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M/s. India Telephone Industries Ltd. Versus Commissioner of Central Excise and Service Tax, Calicut

2017 (10) TMI 739 - CESTAT BANGALORE

CENVAT credit - irregular availment - Rule 4(7) of the CCR, 2004 - Held that: - the appellants have taken the ineligible CENVAT credit in violation of the provisions of Rule 4(7), in respect of the input service for which they have not made payment within three months from the date of receipt of invoices - this aspect of availment of CENVAT credit was detected during the audit conducted by the Revenue and thereafter the appellant reversed the entire ineligible credit in their CENVAT credit accou .....

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nd there is no suppression on their part nor Revenue has brought any evidence on record to show that they had any intention to evade payment of tax - penalty set aside. - Appeal allowed in part. - E/20707/2016-SM - 22439/2017 - Dated:- 18-7-2017 - Shri S. S. Garg, Judicial Member Shri B.V. Kumar, Advocate For the Appellant Dr. J. Harish, Dy. Commissioner ( AR ) For the Respondent ORDER Per : S. S. Garg The present appeal is directed against the impugned order dt. 30-11-2015 / 03-12-2015 pass .....

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rty noticed that the appellant has availed CENVAT credit amounting to ₹ 1,23,96,927/- based on the service tax invoices received from input service providers. However the value of the service and service tax paid or payable as indicated in the invoice / bill was not made within three months from the date of invoice/bill. Further the service tax availed on the basis of the said invoices of the service provider was not reversed as required under Rule 4(7) of the CENVAT Credit Rules, 2004. Fu .....

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credit availed by them. It was also found on verification of ER return for the month of March, 2012 and April, 2012 and the statement of CENVAT credit availment and utilisation, it was found that ITI had availed an ineligible input service tax credit of ₹ 1,21,57,322/-, out of which an amount of ₹ 74,33,595/- was utilised for payment of service tax on certain services during the period March 2012 and July, 2012. The appellant filed the reply to the show-cause notice and after followi .....

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impugned order is also contrary to the binding judicial precedent on the same issue. He further submitted that the CENVAT credit amounting to ₹ 1,29,96,927/- availed by the appellant during the period February 2012 to April 2012 and ₹ 3,817/- availed during the period September 2011 and January 2012 was reversed by the appellant in August 2012 i.e. much before the issuance of the show-cause notice dt. 28/08/2013 which is an admitted fact in the show-cause notice and the impugned ord .....

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it before which ineligible CENVAT credit is required to be reversed. On the contrary, the said rule provides for retaking of the CENVAT credit which has been reversed by the assessee as and when the payments are made. He also submitted that in view of the fact that the appellant has reversed the CENVAT credit in August 2012 itself before the issue of show-cause notice, they are not liable to pay interest or penalty under Rule 15 of CCR. He also submitted that the demand of interest on the allege .....

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Metal Decor (P) Ltd. [2010 (256) ELT 524 (All.)] He also submitted that the appellants have been regularly filing their monthly returns in ER2 and ST3 and there was no suppression of facts on their part with an intention to evade payment of duty. Therefore penalty under Rule 15(3) is not sustainable in law. 5. On the other hand, the learned AR defended the impugned order and submitted that the appellant has violated the provisions of Rule 4(7) of CCR and has taken ineligible CENVAT credit and wh .....

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12. He also submitted that since the appellant has utilised the ineligible CENVAT credit, therefore, he is liable to pay the interest and penalty and the decisions relied upon by the appellant cited supra are not applicable in the facts and circumstances of the present case. 6. After considering the submissions of both the parties and perusal of the material on record, I find that the appellants have taken the ineligible CENVAT credit in violation of the provisions of Rule 4(7) of the CCR, 2004 .....

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