TaxTMI 
TaxTMI 
2020 (3) TMI 849
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....ed under rule 15 of CENVAT Credit Rules, 2004, read with section 11AC of Central Excise Act, 1994, is also challenged in each. 2. The appellants, as concessionaires of National Highways Authority of India, are engaged in construction/upgradation of different carriageways with the agreement providing for operation and maintenance of the 'toll roads' that, admittedly, are exempt from tax under Finance Act, 1994. In the course of rendering such service, the appellants, having discharged service tax liability in the invoices pertaining to procurement of services, acknowledged the eligibility to credit thereon in their internal accounting from 2010 onwards as also on tax liability discharged under 'reverse charge mechanism' without recording these in the prescribed returns filed by them till the one pertaining to the period from October 2013 to March 2014. During the course of investigations, the ineligible credit, since brought on record in the returns, was reversed in March 2016. 3. Each of the appellants was issued with notice dated 21st April 2016 for recovery of the ineligible credit, charging of interest, under section 75 of Finance Act, 1994 read with rule 14 of CENVAT Cred....
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....is as good as not having taken the credit ab initio for which reliance is placed on the decision of the Hon'ble Supreme Court in Commissioner of Central Excise, Mumbai-I v. Bombay Dyeing & Manufacturing Co Ltd [2007 (215) ELT 3 (SC)]. As the impugned order has placed reliance on the decision of the Hon'ble Supreme Court in Union of India v. Ind-Swift Laboratories Ltd [2011 (265) ELT 3 (SC)], the appellants, contending its limited applicability, rely upon the decision of the Hon'ble High Court of Karnataka in Commissioner of Central Excise & Service Tax, LTU, Bangalore v. Bill Forge Pvt Ltd [2012 (279) ELT 209 (Kar)] in which emphasis was placed on the expression 'avail' vis-à-vis the expression 'taken' and that 'interest' is a compensation to Revenue recoverable, only if the exchequer has been deprived of its dues. Our attention is also drawn to order-in-appeal no. PVNS/40/APPEALS THANE/TH/2019-20 dated 30th May 2019 of Commissioner of GST & Central Excise (Appeals), Mumbai which, in relation to identical recovery initiated against M/s KM Toll Road Private Limited for the period from October 2010 to September 2015 of credit reflected for the first time in returns for the per....
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....debit of accumulated credit that had never been reported in the statutory returns. It is the contention in support of the impugned orders that inclusion in the private records of an assessee suffices for the purpose of consequences of 'taking' of credit without being eligible to it; there is no doubt that executive instructions do tend to such a conclusion though the legality of utilisation of credit accounted thus may well have been called in question. That, of course, is mere academic debate in the acknowledged 'exempted' status of the appellants. 8. To continue in the same vein, within which lies the purported rationale for initiation of the impugned proceedings and the arguments made in support by Learned Authorised Representative, is a question that is proffered by philosophers, scientists and social anthropologists since the first decade of the 18th century before responding with a proposition reflecting thought, phenomena and behaviour: 'if a tree were to fall on an island where there were no human beings would there be any sound?'. A taxing authority, bound by the unimpeachable realism of accumulating fiscal resource, can indulge in omphaloskepsis only at the cost of mor....
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....re Bombay Dyeing & Manufacturing Co Ltd, stays unaltered and valid; any decisions, purportedly overruling this proposition, as projected by tax authorities, must be perceived within the inexorable logic of that seminal decision. We cannot, really, fault the tax authorities for proposing an unintended rigidity as their commitment to constitutional obligation, even if were a bit over-enthusiastic, is but natural. That, however, cannot confer validation to recoveries primed by such assumptions. 11. It would appear that the decision of the Hon'ble Supreme Court in re Ind-Swift Laboratories Ltd, and the several decisions founded on that, were relied upon to discard, chronologically, preceding and succeeding decisions cited on behalf of the appellants. In doing so, the circumstances peculiar to the dispute that was carried to the Hon'ble Supreme Court do not appear to have been taken note of and thus contributing, in part, to the clogging of the appellate channel. The decision in re Ind-Swift Laboratories Ltd, doubtlessly, disfavoured the reading down of the disjunctive 'OR' in the impugned rule by the conjunctive 'AND' as contrary to the doctrine of enforcing expressed legislative in....
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....ous. In that regard the submission of the counsel for the appellant is well-founded that once the said credit is taken the beneficiary is at liberty to utilize the same, immediately thereafter, subject to the Credit rules.' and, thereby, placing the decision in perspective. It would appear that more than the substitution, the Hon'ble Supreme Court was concerned about an unintended benefit flowing to the assessee and, presumably, one that was enabled to use such wrongly taken credit without intrusive supervision. The writ remedy, under Article 226 of the Constitution of India, was sought by the assessee consequent upon the disregard of clarification sought by them on an order emanating from the Settlement Commission and initiated by them for ascertainment of the date of commencement and date of conclusion in the computation of interest and the Hon'ble Supreme Court was constrained to note that any such proceeding was beyond statutory jurisdiction and that the basis of statutory settlement was the contents of the show cause notice which, inter alia, proposed recovery of interest, that, by reason of application before the said Commission, was precluded from validated, or otherwise ....
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....e exchequer. The renunciation of jurisdiction to adjudicate upon the claim for exclusion from interest liability does not appear to have been sanctioned by the decision of the Hon'ble Supreme Court. 17. From a perusal of rule 14 of CENVAT Credit Rules, 2004 and, in particular, of the disjunctive collation of 'taken', 'utilized' and 'erroneously refunded' with the expression 'wrongly' qualifying, not three but only two, it would appear that the assumption of credit and a refund of credit, if wrong, would have to pay the price in the form of 'interest.' However, it is unusual for 'utilization' to be qualified with 'ineligibility' on its own as 'utilization' is solely for the purpose of discharge of tax/duty liability which, even if not warranted, does not, by any stretch of usage, behove description as 'wrongly.' Such a transferred epithet can only reasonably mean 'utilization' after having been wrongly taken and, thereby, made ineligible. 18. In these circumstances of the decision, relied upon by the adjudicating authority, not being extendable to the alleged infractions on the part of the appellants herein and a catena of decisions in re Bombay Dyeing and Manufacturing Co Ltd....
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.... acceptance of particular thing and utilisation of the same comes only when someone has the said thing in his possession. Occasionally, those words are used as synonyms of each other and therefore used interchangeably. A careful scrutiny of the heading of Rule 14 vis-a-vis its content would clearly indicate that both taking and utilisation are put in the body of the Rule to carry the same meaning since in the body of Rule 14 "taken" is not prefixed with the word "wrongly" which is embedded in the heading part while "utilisation" in the body of the Rule is suffixed with the word "wrongly" and the same word "utilisation" is conspicuous by its absence in its Heading. Therefore, it cannot be said that "cenvat credit has been taken" as found in the body of Rule 14 is the credit rightfully taken and utilised wrongfully since the heading itself says that cenvat credit wrongly taken has to be recovered. To my considered view a stroke or slash between the word "taken" and "utilised" would have brought clarity to the Rule but being creature of statute this Tribunal cannot traverse beyond its scope. However, having regard to the fact that the word "has been" occurring twice in the same senten....