TaxTMI 
TaxTMI 
2018 (9) TMI 1438
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....ourse of audit of records of the appellant for the period 2011-12 to 2014-15, the appellant was found to have availed the Cenvat Credit of the value on outward freight paid beyond the place of removal of input services amount to Rs. 70,714/-. [3] Show cause notice was served on the appellant in terms of Section 11A of 1944 Act, stating therein that as per Rule 2(1) of the Rules of 2004, input services includes services used in relation to inward transportation of inputs or capital goods and outward transportation upto the place of removal, which as per the definition under Section 4(3)(c) of 1944 Act means (i) a factory or any other place or premises of production or manufacture of the excisable goods; (ii) a warehouse or any other place or premises wherein the excisable goods have been permitted to be deposited without payment of duty; (iii) a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory. [4] The appellant was noticed that he was entitled to avail Cenvat Credit of service tax on GTA up to the place of removal only and therefore, the credit of Rs. 70714/- (BED Rs. 68666, ....
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....GST & Central Excise Div. II Gwalior, by his order dated 19/09/2017 in an appeal by observing that:- "For admissibility to credit for outward transportation there is no requirement that the cost of freight should enter into the transaction value of the manufactured goods. According to the department, since the cost of outward transportation does not form part of the transaction value of the manufactured goods as defined in Section 4 of the Central Excise Act, 1944, any service tax paid for the outward transportation of goods from place of removal cannot be allowed as credit to the manufacturer, although, the question of denial of credit does not arise if the cost of freight is included in the transaction value. The issue in dispute in the present case is not one of valuation of excisable goods in terms of Section 4 of the Central Excisable Act, 1994 or under the Central Excise Valuation Rules but admissibility of CENVAT credit of service tax on GTA service. The two issues, namely, 'valuation' and 'CENVAT credit' are independent of each other and have no relevance to each other as clarified by the Board's Circular No. 137/3/2006-C.X. dated 2-2-2006. As per th....
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....rs. [10] The Commissioner (Appeals) in an appeal by the department set aside the order and upheld the recovery with interest by order dated 28/02/2018, it held:- "12. The respondent has contested the invocation of extended period on the ground that the matter was in the knowledge of the department. It is well settled that date of knowledge of the department is not relevant for the purpose of computing the five years period. For invoking the extended period, what is required to be seen is whether certain ingredients on the part of the assessee such as suppression of facts etc. are present or not. The provisions of the CENVAT Credit Rules are very clear and unambiguous. The appellant have taken credit on GTA services used beyond place of removal which is in blatant violation of the CENVAT Credit Rules. The fact of availment of such irregular credit was also not disclosed to the department. It was a clear case of suppression warranting invocation of extended period and imposition of mandatory penalty under Section 78. 13. It is well settled that mens rea is not a necessary ingredient for imposition of penalty. It was a clear case of suppression and there is not discretion in the ....
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....6 the period prescribed was one year). [14] Furthermore, sub-section (4) of Section 11A of 1944 Act stipulates: "(4) Where any duty of excise has not been levied or paid or has been shortlevied or short-paid or erroneously refunded, by the reason of - (a) fraud; or (b) collusion; or (c) any wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by any person chargeable with the duty, the Central Excise Officer shall,within five years from the relevant date, serve notice on such person requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 11AA and a penalty equivalent to the duty specified in the notice." [15] Relying on clause 2.7 and 3.2 of the circular No. 1053/02/2017-CX dated 10/03/2017 issued by the Central Board of Excise and Customs F.No. 96/1/2017-CX.1, which envisages:- "2.7 Discussion on Limitation: As per the provisions of Central Excise Act, 1944, the duty which has not been levied or paid or has been short levied or short paid or erroneously ref....
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....ly. It was observed by their Lordships that since first show cause notice did not contain the allegation of suppression of facts, the same could not have been taken to justify the invocation of extended period of limitation. It was also observed that the assessee having raise the plea of bonafide and the Commissioner having refused to impose any penalty upon the premise that he was not guilty of any act of malafide, thus found fault with the department invoking the extended period of limitation. [19] In Escorts Ltd. (supra), their Lordships were please to observe that whether in a particular set of facts and circumstances there was any fraud or collusion or willful mis-statement or suppression or contravention of any provision of any Act is a question of fact depending upon the facts and circumstances of a particular case. Mere failure or negligence on the part of the assessee where there was scope for doubt whether goods were dutiable or not, would not attract Section 11A of the Act. [20] In the case at hand, it was noticed that for the period 2011-12 to 2014-15, the assessee had availed Cenvat credit of service tax amounting to Rs. 70,714/- on outward freight paid beyond the pl....