. Service, it could have utilized Cenvat credit for the purpose of paying such duty. In view of the decisions of Punjab and Haryana High Court and Delhi High Court noted above, we do not find any error in the view of the Tribunal. Tax Appeal is, therefore, dismissed." 4.12 In the case of Godrej & Boyce Manufacturing Co. Ltd. [2019-TIOL-1367-HC-MUM-CX], Hon'ble Bombay High Court has held as follows:- "3. Regarding question (i) :- (a) It is an admitted position before us that the period involved in this appeal is in respect of utilisation of CENVAT credit for payment of service tax on reverse charge basis GTA (Goods Transport Agency) after the introduction of Cenvat Credit Rules, 2004. (b) In terms of Cenvat Credit Rules, 2004, (introduced on 10/09/2004) the credit of input services was not restricted for utilisation only towards discharge of service tax payable in respect of the output services falling within the same classification head/category. In terms of Rule 11 of Cenvat Credit Rules, 2004, there was a merger of credit earned by manufacturer under the Cenvat Credit Rules, 2004 and the credit earned by provider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax Credit Register to the Cenvat Credit Register and are utilising the same for payment of excise duty and service tax. The Revenue had issued a Showcause notice on 21/07/2008 seeking to disallow the transfer of credit which took place in 2004. (b) The Commissioner of Central Excise by adjudicating the order dtd.20/02/2009 confirmed the notice. Being aggrieved, the respondent filed an appeal to the Tribunal. (c) By the impugned order, the Tribunal found that the Revenue was aware that the respondent was taking the merged credit in 2004, in view of intimation dtd.19/01/2005. Thus, the Tribunal held that the showcause notice is time barred and allowed the respondent's appeal before it. (d) We note the findings of the Tribunal is one on facts. It records the fact that the intimation about the utilisation of service tax credit for payment of excise duty was intimated to the department as far as back on 19/01/2005. This intimation amounted to the knowledge on the part of the Revenue and thus the extended period could not be invoked. (e) This decision of the Tribunal is one on facts and nothing has been shown to us to indicate that the same is perverse. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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