TMI Blog2023 (5) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... IVASTAVA , MEMBER ( TECHNICAL ) Shri P. K. Shetty , Advocate, for the Appellant Shri P. K. Acharya , Superintendent , Authorised Representative for the Respondent ORDER This appeal is directed against Order-in-Appeal No. DL/26/APPEALS THANE/TR/2019-20 dated 15.07.2020 passed by the Commissioner of CGST Central Excise (Appeals), Mumbai. By the impugned order, Commissioner (Appeals) has upheld the Order-in-Original No. 12/SM/AC/DN.V/TH.R/2019-20/626 dated 21.11.2019 passed by the Assistant Commissioner of Central Taxes, Division V, Thane Rural. By this order, the adjudicating authority has held as follows:- ORDER i. I confirm the demand of service tax amounting totally to Rs. 5,78,214/- (Rupees Five Lakhs Seventy Eight Thousands Two Hundreds Fourteen only), under the provisions of section 73(2) of the Act. ii. I order to charge and recover interest at appropriate rate on the assessee under the provisions of section 75 of the Act. iii. I impose a penalty of Rs. 10,000/- on the assessee under the provisions of section 77 of the Act for the reasons discussed para 18. iv. I impose a penalty of Rs. 5,78,214/- on the assessee under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Unit at Plot No. B-84, MIDC, Anand Nagar, Additional Ambernath Industrial Area, Thane, Maharashtra - 421506 which has been utilized for the payment of service tax. A Total of Rs. 5,78,214/- Cenvat Credit has been incorrectly utilized for the payment of such above mentioned provision of Supply of Tangible Goods Services. The appellant was required to pay tax electronically, through internet banking, but failed to pay the tax electronically but instead had incorrectly utilized Rs. 5,78,214/- Cenvat credit availed which were directly related to the manufacturing activities for payment of service tax liability for service of Supply of Tangible Goods. 2.3 This has resulted into short payment of service tax on service provided by M/s. Vista Film Packaging (Div. of Positive Packaging Industries Ltd.), now known as M/s. Huhtamaki PPL Ltd., Plot No. B-84, MIDC, Anand Nagar, Additional Ambernath Industrial Ares, Thane, Maharashtra-421506. The details of the same have been given below: S. No. Period Assessable Value (Rs.) Service Tax paid through Cenvat (Rs.) 1 April- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teswara Coop. Indl. Estate, Naraspur, Dist. - Medak, Bolaram -502325, Telangana was not permissible in law. It has been so held, in the case of Dai Ichi Karkaria Ltd Vs CCE, by CESTAT Zonal Bench, Mumbai as reported in 2014- TIOL- 1799-CESTAT-MUM and in the case of M/s Avadh Enterprises Appellant Versus CCE (Adj.), New Delhi, by CESTAT, New Delhi in Service Tax Appeal No. 56375 of 2013 vide Final Order No. 51665/2018 Dated 02/05/2018. 2.6 Accordingly a show cause notice dated 27.03.2019 was issued to the appellant asking them to show cause as to why:- i. Service Tax amounting to Rs. 5,78,214/- (Rupees Five Lakhs Seventy Eight Thousands Two Hundreds Fourteen only)as detailed in Para 2 above, should not be demanded and recovered from them under proviso to Section 73(1) of the Finance Act, 1994. ii. Interest on the said amount of Service Tax as at (1) above, should not be demanded and recovered from them under Section 75 of the Finance Act, 1994. iii. Penalty under Section 77of the Finance Act, 1994 should not be imposed upon them, for failure to correctly discharge the Service Tax Liability electronically, through internet banking, on the Services provided at Huht ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices such as Supply of Tangible Goods and Business Auxiliary Services from the same premises. They are availing credit on inputs, Capital goods and input services under the Cenvat Credit Rules, 2004 and same has been utilized for payment of Central Excise and Service Tax on output services. This has also been reported regularly every month in the ER-1 returns and also in Half yearly ST-3 Returns. They further submit that under subrule (4) of Rule 3, Cenvat Credit in respect of specified duties and taxes is permitted to be utilised for the following: i) any duty of excise on any final products, including waste scrap. ii) duty on inputs or capital gods themselves when they are removed from the factory as such. iii) an amount under sub-rule (2) of Rule 16 of CER,2002. iv) service tax on any output services. In view of expressed provision under Rule 3(4)(a) (e) which states that Cenvat credit may be utilised for payment of any duty of excise on any final product or Service Tax on any output service, it is settled law that Credit by assessee who is manufacturer as well as service provider, Cenvat credit can be used for payment of excise duty or serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input service for the assessee and the duty/tax paid on such services can be utilised for payment of service tax on the Supply of Tangible Goods service. But I find that in the case in hand the appellant has used the credit availed on inputs and services used in the case of their manufacturing activity for payment of service tax on the Supply of Tangible Goods service. The said services are having no nexus to the activity of manufacturer and therefore Credit taken on such services, cannot be utilised for the payment of service tax on the output service of Supply of Tangible Goods provided by them since those services are not used for provision of the output service. As regards catena of judgments' relied upon by the assessee, I find all of them are distinguishable from the case in hand. For example I find that the case of Commissioner of CGST, Belapur V/s. GTL Infrastructure Ltd 2019(TIOL)-1370-HC-MUM-ST and other High Court cases were dealing with the question of payment of service tax on reverse charge basis on GTA using Cenvat instead of cash. Similarly in the case of Panchmahal Steel Ltd V/s. CCE ST 2015 (TIOL)-25-HC-AHM-ST the issue was about payment of Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Management Co. Ltd. [2020 (43) GSTL 209 (Tri.-Mumbai)] was also not in respect of such cross utilization. In para 8 of the said order, the issue is in respect of denial of Cenvat credit and not of the utilization of the said credit. 4.7 In the case of Sree Rayalaseema Hi-Strength Hypo Ltd. [2011-TIOL-1048-HC-AP-CX], the issue was also in respect of taking Cenvat credit and not of utilization of the said credit. 4.8 In the case of Toyota Kirloskar Motor Pvt. Ltd. [2011 (24) STR (Kar.), the issue was with regard to the definition of input services and not utilization of the credit. 4.9 Learned AR has placed reliance on the decision of Hon ble Karnataka High Court in the case of Shell Technology India Pvt. Ltd. [2016 (44) STR 244 (Kar.)]. I do not find any merits in the submissions, in view of para 5 of the decision which records the facts in following manner:- 5. The brief facts of the case appears to be that as per the respondent, it is a registered unit rendering services of consulting engineer. As per the respondent, it is 100% export oriented unit engaged in providing services. The respondent filed an application for refund of unutilized Cenvat credit. On 10-9- 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of final products or provider of output service to take credit of Cenvat of various duties specified therein. Sub-rule (4) of Rule 3 of the said Rules provides that the Cenvat credit may be utilized for payment of various duties specified in clauses (a) to (e) thereof; clause (e) pertains to Service Tax on any output service . A combined reading of these statutory provisions would, therefore, establish that though the assessee was liable to pay Service Tax on G.T.A. Service, it could have utilized Cenvat credit for the purpose of paying such duty. In view of the decisions of Punjab and Haryana High Court and Delhi High Court noted above, we do not find any error in the view of the Tribunal. Tax Appeal is, therefore, dismissed. 4.12 In the case of Godrej Boyce Manufacturing Co. Ltd. [2019-TIOL-1367-HC-MUM-CX], Hon ble Bombay High Court has held as follows:- 3. Regarding question (i) :- (a) It is an admitted position before us that the period involved in this appeal is in respect of utilisation of CENVAT credit for payment of service tax on reverse charge basis GTA (Goods Transport Agency) after the introduction of Cenvat Credit Rules, 2004. (b) In terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by its letter dtd.19/01/2005 brought to the notice of the authorities that in view of the new Rules, it is permitted to utilise the service tax credit for payment of excise duty on manufactured goods and viceversa. This, as credits in both the accounts, i.e. service tax and Cenvat credit stood merged as on 30/12/2004. The aforesaid letter dtd.19/01/2005 brought to the notice of the Revenue that they would be transferring the credit from Service Tax Credit Register to the Cenvat Credit Register and are utilising the same for payment of excise duty and service tax. The Revenue had issued a Showcause notice on 21/07/2008 seeking to disallow the transfer of credit which took place in 2004. (b) The Commissioner of Central Excise by adjudicating the order dtd.20/02/2009 confirmed the notice. Being aggrieved, the respondent filed an appeal to the Tribunal. (c) By the impugned order, the Tribunal found that the Revenue was aware that the respondent was taking the merged credit in 2004, in view of intimation dtd.19/01/2005. Thus, the Tribunal held that the showcause notice is time barred and allowed the respondent's appeal before it. (d) We note the findings of the Tr ..... 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