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2014 (7) TMI 121 - AT - Central ExciseCENVAT credit - Trading activity - Duty demand - Penalty - Non maintenance of separate accounts for taxable and non taxable activities - Applicable provision - Held that:- Recovery of wrongly availed credit is provided for under Rule 14 of CCR, 2004. If the credit is utilized for payment of excise duty, the applicable provisions are Rule 14 read with Section 11A. if the appellant is mainly a service provider, recovery will be made under the said rule 14 read with section 73 of the Finance Act. In the present case, the appellant is a manufacture of excisable goods and the credit taken on input services has been utilized for payment of duty on excisable goods. Therefore, the correct provision for recovery of wrongly availed credit is Rule 14 of CCR, 2004 read with Section 11A of the Central Excise Act, 1944. Lack of Jurisdiction - Held that:- Wrongly availed credit has to be recovered from the person who has availed the credit and not from the person who has distributed the credit. In the present case, it is the appellant who is a central excise registrant who has availed the credit and therefore, recovery of wrongly availed credit has to be made from the appellant by the jurisdictional excise authorities. Therefore, we do not find any lack of jurisdiction in the present case. Whether CENVAT Credit can be taken in respect of trading prior to 1-4-2011 - appellant is not an output service provider in respect of all the traded goods and no evidence has been placed before us in this regard. In such a situation, the question of taking credit on input service and its utilization thereof cannot be permitted at all prior to 1-4-2011 - Following decision in case of Mercedes Benz [2014 (4) TMI 12 - CESTAT MUMBAI]. Whether extended period of time could have been invoked for recovery of credit wrongly taken - Knowledge/awareness of the department is not a relevant factor for invoking extended period of time. It is not the appellant's case that they had declared to the department the fact of availing credit attributable to the trading activity either in the statutory returns filed or otherwise. The facts on record prove otherwise. The decision of this Tribunal in the case of Tigrania Metal & Steel Industries [2001 (3) TMI 155 - CEGAT, COURT NO. II, NEW DELHI] and of the hon'ble High Court of Gujarat in the Neminath Fabrics case [2010 (4) TMI 631 - GUJARAT HIGH COURT] support this view. In view of the above factual and legal position, invocation of extended period of time cannot be faulted at all - Conditional stay granted.
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