TaxTMI 
TaxTMI 
2018 (8) TMI 233
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.... of the body builders to the depot or factory of the appellant and transportation of vehicles from depot/factory of the appellant to the buyer‟s premises. The appellant had availed Cenvat credit as per the provisions of the Cenvat Credit Rules on the service tax paid for above-mentioned services under the service tax category "support services for business". A show cause notice had been issued by the Revenue to the appellant alleging that they had wrongly availed Cenvat credit of Rs. 4,73,31,151/- as they are entitled for Cenvat credit on such reviews. Thus, the Department has asked the appellant to reverse back the above-mentioned amount of Cenvat credit as per the provisions of Rule 14 of Cenvat Credit Rules, 2004 readwith Section 11A of the Central Excise Act, 1944, penalty provisions under Section 11AC readwith Rule 15 of Cenvat Credit Rules, 2004 has also been invoked. The matter came to be adjudicated on the first round of the litigation wherein the above charges were confirmed by the learned Commissioner vide his order-in-original dated 27/08/2008. The appellant approached this Tribunal, wherein the matter was remanded back for re-consideration before the Original Adju....
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....ave paid the service tax later on. It is further been added that it is not the case of the Department that the appellant has availed the Cenvat credit before availing the input services, it was that the service tax was not paid to the service provider after availing input tax credits in their books of accounts. The learned Counsel argued that the appellant was in a bonafide belief that the service tax may not be applicable on the type of services availed by them which made them to hold back the payment of value of service including the service tax to the provider of the services. The amount was later on paid and, therefore, that itself makes the credit availed by them as a valid credits and thus, it has been argued that there is no violation of the provisions of the Cenvat Credit Rules. 4. It has been the contention of learned Advocate that the substantive benefit of the credit cannot be denied to the appellant only on the ground of procedural or technical lapse. The learned Advocate has relied upon several judgments in support of his argument. The case laws cited by the learned Advocate are as mentioned herein below :- (i) Mangalore Chemicals & Fertilizers Ltd. vs. DC ....
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....n the strength of which Cenvat credit has been availed is not in the particular format. The learned Advocate has placed reliance to support his argument on the following case laws :- (i) Vodafine Essar Spacetel Ltd. vs. CCE - 2016 (43) S.T.R. 124 (Tri. - Kolkata); (ii) Eupec-Welspun Coatings India Ltd. vs. CCE - 2009 (235) E.L.T. 347 (Tri. - Ahmd.); (iii) CCE vs Stelko Strips Ltd. - 2010 (255) E.L.T. 397 (P&H); (iv) CCE vs. Aarti Steels Ltd. - 2017 (347) E.L.T. 415 (P&H); (v) CCE vs. Jalaram Plastic Pack - 2014 (34) S.T.R. 36 (Tri. - Ahmd.) and (vi) Everest Industries Ltd. vs. CCE - 2014 - TIOL - 1037 - CESTAT - MAD. 7. The learned Advocate has also argued that liability to pay interest on the credits availed by them but not utilized does not arise as the credits were only taken into the books of accounts and same was not utilized till September 2007. Before full utilization of such credits between August, September and October, they have made payment of the value of the service as well as the service tax on the business support services availed by them. The learned Advocate has relied upon Hon‟ble Karnataka High Court ....
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....ed only after receiving of services and we find that the credits-in-balance in the appellant‟s books of accounts have always remained above Rs. 3,03,35,302/- for the following months of July, August, September 2007. 12. In this regard, a glance at the table mentioned below will make the issue much clear :- Thus, it can be seen that barring the month of August, 2007 (where the balances were short only by an amount of Rs. 6 lakhs for having balance above the disputed amount of Rs. 3,03,35,302/-) for rest of the months the balances have been above the disputed amount and thus, it can be seen that Cenvat credits availed without making payment of same have remained unutilized, before service tax payable on them was actually paid. 13. It is also an admitted fact that the appellant have paid service tax due on these services to the provider of services during the month of August to October 2007. The details of the payments given to the service providers are as given in the table below :- Thus it can be seen that the service tax of Rs. 95 lakhs was paid in the month of August 2007 and balance amount was paid by October 2007. From this it transpires that actually entire Ce....
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....av Port Ltd. vs. CCE, Bhavnagar - 2009 (14) S.T.R. 53 (Tri. - Ahmd.). The relevant extract of this judgment is reproduced below :- "2. Learned Advocate appearing for the appellants submits that this was a procedural lapse on the part of the appellant in availing advance service tax credit prior to the payment of service tax of input service availed by them but ultimate credit is available to them in the next month. They are ready to pay interest for the intervening period. I agree with the above contention of the learned Advocate. The entire credit cannot be denied to them. Admittedly, the same stands availed premature and in any case was available during the subsequent period. Inasmuch, as, the same is utilized by the appellant, interest in accordance with law is required to be paid. Taking a lenient view, I do not find it a fit case for imposition of penalty. 3. In view of the above, denial of credit and imposition of penalty is set aside. Interest as per law is confirmed". From the above decision it can be seen that only credit availed at premature stage cannot be reason for denial of credit. In the above decision, it was held that at the most interest....
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.... of excise duty on the excisable product. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. It matures when the excisable product is received from the factory and the stage for payment of excise duty is reached. Actually, the credit is taken, at the time of the removal of the excisable product. It is in the nature of a set off or an adjustment. The assessee uses the credit to make payment of excise duty on excisable product. Instead of paying excise duty, the cenvat credit is utilized, thereby it is adjusted or set off against the duty payable and a debit entry is made in the register. Therefore, this is a procedure whereby the manufacturers can utilise the credit to make payment of duty to discharge his liability. Before utilization of such credit, the entry has been reversed, it amounts to not taking credit. Reversal of cenvat credit amounts to non-taking of credit on the inputs. 21. Interest is compensatory in character, and is imposed on an assessee, who has withheld payment of any tax, as and when it is due and payable. The levy of interest is on the actual amount which is withheld and the extent of de....
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....ation to the facts of this case. It is only when the assessee had taken the credit, in other words by taking such credit, if he had not paid the duty which is legally due to the Government, the Government would have sustained loss to that extent. Then the liability to pay interest from the date the amount became due arises under Section 11AB, in order to compensate the Government which was deprived of the duty on the date it became due. Without the liability to pay duty, the liability to pay interest would not arise. The liability to pay interest would arise only when the duty is not paid on the due date. If duty is not payable, the liability to pay interest would not arise". On the basis of above facts and position of law, we don‟t find any lapse in availing Cenvat credits of Rs. 3,03,35,302/-. 16. Now coming to the second question whether the Cenvat credit can be denied because the document on the strength of which Cenvat credit has been availed is not in the given format as provided under Rule 9 (1) of Cenvat Credit Rules, 2004. As discussed in the preceding paras, we find that the document on the strength of which Cenvat credit of Rs. 1,24,80,608/- was taken, are ha....
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....ace our reliance on the judgment in the case of Twenty First Century Printers Ltd. (supra). The relevant extract of this judgment is reproduced below :- "3. After hearing both the sides, we observe that the only ground on which the credit is denied and penalties imposed that the Bills of Entry under which the imported goods were cleared by M/s. Godfrey Phillips (India) Ltd. were not endorsed for diversion of the said goods to the appellant‟s manufacturing unit. The duty paid character of the goods in question was never in doubt. In fact there is a tacit admission on the part of the Revenue that the very same goods on which duty was paid by the importer were received in the factory of the manufacturer (appellant). 4. It is well settled that in the absence of any doubt about the duty paid character of the inputs that received in the factory and their utilization in the manufacture of final products, cleared on payment of duty, the denial of credit on the technical and procedural grounds is not called for. The Hon‟ble High Court of Gujarat in the case of M/s. Vimal Enterprises v. UOI - 2006 (195) E.L.T. 267 (Gujarat) has observed that the entire endeavour....