TMI Blog2023 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... (to which Rule 7 of the CCR applies) alleging that the distribution by the ISD was wrong. There is also nothing brought out on record if the appellant, being a recipient unit, had any role or influence in the manner of distribution so that a case of wilful suppression with an intention to evade payment of duty, etc., could be justified. When the appellant took consistent stand inter alia that its Head office-ISD unit was regularly filing its ER-1 return, that the service provider unit at Head Office had Service Tax liability every year, which was paid in cash and that the entire tax liability was paid in cash every year rather than paying through the CENVAT Credit, the lower authorities have not denied anywhere the facts - this is clearly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an, Learned Assistant Commissioner for the Respondent ORDER This appeal is filed by the assessee against the impugned Order-in-Appeal No. 03/2022-TRY (CX) dated 13.07.2022 passed by the Commissioner of Customs and Central Excise (Appeals), Tiruchirappalli whereby, inter alia, the disallowance of input credit and recovery of the same came to be upheld. 2. Heard Shri Vinay Kansara, Learned Advocate for the appellant and Shri R. Rajaraman, Learned Assistant Commissioner for the Revenue. After hearing both sides, I find that the only issue that has to be decided is: whether the disallowance of credit in the hands of the appellant was correct or not? 3. Facts are not in dispute; the appellant is engaged in the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qua a letter dated 14.07.2020, contending, inter alia, that the excess credit alleged to have been availed could not be recovered from the recipient unit; that it is the case of a revenue neutral situation; that the service provider unit at Head Office/ISD had Service Tax liability every year, which was paid by it in cash; that the distribution of credit was not done to Head Office since the entire tax was paid in cash every time rather than paying through CENVAT Credit and that, in any event, the Show Cause Notice was issued by invoking the extended period of limitation and therefore, the proposed recovery was not proper. The appellant also relied on the following decisions:- (i) M/s. Sanvijay Rolling Engineering Ltd. v. Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The lower authorities have pressed into service Rules 3 and 7 of the CCR, 2004 to disallow and recover the CENVAT Credit availed by the recipient-appellant unit, but however, when the audit took place at the Head Office unit, which is the ISD unit, nothing is placed on record as to whether any Show Cause Notice was issued to the said unit which chose to distribute (to which Rule 7 of the CCR applies) alleging that the distribution by the ISD was wrong. There is also nothing brought out on record if the appellant, being a recipient unit, had any role or influence in the manner of distribution so that a case of wilful suppression with an intention to evade payment of duty, etc., could be justified. When the appellant took consistent stand int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ischarging service tax liability in cash also. Therefore, the entire exercise would have been revenue neutral. Hence we hold that rejecting the claim of Cenvat credit of the appellant is unsustainable and liable to be set aside and we do so. The Hon ble Bombay High Court, thereafter, vide its judgement against the above order of CESTAT Mumbai [2019 (366) E.L.T. 624 (Bom.)], has upheld the above order of the Tribunal and the Hon ble Court has also looked into the amended Rule 7 of the CCR. 8. Further, I also find that in the following cases, it has been held that recovery / demand cannot be raised at the recipient s end:- (i) M/s. V.G. Steel Industry v. Commissioner of Central Excise [2011 (271) E.L.T. 508 (P H)]; ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
