TaxTMI 
TaxTMI 
TaxTMI 
2020 (11) TMI 34
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....med. (ii) Rs. 6,53,650/- under Rule 14 of the CENVAT Credit Rules, 2004. 3. Three issues arise for consideration in this Appeal and they are as follows:- (i) Includability of diesel, explosives etc. supplied free of cost, in the value of taxable services provided by the Appellant; (ii) Denial of CENVAT credit on two counts, namely excess availment of credit in the absence of bills/challans and non-reversal of credit availed on 'tippers'; and (iii) Demand of interest on suo-moto reversal of credit by the Appellant. 4. The Appellant is engaged in providing site formation and clearance, excavation, earth moving and demolition services as also mining services. It claims that it availed CENVAT credit on inputs, capital goods and input services under the provisions of the CENVAT Credit Rules 2004, the Credit Rules. The records indicate that a contract was executed between the Appellant and M/s Singareni Collieries Company Limited, SCCL for blasting, hole drilling, controlled blasting with shock tube initiation, excavation, loading and transportation and dumping. According to the Appellant, the contract stipulated that the explosives, accessories, diesel required for the job of d....
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....ial year 2009- 2010. In regard to the interest liability of Rs. 6,53,650/-, the Appellant submitted that by letter dated December 20, 2011 it had already paid interest amount of Rs. 2,46,561/- on the suo-moto reversal of credit, computed from date of availment of credit to the date of reversal. 7. However, a show cause notice dated October 23, 2019 was issued to the Appellant proposing to recover service tax amounting to Rs. 14,07,98,655/- on the value of diesel, explosives etc, received by the Appellant free of cost, under section 68 of the Finance Act, 1994, the Finance Act. Further, credit of Rs. 30,05,484/- was proposed to be disallowed by alleging excess availment of CENVAT credit. A demand of CENVAT credit amounting to Rs. 64,91,195/- was also proposed on the ground that since credit on 'tippers' was made admissible w.e.f. June 22, 2010, credit availed by the Appellant on 'tippers' received prior to such date was inadmissible. The show cause notice also proposed to demand interest of Rs. 6,53,650/- on the suo-moto reversal of credit. 8. The Appellant submitted a detailed reply to the show cause notice stating therein that none of the demands proposed in the show cause notic....
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....) of the Valuation Rules has been struck down by the Supreme Court in Union of India v/s Intercontinental Consultants and Technocrats Pvt. Ltd. 2018 (10) GSTL 401 (SC) ; (iii) During the adjudication proceedings, the Appellant had placed reliance on the decision of the Tribunal in Karamjeet Singh & Co. Ltd. v. Commissioner of Central Excise, Raipur, 2013 (32) STR 740 (Tri.- Del.), wherein it was held that the value of free of cost diesel supplied by the service recipient shall not be includible in the taxable value of services. However, the Commissioner distinguished the aforesaid decision on the ground that the Department had filed an appeal against the decision of the Tribunal. This finding of the Commissioner is unsustainable on two accounts. Firstly, the appeal preferred by the Department (C.A. 2452-2455/2014) had been disposed of by the Supreme Court by Judgment dated February 19, 2018, while deciding Bhayana Builders; and secondly, it is an established law, that a binding precedent cannot be distinguished merely on the ground that the Department had preferred an appeal against such a decision before an appellate forum; (iv) Disallowance of CENVAT credit amounting to Rs. ....
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....ed period of limitation was correctly invoked. 13. The submissions advanced by the learned Counsel for the Appellant and the learned Authorized Representative of the Department have been considered. 14. The first issue that arises for consideration is regarding the includability of diesel, explosives supplied free of cost in the value of taxable services provided by the Appellant. 15. In this connection, it would be pertinent to refer to the order dated September 26, 2008 issued by SCCL (the company) in favour of the Appellant (the contractor). The relevant clauses of the work order are reproduced below:- "With reference to the above, it is to inform that your offer has been accepted and the subject work is awarded to you for execution, as per the scope, terms and conditions, details, etc, furnished hereunder. Note: In this order the word 'CONTRACTOR' means 'R.K. Transport Co.' and the word 'COMPANY' means 'The Singareni Collieries Company Limited' 1. Scope of Work Blast hole drilling, controlled blasting with shock tube initiation, excavation, loading, transportation and dumping etc. of over burden. Explosives & accessories and diesel would be supplied by SCCL. b) B....
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....n proceedings, the Appellant had placed reliance in support of this issue on a decision of the Tribunal in Karanjeet Singh, wherein it was held that the value of free cost of supply by the service recipient shall not be included in the taxable value of services. The only ground mentioned by the Commissioner for not following this decision is that the Department had filed an Appeal against the decision of the Tribunal. It was not open to the Commissioner to refrain from following this decision merely because the Department had preferred an Appeal against such decision. 21. The second issue that arises for consideration is regarding the disallowance of CENVAT credit amounting to Rs. 30,05,484/- on account of excess availment of credit. The Commissioner has disallowed this amount of CENVAT credit for the reason that there was a difference between the closing balance of the CENVAT credit in the return filed by the Appellant in September, 2009 and the opening balance in October 2009. According to the Appellant, the difference had arisen on account of an inadvertent clerical error in the filing of the returns, wherein the Appellant had recorded the closing balance of September, 2009 as ....