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TMI Blog2025 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... , the present appeal relates only to the disallowance of credit towards transportation and difference in the amount received from the insurance company. 2. Facts of the case are that the appellant is engaged in the manufacture of motor vehicles and motor vehicle parts and had been availing the facility of Cenvat Credit under the Cenvat Credit Rules, 2004 CCR, 2004. During the audit of the records /document submitted by the appellant, it was observed that they had wrongly availed the credit on the amount of free service coupon provided by their dealers after sale of the goods, (vehicles). It was also observed that the appellant had reported loss due to damaged goods valued at Rs. 4,83,825/- against which they had received insurance claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of Cenvat credit in respect of service tax charged by the transporting agency. Reversal of credit on labour charges was challenged on the ground that the employees who were engaged were directly employees of the appellant and hence there is no question of availing of any credit which requires reversal. Challenge is also being made to the invocation of the extended period and imposition of interest and penalty. 5. The learned Authorized Representative reiterated the findings of the authorities below. He submitted that the ingredients to avail the credit of duty in respect of goods brought back to the factory in terms of Rule 16(1) of the Rules was not satisfied. The appellant was not entitled to avail the benefit of Cenvat Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub-rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be. [Explanation. - The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.] (3) If there is any difficulty in following the provisions of sub- rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service is used by a manufacturer in relation to manufacture of final products and clearance of final products up to the place of removal. Such is not the case here as the activity carried out by the appellant does not amount to manufacture and, therefore, the said provisions are inapplicable. Consequently, the ingredients to avail credit of duty of goods brought back to the factory in terms of Rule 16 read with Rule 2 (l) are not satisfied and, therefore, the appellant is not entitled to avail the benefit of Cenvat credit of the GTA paid on the aforesaid goods. 9. The decision of the Principal Bench in National Engineering industries Ltd Vs. Commissioner of C.EX., Jaipur -I 2018 (363) ELT 1136 (Tri. Del.) supports the view that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seems to be no error in the demand raised and confirmed in this regard. 13. The appellant has also challenged the reversal of the Cenvat credit in respect of labour cost on the ground that they were the employees of the appellant. The appellant in their synopsis had submitted that they received a sum of Rs. 5,60,555/- towards the insurance claim which consisted cost of material of Rs. 4,83,825/- and the cost of labour of Rs. 1,56,717/-. From their own submissions, it is apparent that the amount received from the insurance company included the cost of labour and consequently, they were required to reverse the same. 14. On the issue of limitation, the learned counsel for the appellant submitted that the period from June 2016 to July 2016, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary constituent for imposition of penalty under Section 11AC. There cannot be any quarrel with the principle enunciated by the Apex Court in the said decisions and other line of decisions in this regard, however the intent has to be gathered from the facts of the case. The action/inaction on the part of the assessee points to the intent to evade duty and the same is writ large in the present case as though ER-1 Returns were filed by the appellant, however, the fact of availing the Cenvat credit on transportation charges was missing deliberately as the appellant knew that the activity carried out by them and did not amount to manufacture which is further evident by not availing the Cenvat credit in terms of Rule 16(1). 16. On merits th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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