TMI Blog2018 (9) TMI 1438X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 4(3)(c) of 1944 Act read with Rule 2(t) of the Rules 2004 availed the Cenvat Credit which was not available, the Revenue, was within its right in imposing recovery, interest and penalty. No substantial question of law arises for consideration - appeal dismissed. - Central Excise Appeal No. 72/2018 - - - Dated:- 14-9-2018 - Shri Sanjay Yadav And Shri Ashok Kumar Joshi JJ. For the Appellant : Shri Alok Kumar Sharma, learned counsel JUDGMENT Per Justice Sanjay Yadav: This appeal under Section 35(G) of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 is directed against order dated 02/07/2018 in appeal No. ST/51046/2018-EX(SM) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi affirming the order of disallowing Cenvat Credit of ₹ 70,714/-, recovering thereof and the penalty under Section 78 of the Central Excise Act, 1944. [2] The facts giving rise to the controversy briefly are that, the appellant is engaged in the manufacture of excisable goods falling under Chapter 34 of Central Excise Tariff Act, 1985. It is also availing Cenvat Credit facility on inputs, capital goods and input servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the place of removal was defined in Cenvat Credit Rules, the definition under section 4 was to be held good. 8. In view of the above, it is clear that prior to 11.07.2014 also, the cenvat credit on outward freight beyond the place of removal was not admissible to them in terms of rule 2(I) of the Cenvat Credit Rules, 2004 read with rule 2(f) of the Cenvat Credit Rules, 2004. Therefore, the cenval credit of service tax amounting to ₹ 70,714/- (BED ₹ 68,666/-, Ed Cess ₹ 1,364/-, and H S Ed Cess ₹ 684/-), availed by the Noticee on outward freight beyond the place of removal is liable to be recovered from them along with interest under rule 14 of the Cenvat Credit Rules, 1994 read with section 11A and 11AA of the Central Excise Act, 1944. 9. By wrongly taking the credit of service tax, in contravention of rule 2(I) read with rule 2(t) of the Cenvat Credit Rules, 2004, with intent to evade payment of duty, the Noticee also appear to have rendered themselves liable to penalty under rule 15 of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1994. [7] The appellant was also subjected to levy of penalty under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7(7) S.T.R. 625 (S.C.) that service tax and excise duty are consumption taxes to be borne by the consumer and, therefore, if credit is denied on transportation service, the levy of service tax on transportation will become a tax on business rather than being a consumption tax. The submission of the Revenue that CENVAt credit cannot be allowed for services if the value thereof does not form part of value subjected to excise duty is clearly against the fundamental concept laid down by the Supreme Court in the All India Federation of Tax Practitioners case. There is an additional reason for holding that CENVAT credit is admissible on services even if the value thereof is not part of the value subjected to duty. This is because the interpretation of the expression input services cannot fluctuate with the change in the definition of value in Section 4 of the Central Excise Act and cannot vary depending on whether the goods are levied to duty under Section 4A of the Central Excise Act or tariff value under Section 3(2) of the Central Excise Act or the product attract specific rate of duty. [9] Accordingly, it held that the definition of input service has to be interpreted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 is time barred as issued beyond normal period of one year as the Show Cause Notice was issued on 20.01.2016? (iii) Whether the Tribunal and the appellate Authority was justified in holding the entitlement of department for invocation of the extended period for the demand beyond one year on the ground of suppression, since no suppression of material fact is alleged or established against the appellant? [13] Clause (a) of sub-section (1) of Section 11A of 1944 Act stipulates:- 11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded.- (1) Where any duty of excise has not been levied or paid or has been shortlevied or short-paid or erroneously refunded, for any reason,other than the reason of fraud or collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty,- (a) the Central Excise Officer shall, within two years from the relevant date,serve notice on the person chargeable with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue and these ingredients need to be clearly brought out in the Show Cause Notice alongwith evidence thereof. The active element of intent to evade duty by action or inaction needs to be present for invoking extended period. [16] It is urged that if extended period of five years are availed, incumbent it is upon the Revenue to spell out the ingredients for invoking the extended period of five years with evidence on record. And the onus is on the revenue to establish the same. [17] Reliance is placed on the decision in Escorts Limited Vs. Commissioner of Central Excise, Faridabad [(2015) 9 SCC 109] and M/s Larsen and Turbo Ltd. Vs. The Commissioner of Central Excise, Pune - II [2007 AIR SCW 6234] to substantiate the contentions. [18] In M/s Larsen Turbo Ltd. (supra), in respect of period March 1993 and December 1994 show cause notice on 27/01/1994 was issued for recovery of ₹ 32,35,575/- in regard to manufacture of 75 PSC girders but excise duty was paid. The said show cause was withdrawn and after a long time on 01/05/1996 another show cause was issued on same premise by invoking extended period of limitation under Section 11A(4) alleging suppression of fact. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was requested to pay the amount of ₹ 70,714/- along with interest and penalty, but since he failed to pay and took plea that the provision was subsequently added in rules, the show cause notice clearly stipulated that:- 9. By wrongly taking the credit of service tax, in contravention of rule 2(I) read with rule 2(t) of the Cenvat Credit Rules, 2004, with intent to evade payment of duty, the Noticee also appear to have rendered themselves liable to penalty under rule 15 of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1994. [21] Clause (e) of sub-section (4) of Section 11A stipulates that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, by the reason of contravention of any of the provisions of the Act of 1944 or of the rules made thereunder with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall,within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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