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=763255 https://www.taxtmi.com/caselaws?id=763255 CENVAT Credit - reversal of input service credit on account of availment of input service credit attributable to trading activity - Invocation of Extended period fo limitation - denial of credit on procedural grounds such as the head office has not taken the ISD registration and the invoices pertaining to the input services were not in the name of the appellant-company - Enhancement of penalty. Reversal of input service credit amounting to Rs. 1,17,41,737/-on account of availment of input service credit attributable to trading activity - HELD THAT:- It is observed that trading has been brought under the category of exempted service only with effect from 01.04.2011. Thus, prior to this period there is no need to reverse proportional credit attributed to the exempted service, trading . The demand in this case has been raised for the period 2007-08 to 2010-11. As trading was not an exempted service during the period under dispute, the reversal of input service credit proportional the value of exempted service is not warranted. Thus, the demand confirmed in the impugned order, along with interest and penalty imposed, set aside. Invocation of Extended period of limitation - HELD THAT:- It is observed that all the notices were issued by invoking extended period of limitation. These notices were issued in piecemeal based on various audit objections. Once a Show Cause Notice is issued proposing denial of CENVAT Credit by invoking extended period of limitation, then another notice cannot be issued on the same issue by invoking extended period again, as held by the Hon ble Apex court in the case of NIZAM SUGAR FACTORY VERSUS COLLECTOR OF CENTRAL EXCISE, AP [ 2006 (4) TMI 127 - SUPREME COURT ] wherein it has been categorically held that once a demand has been raised for any issue by invoking the extended period of limitation, then another demand cannot be raised again by invoking the extended period on the same issue for a subsequent period - the demands confirmed in the subsequent notices, invoking extended period of limitation is not sustainable. Denial of CENVAT credit on procedural grounds such as the head office has not taken the ISD registration and the invoices pertaining to the input services were not in the name of the appellant-company - HELD THAT:- It is observed that when the receipt and utilization of the service are not in dispute, the credit available to the appellant cannot be denied on mere procedural infirmities. Accordingly, the above credit availed by the appellant cannot be denied. Thus, the appellant is eligible for the credit of input services availed them in the impugned orders. Since the credit is held to be eligible, the question of demanding interest and imposing penalties does not arise. Enhancement of penalty - HELD THAT:- Since, it has been already been held by us that the credit availed by the appellant is in order, there is no need to impose penalty for the alleged irregular credit availed. Accordingly, the penalty enhanced by the Ld. Commissioner (Appeals) in the impugned order set aside - it is observed that a penalty of Rs.2000/- was originally imposed by the adjudicating authority on the ground of irregular availment of credit. Since, the credit availed is held to be eligible to the appellant, the penalty of Rs.2000/- imposed by the original adjudication authority is not sustainable. The impugned order set aside - appeal allowed. Case-Laws Central Excise Fri, 13 Dec 2024 00:00:00 +0530