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TMI Blog2025 (1) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... ticed in the ST-3 returns and the Cenvat Credit Register - HELD THAT:- The difference between the amount of Cenvat credit availed as reflected in the Cenvat Credit Register than the one recorded in the ST-3 returns is an admitted fact, however, the contention of appellant is that the Cenvat Credit Register shows that 100% credit was taken by the appellant during the period in dispute in their credit register but only 50% thereof as has been utilized is reflected in their ST-3 returns. The difference is due to the balance 50% of the amount which was not utilized and therefore was not shown in the ST-3 returns - The perusal makes it clear abundantly that it was the statutory mandate on the appellant-assessee to utilize only 50% of the Cenvat credit availed on the capital goods. The department has not produced any evidence to falsify the same. In the case of J.K. TYRE & INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [2016 (11) TMI 911 - CESTAT BANGALORE - LB], Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch evidence produce. Hence, there is no rebuttal to the said contention of the appellant - The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable. Extended period of limitation - HELD THAT:- The appellant had been regularly filing its ST-3 returns and its records were being regularly audited by the department. Thus, the entire material was already to the notice of the department. In such circumstances, the appellant cannot be held accountable for not disclosing the activity of making provision made by it, specifically, when the same was not required in the law. It is held that suppression of facts has wrongly been alleged against the appellant - This Tribunal in the case of INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [2013 (9) TMI 310 - CESTAT AHMEDABAD] held that PSU cannot have mala fide intentions for non-disharge of duty and there cannot be an allegations of intention to evade duty. Hon'ble High Court of Punjab & Haryana in the case of COMMISSIONER VERSUS MARKFED REFINED OIL & ALLIED INDU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2011, June, 2011, July, 2011 and September, 2011 the party took excess credit totaling to Rs. 1,79,11,286 in violation of the provisions of Rule 9 (5) of the CCR in respect of capital goods. It was noticed that the credit balance shown in the credit register was less whereas while showing the opening balance in the ST-3 returns for the respective months, the party declared a higher opening balance, thus resulting in said excess credit. Although the party pleaded that the excess credit was related to capital goods which was only taken but was not utilized by them. However they failed to submit any documentary evidence in this regards. (c) The party received credit on the basis of Advice of Transfer Debit (ATD) issued by the CGMT, Dehradun (Input Service Distributor). It was noticed that out of the total credit of Rs. 95,87,097/-, passed by the ISD vide ATD dated 28.02.11, credit of Rs. 25,81,848/- was passed without any supporting document in violation of Rule 9(5) of the CCR. Although the party contended that it relates to credit which was not taken by them earlier. However, still no documents were provided by them. (d) M/s BSNL had also availed credit of Rs. 59,94,339/- on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of Cenvat credit taken and utilized on inputs and capital goods as mentioned in the credit register and ST-3 returns for the months of November 2010, January 2011, February 2011, March 2011, June 2011, July 2011 and September 2011. It is submitted that the aforesaid difference is due to the fact the Appellant has recorded 100% credit amount on inputs and capital goods under the column of credit taken in ST-3 returns, however has recorded 100% credit amount of inputs and only 50% credit amount of capital goods in its credit register. The same can be corroborated from the ST-3 returns filed and credit register maintained, for the relevant period. 3.1 It is further submitted that the appellant though has taken 100% credit on capital goods in their credit register/books, however, has utilized only 50% thereof in the first year as their eligibility. It has also been informed that the said act is permissible in terms of Rule 4(2)(a) of Cenvat Credit Rules, 2004. Hence the difference as noticed in the credit register and the ST-3 returns is purely because of the said reason. The register showed 100% of Cenvat credit whereas the service tax returns showed 50% thereof based on what wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the department. Hence, suppression/mis-representation has wrongly been alleged against the appellant. It is further submitted that non-disclosure of information which was not required to be disclosed under the law does not amount to suppression. The extended period has therefore wrongly been invoked while issuing the impugned show cause notice. The appellant is otherwise a public sector undertaking. The mala fide can never be presumed against the PSUs. The decision in appellant's own case vide Final Order No. 40505/2024 dated 30.04.2024, CESTAT Chennai has been relied upon. Following decisions have also been relied upon: (i) Mahanagar Telephone Nigam Ltd. Vs. Union of India reported as 2023 (73) GSTL 310 (Del.) (ii) GD Goenka Private Limited Vs. Commissioner of Central Goods and Service Tax, Delhi South, Final Order No. 51088/2023 dated 21.08.2023, CESTAT New Delhi (iii) Omega Biotech Ltd. Vs. Commissioner of CGST, Dehradun, Final Order No. 51548/2023 dated 14.11.2023, CESTAT New Delhi (iv) Ajay Mishra Vs. Commissioner of Service Tax, Delhi-III, 2023 (386) ELT 310 (Tri.-Del.) (v) Hero MotoCorp Limited Vs. Commissioner (Appeals), Central Excise and CGST, Jaipur, Final Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f both the parties, perusing the entire records including the order under challenge, we observe that following demands proposed in the show cause notice dated 26.08.2015 have been confirmed: Para of the SCN Issue Involved Demand Proposed Demand Proposed 2(a) Inadmissible credit on gardening services 51,606 51,606 2(b) Excess availment of credit on capital goods 1,79,11,286 1,79,11,286 2(d) Inadmissible credit without any detail of input service 59,94,339 59,94,339 2(e) Short payment of Cess amounts 6,46,533 6,46,533 2(f) Interest on late payment of Service tax for September 2011 2,959 2,959 2(g) Short payment of Service tax during the period from April 2012 to June 2012 9,376 9,376 2(h) Non-payment of amount under Rule 6(3) of the Credit Rules related to exempted village panchayat telephones 13,559 13,559 (appropriated) and interest demand confirmed 2(i) Non-payment of amount under Rule 3(5A)(b) of the Credit Rules on sale of capital goods as scrap 19,83,893 19,83,893 2(k) Non-payment of interest due to date of tax liability as per the POT Rules 4,952 4,952 and following two demands have been dropped: Para of SCN Issue Involved Dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mong others:- (i) Commissioner of Central Excise and Service Tax, LTU, Bangalore Vs. Bill Forge Pvt. Ltd. [2012 (279) ELT 209 (Kar.)] (ii) M/s. SAIL Vs. Commissioner of GST and Central Excise, Bolpur [E/78557 of 2018 dated 20.09.2019] 7.1.3 The relevant portion of the judgment of the Hon'ble High Court of Karnataka in the case of Bill Forge Pvt. Ltd. (supra) is extracted below:- "7. In the light of the aforesaid material on record and rival contentions, the substantial question of law that arises for consideration in this appeal is as under : "The words "Cenvat Credit has been taken", does it mean making an entry in the account books showing the entitlement of the said credit? or does it mean the said credit found in the account books actually taken while clearing the finished products.?" 20. From the aforesaid discussion what emerges is that the credit of excise duty in the register maintained for the said purpose is only a book entry. It might be utilised later for payment of excise duty on the excisable product. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. It matures when the excisable produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has clearly been held as good as the non availed Cenvat credit. In the light of this discussion, we do not find any justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside. 7.2 Issue No. 2 7.2.1 For this purpose, we foremost look into the definition of input services given under Rule 2(l) of Cenvat Credit Rules. The definition has undergone tremendous change. We find that the definition of input services prior to 01.04.2011 had two parts i.e. a main part of the definition and an inclusive part of the definition. After 01.04.201, the definition got 3 parts i.e. main part, an inclusive part and an exclusive part also. For a service to qualify as 'input service' under Cenvat Credit Rules, 2004 post 2011, the service in question need not be covered by the very wide definition of manufacture under Section 2(f) of the Central Excise Act but under two clauses of said definition other than the exclusion clause. Any service which is used not only in manufacture but also 'in relation to' manufacture will also qualify as input service. The scope of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Ericsson India Pvt. Ltd. (supra). 7.3.2 Above all, we are of the opinion that the Rule 3(5A) cannot apply in a situation where Cenvat credit has not been availed on capital goods. In the present case, the appellant's plea is that the scrap material in question pertains to those capital goods on which the appellant had not availed the Cenvat credit, as majority of those capital goods were purchased prior to 2004 i.e. prior the enactment of Cenvat Credit Rules. The details of those capital goods were duly been provided by the appellants. The onus was of the department to prove that the appellant has availed the Cenvat credit on the capital goods which later got cleared as scrap but there is no such evidence produce. Hence, there is no rebuttal to the said contention of the appellant. We draw our support from the decision of Hon'ble Apex Court in the case of Commr. of C. Ex., Chandigarh Vs. Khalsa Charan Singh and Sons, 2010 (255) ELT 379 (P&H), wherein it was held that the burden of proof, on which deemed modvat credit is claimed are duty paid, was on Revenue and not on assessee. Hon'ble Apex Court also in the case of Commr. of Customs Vs. Auto Ignition Ltd. reported as 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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