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TMI Blog2023 (6) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit Rules, 2004 read with Section 11AA of the Central Excise Act, 1994; and section 174 of the CGST Act, 2017. (ii) A penalty of Rs. 18,55,671/- (Rupees Eighteen lakh Fifty Five Thousand Six Hundred Seventy One only) is hereby imposed on M/s. K. K. Associates Builders & Developers, Plot No. 5 & of the finance Act 6, 6 Floor, Landmark, Wardha Road, Ramdaspeth, Nagpur, under Rule 15(2) of Cenvat Credit Rules, 2004 read with section 78 of the Finance Act, 1994 & section 174 of the CGST Act, 2017. However, the said penalty is liable to be reduced to Rs. 4,63,918/- (25% of the amount payable) in case the amount of demand as determined in (1) above is paid along with interest and reduced penalty amount within 30 days from the date of communication of this order. The Show Cause Notice C.No. III(20)A-37/SCN/NGP-1/Cir- 11/09/2017/1876 dated 11.03.2019 is accordingly disposed off." 2.1 Appellant is engaged in providing services of construction of residential complex and construction service other than residential complex including commercial/industrial buildings or civil structures and paying service tax under Section 68(1) of the Finance Act, 1994. 2.2 During the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 25,00,000 2,00,00,000 14,00,000 TOTAL 48 60,00,000 16,00,00,000 1,12,00,000 2.6 Accordingly Revenue was of the view that as per 6(3)(i) of Cenvat Credit Rules, appellant was required to reverse the amount of Rs.3,72,40,646/- towards the Cenvat credit availed in respect of common input services for providing both taxable and non-taxable service. 2.7 A show cause notice 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomobiles Pvt. Ltd. (supra)." 4.3 Rule 6(3A) of the Cenvat Credit Rules, as amended by Notification No. 13/2016-CE (NT) dated 01.03.2016 reads 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e called eligible common credit and denoted as G, where,- G = C - 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qual 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), if any, wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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. Appellant has challenged imposition of such penalty relying on the following decisions:- o Prajapati Developers [Appeal No. E/30719/18 (CESTAT Hyderabad)] o TPL Developers [Appeal No. ST/20074/19 (CESTAT Bangalore)] o HMT Ltd. [2008 (232) ELT 217 (Tri.-LB)] o HMT (TD) Ltd. [2015 (322) ELT 342 (P&H)] o TAFE Ltd. [2011 (268) ELT 49 (Kar)] o TAFE Ltd. [2015 (322) ELT A185 (SC)] o TAFE Ltd. 2015 (322) ELT 864 (Kar)] o PSL Corrosion Control Services Ltd. 2016 (339) ELT 406 (Guj.)] o PSL Corrosion Control Services Ltd. 2016 (339) ELT A208 (SC)] o Ashok Iron & Steel Fabricators [2022 (140) ELT 277 (Tri.- LB)] o Ashok Iron & Steel Fabricators [2003 (156) ELT A212 (SC)]. 4.6 I do not find merit in the above submission. Hon'ble Karnataka High Court has in case of Lalit Ashok {2022 (66) G.S.T.L. 314 (Kar.)] relied upon Hon'ble Supreme Court in the case of Rajasthan Spinning and Weaving Mills [2009 (238) ELT 3 (SC)], to hold as follows:- "16. In Rajasthan Spinning and Weavin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise Act is, commission of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of the Act. 20. Under Section 78(1) of Finance Act, 1994, penalty may be imposed if the service tax is not paid due to any reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act and the Rules made thereunder with the intent to evade payment of service tax. 21. Therefore, the question that falls for consideration is, whether payment of service tax, which was not made by the assessee falls within the conditions prescribed in the Act." 4.7 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/-, I reduce the penalty im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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