https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=757501 https://www.taxtmi.com/caselaws?id=757501 Denial of CENVAT credit - Input services - allegation that certain input services do not qualify to be input services under Rule 2 (l) of Cenvat Credit Rules 2004 - Rental charges for EOU - Confirmation of demand Rs.1,50,278/- alleging that certain input services which have been used commonly for DTA unit and EOU - Credit taken without documents - Time Limitation - penalties. Input services - Period prior to 01.04.2011 - HELD THAT:- The period of dispute is prior to 01.04.2011 as well as after. The definition of input services prior to 01.04.2011 has already been reproduced above. The said definition uses the words activities relating to business . The definition was wide enough to include almost all services. The appellant is eligible for the credit availed on services like outdoor catering services, courier service, civil construction services, logistic services, custom house agent services, insurance services availed for the period prior to 01.04.2011. All these services fall in the inclusive part of the definition of input services. It is therefore found that the appellant is eligible for credit for all these services prior to 01.04.2011. Input services - Period after 01.04.2011 - HELD THAT:- After 01.04.2011 the definition excludes services in the nature of outdoor catering services, insurance and civil construction services. The Ld. Counsel for appellant has submitted that they have reversed the credit for the period after 01.04.2011 with regard to these services. It is also submitted that the appellant is not contesting the issue on eligibility of credit on services like outdoor catering, civil construction, insurance (hospital) for the period after 01.04.2011. The demand confirmed for the period after 01.04.2011 on this issue is upheld. Write off of obsolete items is set aside for the period prior to 01.03.2011 as well as for period after 01.03.2011 - HELD THAT:- The demand in respect of the issue on write off of obsolete items is set aside for the period prior to 01.03.2011. However, the demand for the period after 01.03.2011 is sustained. The appellant has reversed the credit of Rs.27,36,474/- being after 01.03.2011. They are liable to pay duty after 01.03.2011 only. The demand confirmed on this issue is Rs.72,36,340/-. The amount confirmed in excess of Rs.27,36,474/- along with interest is set aside. The penalty on this issue is set aside. Rental charges for EOU - HELD THAT:- The amount has been reversed by the DTA unit and has been re-availed by the EOU. The appellant has submitted that they are not contesting this issue. For this reason, the demand in respect of rental charges is upheld. Confirmation of demand Rs.1,50,278/- alleging that certain input services which have been used commonly for DTA unit and EOU - HELD THAT:- Applying the ratio laid in the decision in the case of Dashion Ltd., (supra) the demand cannot sustain - the demand cannot sustain and requires to be set aside. Credit taken without documents - HELD THAT:- From the facts, it is seen that this allegation has been raised when the credit lying with debonded EOU was transferred to DTA unit - The department is of the view that since the unit had availed the credit as EOU unit, even though it has been debonded and become a DTA unit, the credit cannot be transferred. The same issue has been analyzed and decided by the Tribunal in the case of M/S. WIPRO LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2023 (6) TMI 237 - CESTAT CHENNAI ], wherein it was held that the credit carried forward to the DTA unit after de-bonding cannot be denied - the denial of credit alleging that the transferred credit has been availed without documents cannot sustain and require to be set aside. It also needs to be noted that part of this demand relates to credit availed in respect of inputs at the time of de-bonding. The adjudicating authority as well as the Tribunal denied the eligibility of credit on inputs availed by EOU consequent to de-bonding. The appellant preferred an appeal before the Hon ble Jurisdictional High Court and the issue was held in favour of the appellant. Thus, the issue as to whether credit can be availed on inputs at the time of de-bonding stands settled in favor of appellant. The Hon ble High Court in the appellant s own case M/S. AVO CARBON (INDIA) PVT. LTD. M/S. STANADYNE AMALGAMATIONS (P) LTD VERSUS CCE, CHENNAI-II [ 2017 (4) TMI 428 - CESTAT CHENNAI ], Chennai considered the issue and held as under to conclude that the credit on inputs is eligible at the time of debonding. Time Limitation - penalties - HELD THAT:- Show Cause Notice and Statement of demand are issued for the period 2009-10 to 2012-13. Part of the demand falls within the extended period. In the present case, the issues are mostly interpretational in nature - The issue with respect to credit on various input services is also interpretational in nature, as an amendment was introduced in the definition on inputs services w.e.f. 01.04.2011. Further, there is no positive act of suppression established against the appellant. Show cause notice has been issued based on the objections raised by the audit. As and when pointed out, the appellant has reversed the credit in respect of the issue of write off as well as ineligible input services post 01.04.2011 - there are no grounds for invoking the extended period. The issue of limitation is answered in favour of the assessee and against the Revenue. For the same reasons, the penalties imposed are also set aside. Appeal allowed in part. Case-Laws Central Excise Mon, 26 Aug 2024 00:00:00 +0530