2021 (7) TMI 635

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.... availed on payment made under Reverse Charge Mechanism as Service Tax on freight of imported goods along with interest and penalty for the period 2016-17 2. Briefly stated, the facts of the case are that the appellant, M/s.Petro Carbon and Chemicals Private Limited, is engaged in the business of manufacture and sale of CPC classifiable under chapter 27 of the Central Excise Tariff Act, 1985. 3. Based on an EA 2000 audit of the Excise and Service Tax records of the Appellant for the period 2016-17, it was issued with a Show Cause Notice (SCN) dated 27.12.2018 alleging irregular availment of Cenvat credit to the tune of Rs. 14,82,558/- and to impose penalty. The said SCN culminated into Order-in-Original dated 03.10.2019 wherein the Ad....

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....of Cenvat credit of Service Tax paid above on the ground that such amount was not payable as Service Tax at all as the said services were exempted services as per section 66D of the Finance Act, 2017 as amended from time to time. 6. He further stated that since it is not disputed by the Revenue that the Service Tax has been paid by the Appellant under Reverse Charge and the same is for business use only, the question of denial of Cenvat credit cannot arise as the entire situation is revenue neutral. He relied on the judgment of Hon'ble Madras High Court in the case of COMMR. OF C.EX. & S.T., LTU, CHENNAI Versus TAMILNADU PETROPRODUCTS LTD. [2015 (40) S.T.R. 878 (Mad.)], wherein, in a similar situation of payment of tax under Reverse Char....

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....s by vessel services. However, the tax was paid and accordingly the Appellant had availed Cenvat credit of the same. I find that the issue above is no longer res integra in view of the judgment of the Hon'ble Madras High court in the case of COMMR. OF C.EX. & S.T., LTU, CHENNAI Versus TAMILNADU PETROPRODUCTS LTD. (supra), wherein the Hon'ble High Court held as under :- "9. It is an admitted fact that the first respondent/assessee was not liable to pay service tax on the transportation of goods both inward and outward upto 31-12-2004. The liability was imposed only with effect from 1-1-2005. But, unfortunately, the first respondent/assessee paid service tax, even at a time when there was no liability on them. Since they made paym....