2021 (8) TMI 166

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.... involved, amounts of CENVAT credit and penalty imposed is appended below: Sl. No. Appeal No. Period involved Demand of credit (Rs.) Penalty u/s 78 1. ST/26822/2013 2005-2009 2,53,476/- 2,53,476/- 2. ST/26824/2013 2005-2009 12,74,632/- 12,74,632/- 3. ST/26825/2013 2005-2009 2,59,266/- 2,59,266/- 4. ST/26826/2013 2005-2009 4,00,755/- 4,00,755/- 5. ST/26827/2013 2005-2009 46,673/- 46,673/- 6. ST/26828/2013 2005-2009 2,52,815/- 2,52,815/- 7. ST/26829/2013 2005-2009 1,21,975/- 1,21,975/- 8. ST/26830/2013 2005-2009 81,017/- 81,017/- TOTAL 26,09,609/- 26,09,609/- 3. Briefly the facts of the present case are that the appellant is engaged in the manufacture and clearance of excisable goods falling under Chapter 85 of Central Excise Tariff Act, 1985. They are also providing various taxable output services defined under Section 65(105) of the Finance Act, 1994. The appellants are mainly engaged in supply, erection and installation of electrical equipment to various agencies like State Electricity Boards, National Thermal Power Corporations, Delhi ....

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.... an exempted service for the period prior to 01.04.2011 and the provisions of Rule 6 of CENVAT Credit Rules, 2004 cannot be made applicable for the period prior to 01.04.2011. For this submission, he relied upon the following decisions: • Mercedes Benz India Pvt. Ltd. Vs CCE, Pune-I, 2016 (41) STR 577 (Bom.). • Marudhan Motors Vs CCE & ST, Jaipur-II, 2017 (47) STR 261 (Tri.Del.). • Franke Faber India Ltd. Vs CCE, Aurangabad, 2017 (52) STR 155 (Tri. Mumbai). • CCE, Ghaziabad Vs Avon International Pvt. Ltd., 2017 (5) GSTL 376 (Tri. All.). 6. He further submitted that there was no clarity on the requirement of reversal of CENVAT credit availed on common input services attributable to trading for the period prior to 01.04.2011. The clarity was brought in by way of amendment to Rule 2(e) of CENVAT Credit Rules and consequent application of Rule 6 of CENVAT Credit Rules with effect from 01.04.2011. Learned Counsel fairly conceded that there have been conflicting judgments on the issue whether the amendment brought in the definition in Rule 2(e) is applicable retrospectively or prospectively and therefore he did not press these appeal....

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....f FL Smidth Pvt. Ltd. Vs CCE, 2014-TIOL-2186-HC-MAD-CX and submitted that the said decision is not applicable in the facts of the present case because in that case, the Hon'ble High Court did not have an opportunity to examine whether the input service received in relation to the activity of providing taxable service can be denied only because the provision of service also involves supply of goods. Learned Counsel also submitted that the appellant did not utilize the CENVAT credit and the proportionate credit attributable to trading was reversed prior to utilization and therefore, the demand of interest and imposition of penalty is not sustainable in view of the following decisions: • CCE & ST LTU, Bangalore Vs Bill Forge Pvt. Ltd.-2012 (279) ELT 209 (Kar.) • CCE, Madurai Vs Strategic Engineering (P) Ltd.-2014 (310) ELT 509 (Mad.) • J.K. Tyre & Industries Ltd. Vs CCE-2016 (340) ELT 193 (Tri. LB) • Commissioner of Central Tax Bangalore Vs Yaskawa India Pvt. Ltd, 2019-TIOL-3128-CESTAT-BANG • FCI OEN Connectors Ltd. Vs CCE, Kerala, 2019-TIOL-1387-CESTAT-BANG 7. On the other hand, learned AR reiterated the findings of ....

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....f limitation and has observed in Paras 6, 7 & 8 which is reproduced herein below: 6. From the above, it is clear that the position was clarified by the Government by insertion of Explanation only with effect from 1-4-2011 that the trading activity will be Exempted Services. The Explanation is clarificatory in nature and can be held to be applicable even for the past period. Thus, at the relevant period of time, viz., from April 2009 to March 2011, the Assessee was, obviously, under bona fide belief in view of the conflicting decisions of the Tribunals during that period and taking the trading activity as Exempted Services, availed the CENVAT Credit which is sought to be reversed and recovered by the Department invoking the extended period of limitation. Such a bona fide belief cannot be held to be done with ulterior purpose for evading the Duty and therefore, the extended period of limitation would not be available to the Revenue Authority in view of the aforesaid decision rendered by the Hon'ble Supreme Court. 7. The judgments relied upon by the Learned Counsel for the Revenue viz., Gujarat High Court's decision in CCE v. Neminath Fabrics Pvt. Ltd. as well as dec....