TMI Blog2023 (6) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... e in way allowing the benefit under Rule 6(3A). Commissioner also does not do so. Commissioner has imposed penalty in terms of Rule 15(2) of the Cenvat Credit Rules, 2004 read with the provisions of Section 11AC of the Central Excise Act, 1944. Commissioner has in the impugned order concluded that appellant has willfully suppressed the facts from the revenue to avoid the reversal of the common credit taken by them for providing the taxable and exempted services, as required in terms of Rule 6 of the CENVAT Credit Rules, 2004. This finding of fact has not been seriously challenged/ disputed by the appellant. However, taking note of the fact that actual amount of credit that was required to be reversed and not reversed is only Rs.1,96,730/-, the penalty imposed upon the appellant under Section 78 of the Finance Act reduced to Rs.1,96,730/-. The option given by the Commissioner for payment of 25% of the penalty in case the amount determined is paid along with interest and reduced penalty within 30 days of communication of this order will be available to the appellant. Appeal allowed in part. - Service Tax Appeal No. 85553 of 2020 - FINAL ORDER NO. 85394/2023 - Dated:- 2-2-202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpletion certificate by the competent authority and the unsold units for which completion certificate is issued by the competent authority. Appellant had constructed 224 units of residential flats/buildings/row houses and 10 shops on 5 blocks of Lifestyle Township. 91 residential flats/buildings/row houses along with 2 shops were sold before obtaining completion certificate and the appellant had paid service tax on the same. Completion certificate was issued to the appellant on 15.01.2016. 2.3 Section 66E(b) of the Finance Act, 1994 prescribes the following as declared services:- (b) Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion certificate by the competent authority. 2.4 Accordingly the activity of construction of residential building or civil structure where entire consideration is received after issuance of completion certificate does not amount to a service and no service tax is leviable on such units. 2.5 After issuance of completion certificate on 15.01.2016 appellant had sold 93 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 11.03.2019 was issued to the appellant asking them to show cause as to why:- (i) The amount of Rs. 3,72,40,646/- (including SBC and KKC) should not be demanded and recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Sub- Section (1) of Section 73 of the Finance Act, 1994 and Section 174 of the CGST Act, 2017. (ii) Interest at appropriate rate should not be levied and recovered from them under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 75 of the Finance Act, 1994 and Section 174 of the CGST Act, 2017. (iii) Penalty should not be imposed upon them under the provisions of Rule 15 of the Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 and Section 174 of the CGST Act, 2017. 2.8 The show cause notice has been adjudicated by the Commissioner as per the impugned order. 2.9 Aggrieved appellant is in appeal. 3.1 I have heard Shri R.R. Mehta, Chartered Accountant for the appellant and Shri Vinod Kumar, Assistant Commissioner, Authorised Representative for the Revenue. 3.2 Arguing for the appellant, learned counsel submits that the facts are not in dispute. However, while computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as follows:- (3A) For determination of amount required to be paid under clause (ii) of sub-rule (3), the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely :- (a) the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely :- (i) name, address and registration number of the manufacturer of goods or provider of output service; (ii) date from which the option under this clause is exercised or proposed to be exercised; (iii) description of inputs and input services used exclusively in or in relation to the manufacture of exempted goods removed or for provision of exempted services and description of such exempted goods removed and such exempted services provided; (iv) description of inputs and input services used exclusively in or in relation to the manufacture of non-exempted goods removed or for the provision of non-exempted services and description of such non-exempted goods removed and non-exempted services provided ; (v) CENVAT credit of inputs and input services lying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D; Explanation.- For the removal of doubts, it is hereby declared that out of the total credit T, which is sum total of A, B, D, and G, the manufacturer or the provider of the output service shall be able to attribute provisionally and retain credit of B and G, namely, eligible credit and eligible common credit and shall provisionally pay the amount of credit of A and D, namely, ineligible credit and ineligible common credit. (vi) where manufacturer or the provider of the output service fails to pay the amount determined under sub-clause (i) or sub-clause (iv), he shall be liable to pay the interest from the due date of payment till the date of payment of such amount, at the rate of fifteen per cent. per annum; (c) the manufacturer or the provider of output service shall determine the amount of CENVAT credit attributable to exempted goods removed and provision of exempted services for the whole of financial year, out of the total credit denoted as T (Annual) taken during the whole of financial year in the following manner, namely :- (i) the CENVAT credit attributable to inputs and input services used exclusively in or in relation to the manufacture of exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to difference between the total of the amount of the aggregate of ineligible credit and ineligible common credit paid during the whole year and the total of the amount of annual ineligible credit and annual ineligible common credit, namely, [{(A+D) aggregated for the whole year)} {A(Annual) + D(Annual)}], where the former of the two amounts is greater than the later; (g) the manufacturer of the goods or the provider of output service shall intimate to the jurisdictional Superintendent of Central Excise, within a period of fifteen days from the date of payment or adjustment, as per the provisions of clauses (d), (e) and (f) , the following particulars, namely :- (i) details of credit attributed towards eligible credit, ineligible credit, eligible common credit and ineligible common credit, month-wise, for the whole financial year, determined as per the provisions of clause (b); (ii) CENVAT credit annually attributed to eligible credit, ineligible credit, eligible common credit and ineligible common credit for the whole of financial year, determined as per the provisions of clause (c); (iii) amount determined and paid as per the provisions of clause (d), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds) Rs. 217,035/- Rs. 13,022/- Rs. 7,813/- Rs. 20,835/- 4/1/20 2016-17 Rs. 58,931/- Rs. 58,260/- Rs. 26,217/- Rs. 84,477/- 4/1/20 2017-18 (Till 30/6/17) Rs. 140,818/- Rs. 125,448/- Rs. 37,634/- Rs. 163,082/- 4/1/20 Total Rs. 25,63,092/- Rs. 196,730/- Rs. 71,664/- Rs. 268,394/- 4.5 As seen from the above, the appellant was required to reverse under Rule 6(3A) credit of Rs.1,96,730/- which they paid along with interest on 04.01.2020. It is now settled law that procedural violation while making the above reversal should not come in way allowing the benefit under Rule 6(3A). Commissioner also does not do so. Commissioner has imposed penalty in terms of Rule 15(2) of the Cenvat Credit Rules, 2004 read with the provisions of Section 11AC of the Central Excise Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AC would apply to every case of non-payment or short payment of duty regardless of conditions expressly mentioned in the Section for its application. 17. A careful reading of the above shows that, as per UOI v. Dharamendra Textile Processors [2008 (231) E.L.T. 3 (S.C.)], once the Section is applicable, the concerned authority would have no discretion in quantifying the amount and penalty equivalent to the duty determined must be imposed. In Para 24 it is clarified by the Apex Court that what is stated in regard to the decision in Dharmendra Textile is applicable in respect of Section 11AC. 18. Under 11AC of Central Excise Act, 1944, penalty is payable where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, 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. 19. Thus the sine qua non to impose penalty under Section 11AC of Central Excise Act is, commission of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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