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TMI Blog2025 (2) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 22,06,678/- towards reversal of Cenvat Credit. 2. Facts briefly stated are that the Appellant, a 100% EOU is engaged in the manufacture and clearance of Shoe Uppers, Leather Handle, Leather Pouch, etc. and are availing input service credit on various services such as Rent-a-Cab, personal insurance, Air Travel Agency, courier service, etc amounting to Rs.1,60,77,355/- during the period from 2009-10 to 2010-11. Upon verification of records, the department sought to deny the Cenvat credit availed as the services were neither covered under the definition of input services in terms of Rule 2(l) of CCR nor used by the Appellant directly or indirectly in the manufacture of their final products. Thereafter, the appellant reversed an amount of Rs. 22,06,678/- under protest in respect of Cenvat availed for Rent-a-Cab and Insurance services. A Show Cause Notice dated 04.09.2014 was issued to the Appellant, seeking to recover the ineligible Cenvat Credit of Rs.1,38,70,677/- under Rule 14 of CCR read with Section 11A(1) of the ACT, along with applicable interest, besides proposing to impose penalty under Rule 15(2) of CCR, to appropriate an amount of Rs.4,94,188/- paid towards interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment of Rule 14 and hence Department is not empowered to issue show cause notice when Cenvat Credit was not utilized. 4.2 The Ld. Counsel further submitted that the Appellant was under the bona fide belief that input services on certain services could be availed and thereafter, it has also reversed some amounts under protest which showed the genuineness of the Appellant. Therefore, in the absence of mens-rea to prove that the Appellant wilfully suppressed material facts with an intent to evade payment of duty, the extended period of limitation cannot be invoked. In this regard, reliance was placed on the decision in the case of Commissioner Central Excise and Customs Vs. Reliance Industries [(2023)-SCC Online SC-767)], wherein the Hon'ble Supreme Court has clearly held that an assessee can be accused for suppressing for nondisclosure of the facts which it was otherwise required to be disclosed under the law. Following the above judgment, in the recent case of Jagadamba Powers & Alloys Ltd. Vs. Commissioner of Central Excise [161 taxmann.com 686], the High Court of Chhattisgarh held that once the Department has knowledge of availment of Cenvat credit through the statutory returns, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business of manufacture as the business activity was an integrated/ continuous activity. It was pointed out that upto 31.03.2011, the definition also included the term "activities relating to business" which was deleted by Notification dated 01.03.2011. The Appellant has argued on limitation also contending that the proceedings are time barred. 9. Further, it was submitted that the Show cause notice having been issued after amendment of Rule 14 of Cenvat Credit Rules, 2004 w.e.f. 17.03.2012 which provides for recovery of Cenvat credit 'taken' and 'utilized' wrongly, the Department was not empowered to issue the Show Cause Notice when Cenvat Credit was not utilized by them. 10. The reasons for dis-allowance of Cenvat credit on various services has been detailed infra : - S.No. Reasons for denying the credit Nature of Services 1 Not related to production a) Rent a cab b) Personal insurance c) Air Travel Agent's services d) Business Auxiliary Services e) Commercial or Industrial Construction Services f) Information Technology Software Services g) Chartered Accountant's Services h) Management or Business Consultant's Services i) Commercial Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal." 13. As the issue to be decided in this case pertains to whether the Appellant is entitled for Cenvat credit on various input services used during the course of manufacture of final product and their clearance and as to the activities related to the business for the period prior to 01.04.2011 which is before the definition of input service underwent an amendment, there would be binding precedents which the Ld. Adjudicating Authority necessarily has to examine and adhere to. 14. From the facts of this appeal, it appears that input services viz., Rent a cab, Personal insurance, Air Travel Agent's services, Business Auxiliary Services, Commercial or Industrial Construction Services, Information Technolog ..... X X X X Extracts X X X X X X X X Extracts X X X X
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