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2014 (4) TMI 1031 - HC - Central ExciseDenial of CENVAT Credit - Interest under Rule 14 of the Cenvat Credit Rules 2004 read with Section 11AB of the Central Excise Act, 1944 - Held that:- while passing the OIO the adjudicating authority has denied the CENVAT credit to the petitioner on various other grounds for which no show cause notice was issued and no opportunity has been given to the petitioner. It appears that the show cause notice for denying the CENVAT credit was issued only on the ground that the petitioner has availed the credit of service tax on commission for sale of finished goods, which cannot be said to be relating to manufacturing activities but relating to sales activities (i.e. after manufacturing activities). However, while passing the OIO though the adjudicating authority has held that Business Auxilliary Service (BAS) on account of sales commission can be considered as Input Service within the definition of rule 2(I)(ii) of Cenvat Credit Rules, 2004 and the service tax paid on the said service is admissible as credit to the manufacturer, subject to certain conditions, the adjudicating authority has denied the Cenvat credit on altogether other grounds (mentioned in para 12.4 to 12.6 of the OIO) for which admittedly no show cause notice has been issued and no opportunity has been given to the petitioner. Under the circumstances, the OIO dated 31.03.2012 can be said to be in breach of principle of natural justice. Under the circumstances, the impugned OIO deserves to be quashed and set aside and the matter is remanded to the first adjudicating authority to consider the issue afresh in accordance with law and on merits - Decided in favour of assessee.
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