Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2020 (3) TMI 320

..... D THAT:- It appears from the submissions, and from a perusal of the impugned order, that the contentions of the appellant have not been examined by the adjudicating authority. This is grievous remiss that can be rectified only in fresh proceedings. In the dispute before us, the reversal of credit before issue of show cause notice renders the taking of credit to have been erased ab initio. There is not even a whiff of allegation that the credit reversed had been utilized, or could have been utilized, to the detriment of the exchequer. The renunciation of jurisdiction to adjudicate upon the claim for exclusion from interest liability does not appear to have been sanctioned by the decision of the Hon’ble Supreme Court. From a perusal of rule 14 of CENVAT Credit Rules, 2004 and, in particular, of the disjunctive collation of ‘taken’, ‘utilized’ and ‘erroneously refunded’ with the expression ‘wrongly’ qualifying, not all three but only two of these, it would appear that the assumption of credit and a refund of credit, if wrong, would have to pay the price in the form of ‘interest.’ However, it is unusual for ‘utiliz .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... he incorporation of the taxable service in Finance Act, 1994. Common to both notices was the allegation of delayed payment of tax, primarily by debit of CENVAT credit, for which recovery of such amounts, along with interest, was proposed and the allegation of availment of credit against debit notes issued by their divisions and branches. The assessee had reversed such credit and the adjudicating authority, taking note of discharge of tax liability though belatedly, dropped the proposal demanding the tax dues and limited the recovery to appropriate interest besides imposing penalty for wrongful availment. The other three issues raised in the first show cause notice pertain to upfront availment of duty paid on capital goods instead of bifurcation over the first and second years, availment of credit of tax on input services and duties on capital goods that were utilised for providing inter-connection usage before the usage charges were made liable to tax under Finance Act, 1994, and credit having been taken more than once against the same document. In the adjudication order of Commissioner of Central Excise, Mumbai-II, interest liability of ₹ 1,28,80,551 and ₹ 12,21,933 fo .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... o the claim for interest thereon. are abundantly clear in supporting his contention. He submits that the adjudicating authority had failed to render a finding on this critical aspect. Furthermore, the availability of credit for carrying forward the ineligible amount to the following year is a clear indication of the lack of any of the ingredients that warrant invoking of the extended period in section 11 A of Central Excise Act, 1944 and this, according to him, is another aspect that appears to have been ignored by the original authority. 4. Relying on the decision of the Hon ble High Court of Madras in Shah Yarn Tex (P) Ltd v. Commissioner (Appeals), Coimbatore [2016-TIOL-351-HC-MAD -CX] and that of the Tribunal in Oil and Natural Gas Corporation Limited v. Commissioner of Central Excise and Service Tax, Surat [2015 (1) TMI 41-CESTAT Ahmedabad] holding that 5…… It has to be thus held that interest is not payable with respect to duty required to be debited in the CENVAT Credit Account provided sufficient balance was available in the CENVAT Credit Account. Nothing has been brought on record that such a credit was not available in the CENVAT Account during the relevant .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ment against debit notes issued by branches/divisions pertaining to capital goods and input service received by them, it is contended by Learned Counsel that the reversal, wherever carried out, and the eligibility of the appellant, as assessee, for all inflows and outflows of the corporate enterprise had been overlooked by the adjudicating authority. Reliance has been placed on the decision of the Tribunal in Vodafone Mobile Services Ltd v. Commissioner, Service Tax Commissionerate, Pune [2016-TIOL-3164-CESTAT-MUM] holding that 5…….Moreover when the mistake was pointed out by the audit party, appellant are promptly pay the entire service tax with interest. In a case was service tax along with interest is paid voluntarily without any contest, immunity is available under Section 73 (3).… In the order of the lower authorities it is not disputed that the double entry was made inadvertently.… Relying upon the decision of the Hon ble High Court of Bombay in Commissioner of Central Excise, Pune-III v. Ajinkya Enterprises [2013 (294) ELT 203 (Bom)] holding that 10…… In these circumstances, the CESTAT following its decision in the case of Ashok Ente .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... y in Commissioner of Central Excise, Pune-I v. GL & V India Pvt Ltd [2015 (321) ELT 611 (Bom)] have followed this decision while distinguished a contrary view adopted by the Hon ble High Court of Karnataka in Commissioner of Central Excise & Service Tax, LTU , Bangalore v. Bill Forge Pvt Ltd [2012 (279) ELT 209 (Kar)]. Learned Counsel drew our attention to the decision of the Tribunal in Commissioner of Central Excise, Pune-III v. Vodafone Essar Cellular Ltd [2016 (12) TMI 101-CESTAT MUMBAI] which, while taking note of the subsequent amendment in rule 14 of CENVAT Credit Rules, 2004, did go on to state that 12. In the matter of delayed payments, we take note of the submission that the credit was indeed available even on due date. This was also argued before the original authority who has not recorded a finding thereon or even considered the submission. This is a fact that needs verification….. 9. Before adverting to the implications of these decisions, it may be worthwhile to recall the provisions of Rule 14. Recovery of CENVAT credit wrongly taken or erroneously refunded.- Where the CENVAT credit has been taken or utilized wrongly or has been erroneously refunded, t .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... interest, that, by reason of application before the said Commission, could not be validated, or otherwise, in adjudication proceedings. 11. From the above circumstances, it would appear that the Hon ble Supreme Court was concerned, not with the outcome of such proposed recovery in adjudication but with the basis of pre-adjudicatory settlement that could not be interfered with, and, hence, the ruling therein may not be universally applicable in all disputes pertaining to recovery of CENVAT credit. The original legislative intent is also palpably apparent from the alacrity with which the Central Government chose to forgo the happy consequences of the decision of the Hon ble Supreme Court. 12. This is not to suggest that the subsequent decisions of the Hon ble High Court of Chhattisgarh and of the Hon ble High Court of Bombay as well as that of the Tribunal should not be followed by us; however, it may be worthwhile to peruse the circumstances in which that dispute was carried in appeal thereto. The issue in re Vandana Vidyut Ltd was the relegation of credit taken as mere paper entries which, according to the Tribunal, was not the same as utilization and the Hon ble High Court held th .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||