2022 (9) TMI 1002 - AT - Central Excise

Appellant granted cenvat credit on 'Outdoor Catering Services' pre-2011 but not post-2011. Interpretational issue considered.

M/s. Roca Bathroom Products (P) Ltd. Versus Commissioner of GST & Central Excise, Chennai

M/s. Roca Bathroom Products (P) Ltd. Versus Commissioner of GST & Central Excise, Chennai - 2023 (69) G.S.T.L. 187 (Tri. - Chennai) Issues:1. Eligibility of cenvat credit on 'Outdoor Catering Services' for the period January 2010 to April 2015.2. Interpretation of law regarding credit eligibility based on the timing of the amendment.3. Consideration of penalty imposition due to interpretational nature of the issue and lack of evidence of intentional suppression of facts.Analysis:1. The case involved the appellant, engaged in the manufacture of Sanitary Wares, availing cenvat credit on 'Outdoor Catering Services' for the period from January 2010 to April 2015. The Department contended that the credit availed on such services was not eligible. Show cause notice was issued, leading to the original authority confirming the demand along with interest and penalty. The appellant appealed against this decision.2. The appellant's counsel argued that eligibility for credit should be determined based on the timing of the amendment excluding 'Outdoor Catering Services.' It was highlighted that for the period before 01.04.2011, the appellant should be eligible for credit as the exclusion came into effect post that date. Legal precedents, including decisions in other cases, were cited to support this argument.3. The counsel acknowledged that post 01.04.2011, the appellant would not be eligible for credit, citing a recent decision by the Hon'ble Supreme Court. It was emphasized that the appellant had already paid the entire amount along with interest for the services in question, which should be considered for adjusting the demand. The appellant's argument centered on the interpretational nature of the issue and their bona fide belief in availing the credit.4. After hearing both sides, the Member (Judicial) analyzed the issue and held that the appellant was not eligible for credit on 'Outdoor Catering Services' after 01.04.2011. However, for the period preceding this date, the appellant was deemed eligible for credit. The Member also considered the interpretational nature of the issue and the lack of evidence of intentional suppression of facts by the appellant.5. Consequently, the impugned order was modified to allow credit for the period before 01.04.2011, while upholding the demand for the subsequent period. The appellant was granted the right to adjust the amount already paid, and the penalty imposed was set aside based on the interpretational aspect of the issue and the absence of evidence supporting intentional evasion of duty. The appeal was partly allowed with consequential relief as per the law.