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of <h1>Court grants appeal, allows cenvat credit post cash payment in PLA</h1> <h3>M/s Ratnamani Metals and Tubes Ltd. Versus CCE&ST., Ahmedabad III</h3> M/s Ratnamani Metals and Tubes Ltd. Versus CCE&ST., Ahmedabad III - 2014 (35) S.T.R. 111 (Tri. - Ahmd.) Issues:1. Availment of sumoto credit by the appellant after making cash payment in PLA.2. Disallowance of credit by lower authority based on the need to apply for refund under Section 11B of the Central Excise Act.3. Interpretation of relevant case law, including M/s BDH Industries Ltd and M/s Automotive Metal Stampings Pvt Ltd.4. Applicability of reverse charge mechanism for discharging Service Tax liability.5. Eligibility of credit balance in Cenvat account during the material period.6. Comparison with relevant judicial pronouncements like Sopariwala Exports Pvt Ltd and Subramaniyan & Co.Analysis:1. The appellant, engaged in manufacturing excisable goods and providing Goods Transport Agency services, availed cenvat credit under Cenvat Credit Rules, 2004. The audit revealed payment of inward freight and sales commissions, with subsequent service tax payments debited to the Cenvat account, which was deemed inadmissible under Rule 3(4) of the Cenvat Rules, 2004.2. A show cause notice was issued for recovery of Cenvat credit, interest under Section 11AB of the Act, and penalty under Rule 15(10) of the Cenvat Credit Rules, 2004. The adjudicating authority confirmed the recovery, interest, and penalty, which was upheld by the first appellate authority citing the judgment in the case of M/s BDH Industries Ltd.3. The appellant argued eligibility for cenvat credit, referencing a favorable decision in M/s Automotive Metal Stampings Pvt Ltd case. The appellant contended that the facts of the BDH Industries Ltd case did not apply to their situation.4. The issue revolved around the appellant's availment of suo moto credit after cash payment in PLA, which was disallowed by the lower authority, emphasizing the need to follow the refund provisions of Section 11B of the Central Excise Act. However, the appellant had discharged the duty in cash and subsequently taken cenvat credit, which was found eligible based on judicial precedents like Sopariwala Exports Pvt Ltd and the decision of the Honorable High Court of Gujarat in Subramaniyan & Co.5. The judgment highlighted that the appellant had indeed discharged the Service Tax liability through the Cenvat account under the reverse charge mechanism, and the credit balance in the Cenvat account was deemed eligible during the relevant period.6. Ultimately, the court set aside the impugned order and allowed the appeal, providing consequential relief to the appellant based on the judicial pronouncements and the specific circumstances of the case, as pronounced on 07.03.2014.
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