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2022 (3) TMI 1098 - AT - Central ExciseRecovery of CENVAT Credit alongwith interest and penalty - distribution of CENVAT Credit - allegation in the SCN is that the ISD was distributing service tax credit on monthly basis whereas the pro rata turn over unit for distribution was taken for previous year - Rule 7 of CCR, 2004 - issuance of two SCN for same period - input services or not - admissibility of credit if the address of the service provider and amount of credit distributed is not mentioned in the Challan - distribution of credit on the basis of pro-rata turnover of previous year instead of on the basis of monthly turnover - recovery of amount alongwith interest and penalty. Issue of two show cause notices for the same Period - HELD THAT:- Demand of duty is a matter of assessment. If duty is short paid it can be recovered under Section 11A after issuing a notice. The show cause notice which culminated in the present appeal has nothing to do with duty. It deals with a different issue of Cenvat credit. Irregularly availed Cenvat credit is recoverable under Rule 14 of CCR, 2004. There is no detailed mechanism laid down for recovery under Rule 14 of CCR, 2004 and for this purpose the provisions of Section 11A have been made applicable mutatis mutandis for Rule 14 also. Nevertheless, any recovery of irregularly availed Cenvat credit under Rule 14 is not demand of duty at all. Section 11A deals with the duty which the assessee has to pay on final products. Rule 14 deals with the credit of duty on inputs which someone else had paid which the assessee has taken credit of. Any denial of Cenvat taken will not affect the duty liability. Similarly, any demand of duty will not affect the Cenvat credit. If Cenvat credit is wrongly availed, a penalty can be imposed under Rule 15 of CCR, 2004. If duty is short paid, penalty can be imposed under Section 11AC - there are no illegality in the Revenue issuing two show cause notices; one for recovery of irregular availed Cenvat credit (which is subject matter of the present appeal) and another show cause notice for recovery of duty short paid. It does not amount to two assessments for the same period in this case. Distribution of input service credit only to the appellant - HELD THAT:- From the impugned order, it is not clear how the Commissioner has come to the conclusion that the entire credit has been distributed to only Bhiwadi unit up to September 2015 and excess credit has been distributed to the appellant i.e. Bhiwadi unit from October 2015 to December, 2015 based on his examination of two or three challans - the appellant has submitted Company Secretary’s calculation sheet showing Cenvat credit taken by company on the basis of ISD challan and the distribution of Cenvat credit to different unit by the ISD which was enclosed as Annexure-9 to the reply to the show cause notice filed before the Commissioner. There is no discussion and the impugned order that the Company Secretary certificate was not correct and the Cenvat credit has been wrongly distributed - the charge of the ISD distributed the entire credit to the appellant is not sustainable and needs to be rejected. Address of the service provider and amount credit distributed not being mentioned in the ISD challans - HELD THAT:- Appellant submits that the details were provided in the Annexures to the challans issued by the ISD. The ISD challans must contain details mentioned in Rule 4A of the Service Tax Rules to qualify as Cenvatable documents. We find that these details require a thorough examination of each of the documents on which Cenvat credit is taken. Therefore, this is a fit case to remit the matter to the adjudicating authority for conducting the necessary verification and decide as to which ISD challans, coupled with the Annexures contain all the essential details to be eligible for Cenvat credit. Whether the Commissioner could have denied Cenvat credit on the ground that certain input services do not qualify under Rule 2(l) of CCR, 2004? - HELD THAT:- The show cause notice did not raise this ground and the Commissioner cannot confirm the demand on a new ground. Whether the ISD had distributed the credit incorrectly as held by the Commissioner in the impugned order or has done it correctly as per Rule 7 read with Explanation 3, as applicable during the relevant period? - HELD THAT:- This issue also needs thorough examination by the Commissioner. The impugned order is not vitiated on the ground that another show cause notice demanding short paid duty of excise was issued to the appellant during the same period. The Commissioner was not correct in denying Cenvat credit on the ground that the input service do not qualify under Rule 2(l) of the CCR, 2004 because the appellant was not put to notice on this ground. It is apparent from the records produced by the learned Counsel that the headquarters of the appellant had distributed the Cenvat credit to the appellant as well as to other units - the matter needs to be remitted to the adjudicating authority for determining the above two facts and re-computing the liability of Cenvat credit, if any. The appeal is allowed by way of remand to the adjudicating authority.
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