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M/s The Tree House Hotel Club & Spa Versus CCE, Jaipur

2017 (4) TMI 900 - CESTAT NEW DELHI

Abatement - N/N. 1/2006-ST dated 01/03/2006 - denial on the ground that the assessee has availed credit - Held that: - the appellants have reversed the full Cenvat credit availed alongwith applicable interest later. All the credits alongwith applicable interest, have been reversed before adjudication by the Commissioner - reliance was placed in the case of CCE Jaipur-I Versus M/s. Sanjay Engineering Industries [2016 (8) TMI 93 - RAJASTHAN HIGH COURT], where it was held that subsequent reversal o .....

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Amresh Jain, Authorized Representative (DR) - for the respondent ORDER Per. B. Ravichandran The appeal is against order dated 30/09/2013 of Commissioner of Central Excise, Jaipur. The appellants are engaged in running hotel and provide various taxable services. They are providing short term accommodation to their guests and also rent out their premises for various functions, conference, wedding etc. They are also having restaurant in their premises and are also having a club on membership basis. .....

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d to confirm differential service tax liability consequent on such denial. The Original Authority held that the appellants violated the conditions of the said notification by availing the Cenvat credit on input services and accordingly held, that an amount of ₹ 54,28,759/- is liable to be paid towards service tax by the appellant. He imposed penalty of equivalent amount under Section 78 and further penalty of ₹ 5,000/- under Section 77 of the Finance Act, 1994. 2. Contesting the find .....

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on the following cases in support of his defence :- (a) CCE, Jaipur - I vs. Sanjay Engineering Industries reported in 2016 (43) S.T.R. 354 (Raj.) ; (b) Beekay Engineering Corporation vs. Commissioner reported in 2015 - TIOL - 2458 - CEST- DEL. ; (c) Sonalac Paints & Coatings Limited vs. Commissioner reported in 2015 - TIOL - 77 - SC - CX. (d) CCE & CUS. vs. Precot Meridian Limited reported in 2015 (325) E.L.T. 234 (S.C.) ; (e) Hello Mineral Water (P) Limited vs. Union of India reported i .....

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ind Lamps Ltd. vs. CCE, Kanpur reported in 2010 (250) E.L.T. 237 (Tr. - Del.). 4. We have heard both the sides and perused the appeal records. Admittedly, the appellants availed Cenvat credit on input services and the same was barred when the claim for abatement under Notification 1/2006-ST is made by the appellant. In other words, Cenvat credit on input services and abatement under Notification 1/2006-ST cannot be availed at the same time. However, admittedly, in the present case the appellants .....

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claim for duty concession under the said notification. We note that similar set of facts were considered by the Tribunal and High Courts and Supreme Court. Dealing with the provisions of the very same notification, the Hon ble Rajasthan High Court in the case of Sanjay Engineering Industries (supra) held as below :- 8. We have heard learned counsel for the parties and perused the record. In our view, the order of the Tribunal is just and proper and is not required to be interfered with. The Tri .....

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ce of the final product will relate to a situation as if no credit was ever availed, and Tribunal on finding of fact found that the respondent is entitled to full waiver. 9. The Allahabad High Court in the case of Hello Minerals Water (P) Ltd. (supra), had taken into consideration the question as to whether manufacturer can be treated as not having taken credit on the inputs used in the manufacture of any product even though it was originally taken but subsequently reversed, and held that the Re .....

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ibunal upheld the argument of the assessee therein and held that reversal of credit subsequent to the clearance of the exempted product is in line with the ratio of the Supreme Court judgment laid down in Chandrapur Magnet Wires (P) Ltd. v. Collector, Central Excise, 1996 (81) E.L.T. 3 (S.C.). Accordingly, in our view the said judgment squarely covers the issue raised in the instant appeal. 10. The Gujarat High Court in the case of Ashima Dyecot Ltd. (supra), also took into consideration the jud .....

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he inputs used in the manufacture of copper wire had already been taken in accordance with Rule 57A. Once appropriate entries have been made in the register, there is no rule under which the process could be reversed. It is true that the assessee has not maintained separate accounts or segregated the inputs utilised for manufacture of dutiable goods and duty free goods, as should have been done. But, the Court s attention was drawn to the departmental circular according to which in a case where .....

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aw no reason that why the assessee should not make a debit entry in the credit account before removal of the exempted final product and hence, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A. The Court, therefore, took the view that the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken the credit of the duty paid in the inputs used .....

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n different proposition and distinguishable on facts . 5. Regarding the reliance placed by the Revenue on the decision of the Tribunal in Hind Lamps Ltd. (supra), we note that the Tribunal was examining the provisions of erstwhile Rule 57CC of Central Excise Rules, 1944. The said decision was examined and distinguished by the Tribunal in Punj Lloyd Limited vs. CCE & ST, Rohtak reported in 2015 (40) S.T.R. 1028 (Tri. - Del.). The Tribunal observed as below :- 5. As regards the eligibility for .....

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n of the appellant. No prudent person would take the risk of being saddled with a demand of almost ₹ 14 crores merely for input service credit of just above ₹ 32 lakhs. As regards the possible argument that there is no equity in taxation and exemption notifications have to be construed strictly, suffice to say that in the case of Hello Minerals (supra) the Allahabad High Court has clearly held as under :- 18. In view of the above decision we are of the opinion that reversal of Modvat .....

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cannot make a debit entry in the credit account before removal of the exempted final product . This observation in no way necessarily implies that the Supreme Court would have necessarily found it unacceptable if a debit entry in the credit account was made after removal of the exempted goods, particularly when such debit entry reversed the Cenvat credit along with interest before the primary adjudication. Seen in this light the distinguishing effort by CESTAT in the case of Hind Lamps (supra) .....

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