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Appeal allowed for denial of Cenvat credit on Wind Mill Turbine services due to limitation issue The appeal was allowed as the denial of Cenvat credit for services related to Wind Mill Turbine installation was upheld due to lack of nexus with goods ...
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Appeal allowed for denial of Cenvat credit on Wind Mill Turbine services due to limitation issue
The appeal was allowed as the denial of Cenvat credit for services related to Wind Mill Turbine installation was upheld due to lack of nexus with goods manufactured in the factory. The invocation of a longer period of limitation for demand was deemed unjustified as no suppression or misstatement was found. Consequently, the demand was held to be barred by limitation, leading to the setting aside of the penalty imposed on the parties involved.
Issues involved: Denial of Cenvat credit for services related to Wind Mill Turbine installation, invocation of longer period of limitation for demand, imposition of penalty.
Denial of Cenvat credit: The appellant's demand of &8377; 4,17,342/- was confirmed by denying them the benefit of Cenvat credit for services of erection, commissioning, and installation of Wind Mill Turbine away from the factory premises. The Commissioner (Appeals) found no nexus between the services received at the wind mill and the goods manufactured in the factory, leading to the denial of input services. The Tribunal cited previous cases to support this decision, stating that the issue on merit had been settled and no infirmity was found in the authorities' views.
Invocation of longer period of limitation: The demand related to March 2006, but the show cause notice was issued in December 2007 by invoking the longer period of limitation. The Tribunal observed that the issue was of legal interpretation and did not call for any penalty. Referring to previous cases, it was noted that longer limitation could only be invoked in cases of suppression or misstatement, which was not evident in this situation. The Tribunal held that the demand was hit by limitation, and penalty could not be imposed based on the decision in similar cases.
Imposition of penalty: Following the decision that the demand was barred by limitation, no penalty was imposed on M/s. Leamak Healthcare Pvt. Ltd. and on B.R. Patel. The imposition of penalty was set aside, and both appeals were allowed on the point of limitation.
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