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2019 (10) TMI 167 - AT - Central ExciseCENVAT credit - input services or not - minimum take of pay (MTOP) charges - electricity charges - extended period of limitation - penalty - HELD THAT:- As per the Product Supply Agreement dated 06.06.2005 between the appellant and M/s Praxair India Pvt. Ltd., the appellant is required to lift the particular quantity of gases and in the event of any failure on the part of the appellant to take products mentioned in Article 8.1, the appellant will be required to pay MTOP charges paid towards non-lifting of gases on which the Service Tax has been paid by the seller. Further, in the present case, MTOP charges are for the purpose of non-lifting of the goods and it is a fact that the goods have not been lifted by the appellant and they have not been received and used in the manufacturing activity or output services. Further, the said services were not used directly or indirectly by the appellant in the manufacturing activity and therefore there is no nexus between the said services and the final product produced by the appellant. Though the CBEC has issued Instruction dated 10.11.2014 but the said Circular also clarified that when the gases are used as inputs by another assessee, the admissibility of the credit of the duty paid will be decided in accordance with CCR, 2004. Extended period of limitation - HELD THAT:- Taking of CENVAT credit on declared services is a matter of interpretation of law and therefore there is no justification invoking larger period alleging suppression of fact with malafide intention to evade tax. The demand for the normal period is confirmed - the demand invoking extended period of limitation set aside - case remanded back to the Original Authority for quantification of the demand for the normal period along with interest - Penalties under Rule 15 (1) and (2) of CCR, 2004 read with Section 11AC of the Central Excise Act, 1984 are also set aside. Appeal allowed in part by way of remand.
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