TaxTMI 
TaxTMI 
2020 (6) TMI 61
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.... did not carry either serial number or service tax registration number. Period - January, 2005 to February, 2011. (b) Rs. 41,94,123/- - Demand of Cenvat credit on the ground that credit lying in the account of branches other than Nadiad, has been wrongly transferred under centralized registration without any documents. Period - 2011 (c) Rs. 5,59,851/- - Demand of Cenvat credit of service tax paid on various services such as Medi-claim, Vehicle Insurance, Canteen Exp., CHA Bills, Guest House, Vehicle Hire Charges, Membership Charges, Residential Premise on the ground that the said services do not have any nexus to the manufacturing activity carried out by the appellant. Period - January. 2005 to February, 2011 (d) Rs. 39,60,634/- - Demand of Cenvat credit on the ground that the same pertains to ISD invoices issued by appellant's Mumbai and Ahmedabad branch for services received by the said units prior to their registration as Input Service Distributors. Period - 2010 (e) Rs. 14,16,83,202/- Demand of amount payable in terms of Rule 6 of the Cenvat Credit Rules for availing Cenvat credit of service tax paid on input services used for both exempted a....
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....show cause notice for the period August 2007 and September 2011. The said show cause notice was adjudicated vide OIO dated 24.02.2014wherein all the demands, which were proposed in the show cause notice, have been confirmed with interest and penalties. Being aggrieved by the said OIO, captioned appeal is filed by the appellant. 3. Shri M. Pandya, Learned Counsel appearing on behalf of the appellant, in respect of the major demand of Rs. 14,16,83,202/- submits that said demand is equivalent to proportionate credit for the period August 2007 to March 2008 and @ 10%/ 5% of the value of clearances of exempted goods for the period April 2008 to September 2011. He submits that as per Rule 6, when the appellant has not maintained separate accounts for exempted and dutiable goods, then the assessee has an option to - (i) pay an amount equal to 10% /5% of the exempted goods, or (ii) pay proportionate amount as per formulae provided under Rule 3(A) of Rule 6 or (iii) pay an amount equivalent to Cenvat credit attributable to Input service used in the manufacture of exempted goods. He submits that various courts and judgments has also accepted that if the proportionate Cenvat credit attribu....
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....enz India (P) Ltd - 2015 (40) STR 381 (Tri. Mum) (c) CCE, Puducherry - 2015 (323) ELT 323 (Mad) (d) T.T. Limited - 2017 (355) ELT 71 (Raj.) (e) Mettur Pharmaceuticals Limited - 2017 (356) ELT 184 (Mad.) (f) Reliance Insurance Co. Ltd. -2018 (363) ELT 1050 (Tri. Mum.) (g) Himmat Glazed Tiles - 2018 (15) GSTL 486 (Guj.) 5. As regards the Cenvat credit payment of Rs. 3,30,189/-, which is on the basis that certain invoices issued in respect Consultancy Management Service and Security Services on which Cenvat credit was availed by the appellant did not carry either serial number of invoices or service tax Registration of the service tax. He submits that demand on this count is without jurisdiction inasmuch as the demand confirmed is for the period even beyond five years. As is evident from the show cause notice, the invoices are from the period January 2005 to February 2011 whereas the show cause notice was issued by the department only on 07.09.2011. Therefore, the demand which is beyond five years is illegal. As regards the discrepancies in invoices, it is stated that there is no suggestion in the impugned order that the service tax h....
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....ithout jurisdiction of the adjudicating authority. He submits that the demand is otherwise not legal inasmuch as all the aforesaid services have been held to be legally permissible and having nexus to the manufacturing activity. He relied on the following judgments:- (a) CST, Chennai vs. Spectrasoft Technologies Limited -2019 (24) GSTL 224 (Tri. Chennai) (b) CST, Mumbai vs. FIL Capital Advisors (India) Pvt. Limited - 2015 (40) STR 1073 (Tri. Mumbai) (c) CCE, Bangalore vs. Stanzen Toyotetsu India (P) Limited - 2011 (23) STR 444 (Kar.) (d) Vinayak Steels Limited vs. CCE & ST, Hyderabad - 2017 (4) GSTL 188 (Tri. Hyderabad) 7. The next demand of Rs. 39,60,634/- was also confirmed on the ground that Cenvat credit has been wrongly availed on ISD invoices issued by the appellant's Ahmedabad and Mumbai branch for services availed by the said unit prior to the date on which ISD registration was granted to the said unit. He submits that the issue of distribution of input service credit prior to obtaining registration is no longer res-integra and is settled by various decisions of the Tribunal holding that availment of Cenvat credit on such ISD in....
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....(Tri. LB) 10. We have heard both sides and perused the record. We find that major demand of Rs. 14,16,83,202/- was confirmed invoking Rule 6, for the period August 2007 to September 2011. This demand consist amount equal to proportionate credit for the period August 2007 to March 2008 and 10%/5% of the value of clearance of the exempted goods for the period April 2008 to September 2011. We find that there is no dispute that the appellant have reversed Cenvat credit much more than the Cenvat credit attributed to common input service used in the manufacture of exempted goods. The appellant have also paid interest on such reversal. As per option available under Rule 6, one of the option is that appellant is required to reverse proportionate credit in terms of sub-Rule 3(A) of said Rule on the inputs and input service attributed to exempted goods and therefore, in the present case, when the appellant have reversed the credit, which should be proportionate credit on the common input service attributed to the exempted goods and also paid interest. The entire demand raised under Rule 6 will not sustain. This issue has been considered by this Tribunal time and again in various judgments....
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....xempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for - (a) the receipt, consumption and inventory of inputs used - (i) in or in relation to the manufacture of exempted goods; (ii) in or in relation to the manufacture of dutiable final products excluding exempted goods; (iii) for the provision of exempted services; (iv) for the provision of output services excluding exempted services; and (b) the receipt and use of input services - (i) in or in relation to the manufacture of exempted goods and their clearance upto the place of removal; (ii) in or in relation to the manufacture of dutiable final products, excluding exempted goods, and their clearance upto the place of removal; (iii) for the provision of exempted services; and (iv) for the provision of output services excluding exempted services, and shall take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of clause (a) and input services under sub-clauses (ii) and (iv) of clause (b). (3) Notwithstanding anything contained in sub-rules (1) and (2), the manufac....
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....writing to the Jurisdictional Superintendent of Central Excise. Secondly the appellant, as provided under Claus (b) of sub-rule (3A) have not paid the amount of Cenvat on monthly basis and paid after almost 11 months. 5.1 We have observed that in Rule 6(3) prevalent at the relevant time, two options have been provided :- (i) Payment of 5% on value of exempted services. (ii) Payment of an amount equal to the Cenvat Credit amount attributed to input services used in or in relation to manufacture of exempted goods or provision of exempted services as provided under sub rule (3A)(b). It is observed that the appellant has availed the option provided under sub-rule (3)(ii) of Rule 6 and paid an amount as per sub-rule (3A) along with interest and intimated the same to the jurisdictional superintendent in writing vide letter dated 14-3-2012. From the perusal of the said letter, we observed that the appellant categorically stated in the said letter that payment of Cenvat Credit, which they have made alongwith interest is in accordance with Rule 6 (3A) of Cenvat Credit Rules. With this act of the appellant, it is clear that the appellant opted for the opti....
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.... (v) Cenvat credit of inputs and input services lying in balance as on the date of exercising the option under this condition. As per the submission of the appellant and perusal of their letter along with enclosed details, it is found that more or less all these particulars were intimated to the Jurisdictional Superintendent. The appellant has been filing their returns regularly on monthly basis to the department. On perusal of the copies of the such return submitted along with appeal papers, it is observed that the particulars, as required under clause (a) of sub-rule (3A) of Rule 6 has been produced to the range superintendent. Therefore all the particulars which are required to be intimated to the Jurisdictional superintendent while exercising option stand produced. Though these particulars have not been submitted specifically under a particular letter, but since these particulars otherwise by way of return and some of the information under their letters has admittedly been submitted, we are of the view, as regard this compliance of Rule 6(3A), it stood made. 5.3 As regard the contention of the adjudicating authority that this option should be given in begin....
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.... particular time, then option of payment of 5% will automatically be applied. Therefore we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. 5.5 As discussed above and in the facts of the case that actual Cenvat credit attributed to the exempted services used towards sale of the bought out cars in terms of Rule 6(3A) comes to Rs. 4,06,785/- where as adjudicating authority demanded an amount of Rs. 24,71,93,529/-. In our view, any amount, over and above Rs. 4,06,785/- is not the part of the Cenvat Credit, which required to be reversed. The legislator has not enacted any provision by which Cenvat credit, which is other than the credit attributed to input services used in exempted goods or services; can be recovered from the assessee. 5.6 We have gone through judgments relied upon by the Ld. A.R. In the arguments, we found that as regards the judgments on the issue of availment of Cenvat credit on the input or input services used in dutiable and exempted goods, the provision involved in the ....
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....t was denied only on the ground that in the invoices, certain services did not carry either Serial Number or Service Tax Registration. We find that this is a technical infraction and moreover this error is not on the part of the appellant but on the part of the service provider who issued the invoices. It is not a case of the department that in said invoices, no service tax was paid and there is no dispute about receipt and use of the services, which are the main criteria for allowing Cenvat credit on input service. Therefore, in our view, credit, only on the technical infraction should not be denied. This issue has been considered by this Tribunal in the case of Novozymes South Asia Pvt. Limited (Supra) and held as under :- 5. Coming to the deficiency in the documents, I observe that while applying the provisions of the Statute, officers seem to ignore important aspects. In para 15 of the Order-in-Original, the original authority observed "sub-rule (2) of Rule 9 of Cenvat Credit Rules, 2004, the bill/invoices shall contain the Registration No. of the person issuing, name and address of the person receiving taxable service, description and classification of the taxable ser....
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....nd does not contain details as required under sub-rule (2) of Rule 9 of Cenvat Credit Rules, 2004...". Apparently the Commissioner (Appeals) is too busy to verify the invoice in to deal with limitation also. It is strange that the original authority in para 16 of his order observes : "It is also noticed that the assessee have not indicated or produced any specific documents or records before me during the adjudication proceedings as evidence that the documents on which the issue in question was brought to the knowledge of department earlier. The assessee has therefore suppressed the fact of availing and utilizing credit on Service Tax paid on services from the knowledge of the department. But for observation of the department audit team, the fact of irregular availment of Cenvat credit would have gone unnoticed and resulted in revenue loss to the exchequer...." I am not able to understand what exactly was suppressed by the assessee in this case. The requirement of submission of the documents on the basis of which credit has been taken is no longer in the Statute book. Therefore, the appellant was not required to produce the documents on the basis....
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....of credit cannot be denied. This issue has been considered by this Tribunal in the case of Central Bank of India (supra) wherein this Tribunal has considered identical issue as under :- "6. After hearing both the sides at length and going through the material available on record, we are of the view that appellant is a public sector undertaking Bank, no individual interest is involved. The main ground on which Cenvat credit was denied is lack of proper document for transferring credit lying at various branches to the zonal office upon approval of centralized registration. The fact remains that the documents were available in the books of account and as mentioned no individual interest is involved. Further, we find there is no statutory requirement of specified documents for transferring credit available with the multiple registrations to centralized registration. Hence, when there is no dispute regarding the credit originally availed by various branches, transfer of such credit cannot be denied. We are of the view that there is no distribution of credit in the present situation. 7. Considering the above factual position, we find that impugned order is not ....