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TMI Blog2024 (8) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... services previously which cannot be considered as an adjustment of service tax relating to service tax liability for the subsequent period. However, it is found that erroneous availment of cenvat credit under Rule 3(5) of the Cenvat Credit Rules, 2004 could be recoverable only after insertion of the recovery provision to the said Rule by insertion of an Explanation through amending Notification No.3/2013-CE(NT) dated 01.03.2013 as amended only w.e.f. 01.03.2013. Invocation of extended period of limitation - HELD THAT:- It is found that the Department was aware of the adjustment of the inadmissible cenvat credit against the excess service tax paid since February 2007 as communications have been exchanged between the appellant and Department resulting to payment of interest in March, 2009; and the show-cause notice was issued on 15.06.2009 i.e. after two years; thus invocation of extended period of limitation alleging suppression of fact cannot be sustained. The impugned order is set aside and appeal is allowed. - HON'BLE DR. D. M. MISRA , MEMBER ( JUDICIAL ) And HON'BLE MRS R BHAGYA DEVI , MEMBER ( TECHNICAL ) Mr. Syed Peeran and Ms. Megna Lal , Advocates for the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of India. In support, he referred to the following judgements: i. Dell India Pvt. Ltd. Vs. CST, Bangalore [2016(42) STR 273 (Tri. Bangalore)] ii. General Manager (CMTS) Vs. Commissioner [2014(36) STR 1084 (Tri.)] iii. Chola Business Services Ltd. Vs. CST, Chennai [2017(47) STR 192 (Tri. Chennai)] 2.2. Further, the learned advocate has submitted that the appellant had paid Rs.2,89,78,046/- on export of services which they are eligible to claim refund and instead of adjusting the said amount against the liability of Rs.2,03,69,372/- by way of filing refund claim under Section 11B of the Central Excise Act, 1994 would be a additional procedure which is against the spirit of provisions relating to adjustment of excess payment. In support, he has referred to the following decisions:- i. Nirma Architects Valuers Vs. CCE, Ghaziabad [2006(1) STR 305 (Tri. Del.)] ii. B4U Television Network (I) P. Ltd. Vs. CST, Mumbai [2014(35) STR 88 (Tri. Mumbai)] iii. CCE ST, Hyderabad-II Vs. State Bank of Hyderabad [2016(43) STR 415 (Tri. Hyd.)] 2.3. The appellant further submitted that the issue involved in the present case is revenue neutral; hence there is no intention to evade payment of duty. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation? 6. The undisputed facts are that the appellant paid service tax amounting to Rs.2,89,78,046/- on various export services which they were not liable to pay in view of the Export of Service Rules, 2005. Also, it is an admitted fact that they have availed cenvat credit on inputs which are cleared as such without reversal of the credit amounting to Rs.2,03,69,372/-, which was confirmed in the impugned order. Before proceeding to analyse the applicability of the relevant Rule 6(3) of the Service Tax Rules, 2004, the same needs to be reproduced, which reads as below:- Rule 6(3) Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against the service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax thereon to the person from whom it was received. 7. A plain and simple reading of the same makes it clear that in the event, the assessee pays service tax in respect of a taxable service which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs as per Rule 3(5B) of the Cenvat Credit Rules, 2004. During the audit, the department was of the view that the appellant is required to reverse Cenvat Credit availed on inputs which were written off as per Rule 3(5B) of the Cenvat Credit Rules. 13. Further, we find that during the relevant period, there was no recovery mechanism under Rule 3(5B) of the Cenvat Credit Rules and the explanation which was introduced vide Notification No. 3/2013 dated 01.03.2013 was from 01.03.2013 vide which it was provided that if the manufacturer of goods or the provider of output service fails to pay the amount payable under sub-rules (5), (5A), and (5B), it shall be recovered, in the manner as provided in rule 14, for recovery of CENVAT credit wrongly taken. This recovery mechanism introduced from 01.03.2013 cannot be made applicable from the retrospective date and it can be only prospective and this issue was considered in various decisions cited (supra) by the Tribunal wherein it was held that when there was no recovery mechanism before 01.03.2013, therefore, no recovery can be affected and accordingly the present proceedings initiated under Rule 14 of Cenvat Credit Rules read with Rule 3( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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