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M/s Shree Alloys Industries Pvt Ltd Versus Commissioner of Central Excise And Service Tax, Jaipur-II

2015 (8) TMI 390 - CESTAT NEW DELHI

Clandestine removal of goods - Availment of inadmissible CENVAT Credit - Held that:- Goods have been cleared on the strength of 38 gate passes clandestinely without payment of duty. Obviously, these goods were not to be recorded in the receipt units that they have received the goods without recovery of invoices in their unit. Therefore, these arguments have no force. Further, I find that it is admitted by the Managing Director as well as other officials that they have cleared goods on the streng .....

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ergent views of two High Courts i.e. the Hon'ble High Court of Bombay and High Court of Andhra Pradesh. Therefore, there is no decision of jurisdictional High Court available before me. Therefore, I am examining issue independently. As residential colony have no nexus with the manufacturing activity of the appellant. Therefore, I hold appellant is not entitled to avail input service credit on construction services of residential colony - Decided against the assessee.

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favour of assessee. - Appeal Nos. E/52223-52224/2014-EX(SM) - Final Order Nos. A/51569-51570/2015-EX(SM) - Dated:- 27-4-2015 - Ashok Jindal, Member (J),J. For the Appellant : Ms Sukriti Das, Adv. For the Respondent : Shri R K Mishra, DR ORDER Per: Ashok Jindal: The appellants are in appeals against the impugned orders. As the issue involved is common in both the appeals. Therefore, both are taken up for disposal. 2. The facts of the case are that an investigation was conducted at the premises o .....

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o found that appellant has availed Cenvat Credit on steel items to the tune of ₹ 2,23,221/- which was used in civil construction of factory which was not admissible to the appellant. Further, the appellant also availed Cenvat Credit of ₹ 1,93,972/- on construction services which was used for construction of labour colony. In these set of facts a show cause notice was issued to the appellant for: a) payment of duty on the clearance made by them against 38 gate passes along with intere .....

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ellant filed an appeal before the Ld. Commissioner (A) to challenge the order and Revenue also challenged this order on the premise that the Adjudicating Authority was required to confirm the penalty to the tune of ₹ 23,47,199/- instead of ₹ 19,26,966/-. The Commissioner (A) allowed the appeal of the Revenue and dismissed the appeal filed by the appellant. Aggrieved from both the orders appellant is before me. 4. The Ld. Counsel for the appellant submits that for demand on duty of 38 .....

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e relied on the decision in the case of Vikram Cement (P) Ltd. Vs. CCE Kanpur-2012 (286) ELT 615 (Tri-Del) which has been affirmed by the Hon'ble High Court of Allahabad reported in 2014 (303)00 ELTA82 (Allbd). 5. She further submits that appellant has not contested the denial of Cenvat Credit on the steel items and same has been reversed along with interest. The appellant is seeking waiver of penalty on these steel items as these were in dispute during the period whether they are entitled t .....

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ment of Cenvat Credit on the steel items was not disputed during the relevant period and pending for disposal before this Tribunal. She further submits that the appellant is entitled to take Cenvat Credit on construction services of labour colony in the light of the decisions in the case of Hon'ble High Court of Andhra Pradesh in the case of ITC Ltd. Vs. CCE Hyderabad-2013 (32) STR 288 (AP). Further she submits that the investigation was conducted during the period 15.12.2008 to 20.12.2008 a .....

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of the investigation the Managing Director and other officials have admitted that they have cleared goods from their unit to other units on the strength of 38 gate passes and immediately the appellant paid the duty along with interest. Appellant has also paid 25% penalty on the said clearance which shows that appellant has admitted their fault and paid the duty accordingly. He further submits that during the course of the investigation appellant has not received the goods only invoices has been .....

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ightly denied. On limitation he submits that as the issue of limitation has not been raised by the appellant before the lower authorities. Therefore, same Cannot be raised here. 8. Heard the parties. Considered the submission. 9. In this case there are four issues: a) Whether the appellant are required to pay duty on the clearance on the strength of 38 gate passes which were resumed during the course of investigation or not; b) Whether penalty can be imposed on the appellant for wrongful availme .....

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ngth of these gate passes they have cleared goods to their other units. It is contested by the Ld. Counsel for the appellant that there was no records found in the receiving units whether they have received the goods on the strength of 38 gate passes or not. The main contention of the Ld. Counsel on this issue admittedly that the goods have been cleared on the strength of 38 gate passes clandestinely without payment of duty. Obviously, these goods were not to be recorded in the receipt units tha .....

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e appellant for verification. In these circumstances, the claim of appellant is not sustainable. 11. For imposition of penalty on steel items I find that issue whether appellant is entitled to take Cenvat Credit on steel items or not was in dispute. Therefore, the appellant has already reversed Cenvat Credit along with interest. In these circumstances, I hold that penalty is not imposable on the appellant. 12. For denial of input service Credit on construction services of residential colony I fi .....

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