9911796707
TMI Blog2024 (5) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) I also impose a penalty of Rs.5,000/- (Rs. Five Thousand only) under Rule 15A of CENVAT Credit Rules, 2004 for contravention of Rule 4(2)(a) of CENVAT Credit Rules, 2004. (c) I set aside the demand of Rs.14,03,43,252/- (Rs. Fourteen Crore, Three Lacs, Forty Three thousand and Two Hundred Fifty two only). The adjudged dues are ordered to be paid forthwith." 2.1 The Appellant is engaged in providing output services under the category of Broadcasting Services. He is availing the facility of Cenvat credit. 2.2 During the course of the audit it was observed that the Appellant has been taking credit on the Set Top Boxes provided by them to their customers for receiving the signals and credit was taken by the Appellant treating them as input. It was observed that these goods being classifiable under Chapter 85 were covered by the definition of capital goods and thus the act of taking 100% credit immediately on the receipt of the said goods was not proper and only 50% of credit should have been taken during that financial year and next 50% should have been gone to the next financial year. 2.3 Show cause notice dated 30.03.2013 was issued to the Appellant asking them to show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lized in their book of accounts, and depreciation claimed for the purpose of income tax. It is a settled preposition in law that accounting practices should not govern the interpretation of legal provisions. Reliance placed on the decisions as follows: * Ingersroll Rand (India) Ltd. [2014 (300) E.L.T. 347 (Guj)] * Tuticorin Alkali Chemicals and Fertilizers [1996 (227) I.T.R. 172 (SC)] * Shakti Finance [2013 (258) C.T.R. 433 (Mad)] * The demand for interest could not have been there when the credit taken was not utilized as held in following cases,- * Bill Forge Pvt. Ltd. [2012 (26) S.T.R. 204 (Kar)] * Jaypee Greens [2020 (33) G.S.T.L. 109 (T-All)] * the demand is barred by limitation as extended period of limitation is not available for the reason that * issue is in the nature of the interpretation of statutory provisions. Legal opinion was taken by the Appellant from the office of LakshmiKumaran & Shridharan and on the basis of the said opinion credit was taken treating thee set top boxes as inputs; * the issue was well in the knowledge of the department as evident from the audit report dated 15.05.2009. * Reliance placed on the following decisions to support t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Chapter 85 of the Central Tariff Act, 1985, hence, covered under the definition of capital goods. In this regard it is pertinent to mention that the usage of the STBs is in the form of mechanical device for further enhancement of the transmission to the customers and it cannot be construed as an input as claimed by the party. 5.9 During the course of Audit, it was revealed that the party had booked the CPEs as 'Capital Revenue Expenditure' and availed of the benefit of depreciation on the CPEs as Capital Goods. As such it is evident that the party was treating the CPEs as Capital Goods for the purpose of availment of depreciation from their book balance. insert para 5.10, 5.11, 5.12, 5.13 & 5.14 from OIO" 4.3 The issue involved in the present appeal is in a very narrow compass. The definition of "input" as at the relevant time has per Rule 2 (k) of the CENVAT Credit Rules, 2004 is reproduced below:- "(k) "input" means: (i) All goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are possible, the Court ordinarily would interpret the provisions in favour of a tax-payer and against the Revenue." B. Acer India [2007 (218) E.L.T. 17 (S.C.)]; "21. Furthermore, the Computers (Additional Duty) Rules, 2004 is a taxing statute. It required to be construed strictly. [See Manish Maheshwari v. Asstt. Commissioner of Income Tax and Anr., 2007 (3) SCALE 627 and Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector and E.T.I.O. and Ors., 2007 (7) SCALE 392]. So construed, we are of the opinion, that the interpretation by the Tribunal is in consonance with the aforementioned rules of interpretation." C. Dilip Kumar & Company [2018 (361) E.L.T. 577 (S.C.)] "19. The well-settled principle is that when the words in a statute are clear, plain and unambiguous and only one meaning can be inferred, the Courts are bound to give effect to the said meaning irrespective of consequences. If the words in the statute are plain and unambiguous, it becomes necessary to expound those words in their natural and ordinary sense. The words used declare the intention of the Legislature. In Kanai Lal Sur v. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any interpretation. This salutary maxim flows from the phrase "cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio". Following such maxim, the Courts sometimes have made strict interpretation subordinate to the plain meaning rule [Mangalore Chemicals case (Infra para 37).], though strict interpretation is used in the precise sense. To say that strict interpretation involves plain reading of the statute and to say that one has to utilize strict interpretation in the event of ambiguity is self-contradictory. 23. Next, we may consider the meaning and scope of 'strict interpretation', as evolved in Indian law and how the higher Courts have made a distinction while interpreting a taxation statute on one hand and tax exemption notification on the other. In Black's Law Dictionary (10th Edn.) 'strict interpretation' is described as under : Strict interpretation. (16c) 1. An interpretation according to the narrowest, most literal meaning of the words without regard for context and other permissible meanings. 2. An interpretation according to what the interpreter narrowly believes to have been the specific intentions or understandings of the text's authors or ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its contemporary meaning if there has been no change with the passage of time." That strict interpretation does not encompass strict - literalism into its fold. It may be relevant to note that simply juxtaposing 'strict interpretation' with literal rule' would result in ignoring an important aspect that is 'apparent legislative intent'. We are alive to the fact that there may be overlapping in some cases between the aforesaid two rules. With certainty, we can observe that, 'strict interpretation' does not encompass such literalism, which lead to absurdity and go against the legislative intent. As noted above, if literalism is at the far end of the spectrum, wherein it accepts no implications or inferences, then 'strict interpretation' can be implied to accept some form of essential inferences which literal rule may not accept. 25. We are not suggesting that literal rule de hors the strict interpretation nor one should ignore to ascertain the interplay between 'strict interpretation' and 'literal interpretation'. We may reiterate at the cost of repetition that strict interpretation of a statute certainly involves literal or plain meaning test. The other tools of interpretation, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
