TaxTMI 
TaxTMI 
2017 (8) TMI 592
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....e following questions of law were framed for consideration by this Court: "i) Whether the Tribunal was right in holding that the service tax credit taken by M/s.JSW Steel Ltd., Salem on the basis of supplementary invoices/bills/challans issued by the service provider ? ii) Whether in view of the suppression, detection of evasion of service tax and registration of offence case against the respondent, the Tribunal was right in law to allow the availment of credit under CENVAT Credit Rules 2004 ? iii) Whether the violation of Rule 4A of Service Tax Rules, 1994 entitles the respondent to avail credit under CENVAT Credit Rules, 2004 ?" 4. In order to adjudicate upon the appeals, the following broad facts are required to be noticed. Facts pertaining to the first appeal preferred by the assessee before the Tribunal: 4.1. The Assessee [formerly known as 'M/s.Southern Iron and Steel Company Ltd., (SISCOL)] was, at the relevant point of time, engaged in the manufacture of pig iron, steel bars and rods, flats etc. 4.2. The Assessee was providing manpower recruitment & supply services (input services) to an entity, known as M/s.Multicolour Projects (India) Ltd. 4.3. The services we....
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.... requisite service tax. 7.1. The Assessee had availed of CENVAT credit based on TR-6 Challan, which, according to the Revenue, was not an eligible document under Rule 9(1)(b) of the 2004 CC Rules. 7.2. The CENVAT credit taken by the Assessee amounted to Rs. 67,62,355/- (inclusive of Educational Cess equivalent to Rs. 1,32,595/-). 7.3. Like in the other case, the Assessee was issued a Show Cause Notice, which incidentally is also dated 24.03.2008. The Assessee filed a reply dated 22.05.2008, qua the same. 7.4. The Revenue, after granting personal hearing, passed an Order-in-Original dated 28.05.2008, whereby, demand in the sum of Rs. 67,62,355/- vis-a-vis wrong availment of CENVAT credit, was confirmed and also demand for interest was raised. 7.5. Furthermore, equivalent amount, in a sum of Rs. 67,62,355/-, was demanded for having wrongly utilised the CENVAT credit towards payment of duty upon clearance of final products. 7.6. In addition, penalty of Rs. 67,62,355/- was imposed on the Assessee under Rule 15 of the 2004 CC Rules. 7.7. This apart, penalty was also imposed, once again, amounting to Rs. 67,62,355/- under Rule 25 of the Central Excise Rules, 2002 read with Section....
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....to additional duty, which become recoverable from a manufacturer or importer of inputs or capital goods, on account of non-levy or short-levy by reason of fraud, collusion or any wilful misstatement or suppression of facts or contravention of any provisions of the 1994 Act or the Customs Act, 1962 or the Rules made thereunder with an intent to evade payment of duty. 12.2. In other words, the argument was, that Rule 9(1)(b) would not apply to a provider of input services and, furthermore, the denial of credit pertained to additional duty, which becomes recoverable on account of fraud, collusion or any wilful misstatement, etc., 12.3. Learned counsel also submitted that the explanation which was appended to Rule 9(1)(b) of the 2004 CC Rules did not apply to the remaining Clauses of Rule 9(1), which included Clauses (e), (f) and (g). 13. As alluded to above, the main issue centres around the interpretation which is to be accorded to Rule 9(1)(b) of 2004 CC Rules and the Explanation appended thereto. 13.1. Therefore, for the sake of convenience, the said Rule is extracted hereafter: "Rule 9. Documents and accounts.- (1) The CENVAT credit shall be taken by the manufacturer or the ....
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....der of input service on or after the 10th day of, September, 2004; or (g) an invoice, bill or challan issued by an input service distributor under rule 4A of the Service Tax Rules, 1994. Provided that the credit of additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) shall not be allowed if the invoice or the supplementary invoice, as the case may be, bears an indication to the effect that no credit of the said additional duty shall be admissible; " 13.2. A careful perusal of Sub-Rule (1) of Rule 9 would show that CENVAT credit can be taken by the manufacturer or provider of output service or input service distributor based on the documents referred to in Clauses (a) to (g). Clause (a) of Sub-Rule (1) of Rule 9, inter alia, allows a manufacturer, (which is, what the Assessee is) to claim CENVAT credit based on an invoice, which could be issued by a manufacturer or an importer or even a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of the Central Excise Rules, 2002 (In short 'the 2002 Rules'). 13.3. The invoices issued by a manufacturer for clearance of inputs or ca....
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....ed the CENVAT credit, based on the invoice / TR 6 challan. 15. Furthermore, since, we have come to the conclusion that Rule 9(1)(b) of 2004 CC Rules would have no application to the facts obtaining in the instant case, the exception carved out in Clause (b) of Sub-Rule (1) to Rule 9 of 2004 CC Rules, which prohibits availment of credit in a case of additional amount of duty becomes payable on account of fraud, collusion or any wilful misstatement or suppression of facts, etc., will not be applicable to the Assessee. 15.1. The Tribunal via the impugned common judgment has come to the same conclusion. 15.2. Therefore, insofar as Question Nos.(i) and (ii) are concerned, they will have to be answered in favour of the Assessee and against the Revenue. 15.3. Insofar as Question No.(iii) is concerned, which pertains to the alleged violation of Rule 4A of the Service Tax Rules, 1994 (as it then obtained), we find that, in the two Orders-in-Original of even date, i.e., 28.05.2008, there is no discussion with regard to the same. Consequently, it appears that there was no discussion on this aspect before the Tribunal. We must also note that, at the stage of hearing, no arguments were adva....