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CCE, Jaipur Versus M/s Samcor Glass Ltd.

2016 (9) TMI 684 - CESTAT NEW DELHI

Cenvat Credit - pre-mature credit on input services - credit availed before making payment - Scope of Rule 4(7) of Cenvat Credit Rules, 2004 - Held that:- Merely because the respondent have made an entry in their records prior to the date when the credit became due to them, would not result in denial of the credit. Similarly, if the credit has not been utilized by them prior to the said date of admissibility; no demand of interest can be made against them and no penalty can be imposed. - Cen .....

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assed by Commissioner (Appeals) Revenue has filed the present appeal. I have heard Shri R.K. Mishra, learned AR appearing for the Revenue. Nobody appeared for the respondent. 2. As per facts on record, the respondents are engaged in the manufacture of glass shell falling under Chapter 70 of the 1st Schedule to Central Excise Tariff Act, 1985 and were availing the input credit of service tax paid on various input services. As per the audit conducted, it was found that during that period December .....

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e initiated against them which resulted in passing of an order by the Additional Commissioner, Central Excise confirming the demand alongwith interest and imposing penalty upon the respondents. On appeal, Commissioner (Appeals) set aside the impugned order by observing as under :- 8. I have carefully gone through the facts of the case and submissions made by the revenue and M/s Samcor. The issue involved in this appeal is (i) whether the confirmation of the demand of wrongly availed service tax .....

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vailed by M/s Samcor falls under the definition of input service in terms of Rule 2 of Cenvat Credit Rules, 2004, the service tax was paid by the service provider, the services were utilized in the manufacture of goods/providing output service. As per Rule 4 (7) of Cenvat Credit Rules, 2004 Cenvat credit on input service can be allowed on or after the date on which payment is made of the value of input service and service tax payable as indicated in the invoice, bill, challan. In this case the u .....

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ke the said service tax credit. I find that in this case there is no dispute that M/s Samcor is entitled to the service tax credit taken in this case since ultimately they have made payment of the value of the taxable service and service tax thereon to the service provider but the allegation is that they have taken the credit prematurely. M/s Samcor has paid the interest of ₹ 22,217/- for the intervening period i.e. from the date they took credit till the date they became entitled to the c .....

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ter, a report in this regard was also called for from the Jurisdictional Assistant Commissioner who vide their letter C. No. V (70)3/05/Dem/07-08/9168 dated 03/12/2009 has intimated that the Annexure A to the show cause notice has been checked with returns filed by the assessee. The assessee had taken credit during a particular month. The balances opening and closing and credit taken as well as utilized during these months under question has been checked and it has been found that in none of the .....

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0119 (Tri. Mumbai) has held that : The goods are duty paid and used in the manufacture of finished goods. The only lapse on the part of the respondents is that instead of taking credit on 08/4/1994 the credit was taken on 06/4/1994. It is also not brought on record that this credit was utilized before 08/4/1994. As long as there is no dispute regarding receipt and utilization of inputs in the appellant s factory for manufacture of finished goods the Modvat credit being a substantial right canno .....

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377; 22,217/- for the intervening period, I therefore, do not find any merit in the findings of the adjudicating authority and accordingly set aside the order denying the credit of ₹ 11,88,500/- to M/s Samcor. (ii) As regards demanding of interest for the intervening period i.e. the date they took credit and the date they became entitled to the same after making payment to the service provider, I find that credit taken by them was not utilized as evident from the jurisdictional Assistant C .....

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larified that if Cenvat credit is reversed before utilization, it would amount to credit not having been taken. From the records it is proved that M/s Samcor have not utilized the credit prior to entitlement of the same, therefore, following the decision of Apex Court in the case of M/s Bombay Dying & Mfg. Co. Ltd. (supra) and the Board Circular referred to above I set aside the impugned order demanding interest on the credit which has not been utilized till they became entitled to it. (iii) .....

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e rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-Section (2) of Section 11A, shall also be liable to pay a penalty equal to the duty so determined. In the instant case it has been held in the previous para that the demand of wrong availment of Cenvat credit is not sustainable under Section 11A (2) of Central Excise Act, 1944, therefore in absence of confirmation of demand under Section 11A (2) there is no question of any p .....

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