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M/s Tanay Landcon India Pvt. Ltd. Versus CST & ST, Jaipur

2015 (6) TMI 784 - CESTAT NEW DELHI

Irregular/ unauthorized availment of Cenvat credit - Charges of no separate accounts maintained while providing both taxable and exempted services - Held that:- If there was a doubt either regarding maintenance of separate accounts or utilizing credit on common inputs/input services, as required under Rule 6 (2) of the Cenvat Credit Rules, the authorities ought to have summoned the appellants records or should have verified from the appellant s premises, whether assessee had incorrectly pleaded .....

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. In the absence of the Adjudicating Authority recording a clear finding that the assessee failed to maintain separate accounts and on the basis of some evidence in support of such conclusion, the inference of a failure to maintain separate accounts, is a finding of fact based on no evidence. It is therefore perverse.

On the basis of submission it is contended, that if it was found that the appellant had availed credit on inputs and input services which are common to both taxable and .....

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hargava and Anupam Mishra, Advocates For the Respondent : Shri Amresh Jain, Authorized Representative (DR) ORDER Per. Justice G. Raghuram :- As we shall establish in the following analysis, the impugned order is grossly perverse and benefit of minimal analysis of relevant facts and the material on record. 2. On 18/10/12, show cause notice was issued to the appellant/ assessee proposing recovery of ₹ 73,68,121/- for irregular/ unauthorized availment of Cenvat credit in violation of Rule 6 o .....

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t services is incorrect and baseless and it had availed credit only in respect of inputs and input services used for providing taxable services. Appellant also categorically pleaded that the show cause notice failed to reveal any basis for the allegation of irregular availment of credit on inputs related to both taxable and exempted services. 4. In the adjudication order, after reproducing contents of the show cause notice in paragraph 1 to 8, the response of the assessee is set out in paragraph .....

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credit was not availed on inputs and input services used for providing both taxable and exempted services. 5. In para 27 the Authority records an observation that the appellant did not dispute to be engaged in providing both taxable and exempted services and to have availed Cenvat credit on input/input services such as cement, insurance of vehicle, advertising services which are common. We find no basis whatsoever for this conclusion recorded by the Authority. The appellant nowhere admitted to .....

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the Department to establish that the appellant have not maintained separate records . This observation is fallacious. Revenue had alleged that the appellant failed to maintain separate accounts. The appellant disputed this allegation and specifically pleaded to have maintained separate accounts and to have used only, those inputs/input services which were used for providing texable services. If there was a doubt either regarding maintenance of separate accounts or utilizing credit on common inpu .....

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mis-conception substrating the impugned order, that it is the appellant s burden to establish maintenance of separate accounts, when Revenue alleges such non-maintenance and alleges utilization of credit on common inputs, is fatal to the validity of the impugned order. 7. Learned DR would contend that the show cause notice dated 18/10/12 is accompanied by three RUDs i.e., Annexure A, the Assessee s letter dated 04/1/11 and IAR No. 906 of 2010; that these RUD s constitute the basis for issuance o .....

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xable and exempted services or had utilized common inputs/input services. There is not a single sentence in the entire adjudication order which records the evidence or material on the basis of which the Adjudicating Authority records the finding that the appellant failed to maintain separate accounts. We have earlier noticed that in para 27 it is observed that it is not the burden of Revenue to establish that the appellant maintained separate accounts. In the absence of the Adjudicating Authorit .....

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order cannot be sustained. 9. Learned Counsel for the appellant refers to the judgment of this Tribunal in Okay Glass Industries vs. CCE, Kanpur reported in 2015 TIOL 428 CESTAT DEL. to alternatively urge that even if the appellant had availed Cenvat credit on inputs or input services which were common to both taxable and exempted services, the demand could legally be confined only to the extent of the credit availed on exempted services. Learned Counsel has provided an executive summary whereby .....

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