2011 (6) TMI 358 - AT - Service Tax

Predeposit of CENVAT Credit interest and penalty - Held that - Since the assessee has utilized service tax credit for payment of excise duty the provisions of Section 35 of the Central Excise Act 1944 are applicable. Since the appeals have admittedly been filed before Commissioner (Appeals) beyond the period of 30 days after the expiry of the statutory period of limitation dismissal of appeals as time-barred is legally justifiable. The decision in the case of Ashima Ltd. Vs CCE Ahmedabad 2010 (6) TMI 308 - CESTAT AHMEDABAD relied upon by assessees is not relevant to the present appeals as that decision relates to refund of service tax.

Summary

Issues:
1. Disallowance of CENVAT Credit on service tax paid for maintenance and insurance services for wind mills.
2. Treatment of appeals as Central Excise appeals by the lower appellate authority.
3. Filing of appeals under the Central Excise Act or the Finance Act based on the nature of credit taken.
4. Applicability of time limits for filing appeals under Section 35 of the Central Excise Act.
5. Justifiability of dismissal of appeals as time-barred.

Analysis:
1. The issue arose from the disallowance of CENVAT Credit on service tax paid for maintenance and insurance services for wind mills by the assessees, who are engaged in the manufacture of rubber products. The adjudicating authority disallowed the credit, leading to demands, interest, and penalties. The appeals were filed before the Commissioner (Appeals) but were treated as Central Excise appeals by the lower appellate authority, resulting in dismissal due to being time-barred.

2. The lower appellate authority treated the appeals as Central Excise appeals as the appellant was solely a manufacturer and not a provider of output service. The appeals were dismissed as time-barred since they were filed beyond the condonable delay period. The issue revolves around the correct categorization of the appeals and the subsequent treatment under the appropriate laws.

3. The crux of this issue lies in determining the correct framework for filing appeals based on the nature of credit taken. The judgment clarifies that appeals related to CENVAT Credit taken for manufacturing excisable goods fall under the Central Excise Act, while those related to output services come under the Finance Act. The language of Rule 14 of the CENVAT Credit Rules is pivotal in guiding the filing process based on the type of credit involved.

4. The applicability of time limits for filing appeals under Section 35 of the Central Excise Act is crucial in this case. Since the appeals were filed beyond the prescribed period after the statutory limitation, the dismissal of appeals as time-barred was deemed legally justifiable. The judgment cites relevant legal provisions to support this decision and distinguishes it from precedents related to service tax refunds.

5. Ultimately, the judgment upholds the impugned order and rejects the appeals, emphasizing the legal validity of dismissing the appeals as time-barred due to the late filing. The decision was pronounced on 16th June 2011, and the annexure provides details of the CENVAT Credit amounts, penalties, and interest involved in each appeal, reinforcing the financial implications of the case.