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TMI Blog2023 (7) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... otally uncalled for and unjustified. Both show cause notice and Order-in-Original seek to deny the CENVAT credit in respect of insurance services for the reason that these services are not used in Appellant in or in relation to manufacture of the finished goods. It is also observed that no ground for denial of CENVAT Credit in respect of construction services has been indicated either in the show cause notice or in the Order-in-Original. It is only in the order of the appellate authority that the ground for denial of CENVAT credit on the construction services is put forth, by stating that it falls within the exclusion clause - it is arriving at a loss to make out as to what quantum of CENVAT Credit sought to be denied in respect of life insurance services and what is quantum in respect of construction services. There are no finding recorded by the Commissioner (Appeals) in his order in respect of submission made by the appellant, if Cenvat Credit has been allowed in respect of the same services to the other assessee s there is no justifiable reason for denying the same to the present appellant - The show cause notice should not have been issued to the appellant. It is observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 67,022/- (Rupees sixty seven thousand twenty two Only) as wrongly availed Service tax credit should not be demanded and recovered from them under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11-A(1) of the Central Excise Act, 1944 along with interest under Rule 14 of Rules ibid read with Section 11-AA of the Act ibid. As the amount has already been reversed by the party, why the same should not be appropriated. (iii) The penalty should not be imposed upon them under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11-AC of the Central Excise Act, 1944 for contravening the provisions of Rules 2, 3 4 of CENVAT Credit Rules, 2004. 2.2 The show cause notice was adjudicated vide Order-in-Original No.137/Adj/2015-16 dated 28.01.2016. The Original Adjudicating Authority has held as follows:- (i) I confirm the demand of Rs.67,022/- (Rupees sixty seven thousand and twenty two only) as wrongly availed CENVAT Credit on input services against M/s Kisan sahkari Chini Mills Ltd. Bisalpur Pilibhit under Rule 14 of the CENVAT CREDIT RULES, 2004 read with Section 11-A of the Central Excise Act, 1944. Since the party have already deposited Rs. 67,022/- vide RG- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstruction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services (B) . (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee. A perusal of the above Rule clearly reveals that the civil or construction work is specifically covered under the exclusion clause of definition of 'input service' i.e. clause (A) of definition of 'input service' under Rule 2(l) of Cenvat credit Rules and such services are not eligible for availing of Cenvat Credit. Further, it can be seen from the above reproduced definition [clause (C) of definition of input service] that there is specific exclusion of various services including life insurance service when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments/ case laws as relied on by the appellant in the impugned appeal are of no help to them. Thus, as per the above discussion and findings, the demand of credit of Rs. 67,022/- and interest thereon in respect of the instant services stands confirmed and an amount of Rs. 67,022/- deposited against the above demand of Rs. 67,022/- stands appropriated . 4.3 Before I proceed to discuss the issue any further it is necessary to note the history of amendments made in Rule 2 (l) which is the bone of contention in the present case. While adjudicating authority has in his order referred to the definition as it existed during the period prior to 01.04.2011, Commissioner (Appeal) has referred to the amended definition as it existed subsequently for upholding the order of the original authority. Rule 2(l) of the CENVAT Credit Rules, 2004 as it was first incorporated in the CENVAT Credit Rules, 2004, by the Notification No 24/2004-(NT) dated 17.09.2004, read as follows: (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;‟; This substituted rule 2 (l) was further amended by the Notification No 18/2012-CE (NT) dated 17.03.2012 with effect from 01.04.2012 and by Notification No 28/2012-CE (NT) dated 20.06.2012 with effect from 01.07.2012, to read as follows: (l) input service means any service, - (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in relation to manufacture of the finished goods. It is also observed that no ground for denial of CENVAT Credit in respect of construction services has been indicated either in the show cause notice or in the Order-in-Original. It is only in the order of the appellate authority that the ground for denial of CENVAT credit on the construction services is put forth, by stating that it falls within the exclusion clause. I am at loss to make out as to what quantum of CENVAT Credit sought to be denied in respect of life insurance services and what is quantum in respect of construction services. Appellant has also pointed out in his appeal that in the similar matter orders have been passed allowing the credit. In similar case appellant has pointed out as follows:- C1. That it is respectfully submitted that the Commissioner (Appeals) Central Excise and Service Tax, Meerut vide his Order in Appeal No.- HPU/Excus/000/Appl-I/363/2016-17 dated 23.02.2017 has allowed Cenvat Credit and set aside the Order in Original No. 186-ADJ/2015-16 dated 31.03.2016 in identical matter. The order- in- appeal dt. 23.02.2017 passed by the Commissioner (Appeals) Meerut whereby he had allowed cenvat cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.5 In my view, no ground existed for invoking the extended period of limitation in the present case. Since the extended period could not have been invoked, the show cause notice itself could not have been issued and the matter should have been settled on the basis of the amount reversed by the appellant. Appellant in his appeal submitted as follows:- Thus the appellant has rightly taken the Cenvat Credit on input services in respect of insurance and civil work but the audit team illegally /forcibly instructed the appellant for reversing Rs. 67,022/- and accordingly the appellant were compelled to reverse Rs. 67,022/- on the instruction of Audit Team. Moreover no details of Rs.67,022/- was given by the neither by the Audit Team nor by the department to the appellant. On asking for the details of Rs.67,022/- by the representative of the appellant, the Audit Team assured that the details of Rs.67,022/- will be provided through department with Audit Report and also interest if payable by the appellant. Since the appellant received the audit report dt. 04.03.2013 with out details of Rs.67,022/- from the department, the appellant could not reply about this objection as submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2B of section 11A provides that in case the person in default makes payment of the escaped amount of duty before the service of notice then the Revenue will not give him the notice under sub section 1. This, perhaps, is the basis of the common though erroneous view that no penalty would be leviable if the escaped amount of duty is paid before the service of notice. It, however, overlooks the two explanations qualifying the main provision. Explanation 1 makes it clear that the payment would, nevertheless, be subject to imposition of interest under section 11AB. Explanation 2 makes it further clear that in case the escape of duty is intentional and by reason of deception the main provision of sub section 2B will have no application. 16. The other provision with which we are concerned in this case is section 11AC relating to penalty. It is as follows: 11AC. Penalty for short-levy or non-levy of duty in certain cases.- where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent to evade duty by adopting any of the means mentioned in the section. 4.7 I further find on being pointed out by the audit Appellant had reversed the credit taken by him and subsequently had paid the interest due on such allegedly inadmissible credit, appellant has in his appeal memo given the entire correspondence entered between him and department for reversal of the alleged inadmissible credit and interest thereon. Section 11 (A) (2) of the Central Excise Act, 1944 reads as follows: (2) The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who on receipt of such information, shall not serve any notice under clause (a) of the sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder. In my view in absence of any concrete reasons to invoke extended period of limitation there is no reason why this subsection should have not been invoked by the revenue for not issuing any show cause notice to the appellant. 4.8 From the above discussions, it is quite evident that impugned order cannot be sustained on any o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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