TaxTMI 
TaxTMI 
2023 (1) TMI 342
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....Sasi Nair, Senior Executive of the assessee including other persons, the investigation came to the conclusion that the assessee had indulged in the removal of spares/ components as such to EOUs under CT-3 certificates without paying/reversing the Cenvat Credit. Shri Sasi Nair in statements categorically admitted /stated that all the spares/ components cleared as such to EOUs under CT-3 certificates were imported components/ spares, which were randomly tested in order to ensure the quality of the products and as a result such testing neither the name, character nor the usage of the spares/ components/ has been changed. Thus, it appeared that the assessee had removed the cenvatable components/ spares as such under CT-3 certificate without reversal of Cenvat Credit in contravention of the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004 read with Notification No. 22/03-CE dated 31.03.2003. 3. It further appeared that the assessee had received taxable services provided by foreign service providers and availed the cenvat credit on the basis of the invoices received by them. As per Rule 9 (e) of the Cenvat Credit Rules, 2004, the cenvat credit shall be taken on the basis of ch....
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....is not required to be reversed and Refunds of Cenvat Credit in terms of Rule 5 of the Cenvat Credits are also allowed. This is a settled position in law by now. In the present matter Goods in question were cleared vide Notification No.22/2003-CE dt. 31-3-2003 to 100 % EOU against CT-3 certificate procedure without payment of duty which was on the condition that "the user industry brings the excisable goods directly from the factory of manufacture or warehouse". There is no dispute on the facts that goods in question were delivered directly from the factory of Appellant who is a manufacturer, holding Central Excise Registration and goods in question were "Excisable Goods". Section 2(d) of Central Excise Act defines "excisable goods" means goods specified in [the Fourth Schedule] as being subject to a duty of excise and includes salt. Revenue has noted this condition of the Notification No.22/2003-CE and assumed & presumed that such "excisable goods" must have been manufactured in the same factory from where they are supplied to 100 % EOU. This is a completely erroneous view by Revenue, which is not in consonance with Rules and Regulations made and the established law by the decision....
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....of inputs as such from Appellant‟s factory against CT-3, such goods (inputs) have reached in 100 % EOU. Even otherwise for receiving "Inputs" in the 100 % EOU, without payment of duty against CT-3 Certificates, the receiver 100 % EOU submits Bond for discharging duty liability, in case of violations or contraventions of Rules. The supplier of "inputs" does not have liabilities in such case. 8. As regard the demand of Rs. 1,25,65,890/- he submits that assessee has utilized services of Foreigners i.e. the persons not having permanent establishments in India for their various services Provided. Service Tax liability worked out Rs. 1,25,65,890/-, which was discharged by assessee by debit from Cenvat Credit A/c for Rs. 59,99,281/- and Rs. 62,77,683/- by Challans. Revenue‟s contention is that entire payment should be by Challans. The impugned order has ordered to disallow Cenvat Credit of Rs. 1,25,65,890/-, dropped demand of Rs. 59,99,281/-, appropriated Rs. 62,77,683/- paid by Challan and ordered recovery of remaining amount of Rs. 2,88,917/-. Service Tax liability from 11/2003 to 3/2007 for utilizing Services of Foreigners as decided by impugned order has been rightly dr....
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....CCE vs. Ratan Melting & Wire Industries- 2008 (231) ELT 22(SC). 9. He also submits that Revenue has contended in its Appeal that it is not permissible to pay Service Tax from Cenvat Credit Account in such payment under RCM. However for using Services of Foreigners, Service Tax is payable only from 18-04-2006 i.e. from enactment of Section 66A of Finance Act, 1994. There was no restriction for Payment of Service Tax under reverse charge mechanism under Rule 3(4) of Cenvat Credit Rules 2004. Explanation is introduced under Rule 3(4) of Cenvat Credit Rules, 2004 vide Notification No. 28/2012-C.E. (N.T.), dated 20-06-2012, with effect from 01-07-2012, which provided restrictions that Cenvat credit cannot be used for payment of Service Tax in respect of services where person liable to pay tax is service recipient. There was no restriction for Service Tax payment by assessee upto 30-06-2012. Notification No. 28/2012-CE (NT) dated 20-06-2012 with effect from 01-07-2012 may kindly be applied appropriately in the facts of this case. He placed reliance on the following decisions: (i) Palacio Property Developers Pvt. Limited vs. CC Goa-2022 (58) GSTL- 420(Tri-Mumbai) (ii)....
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....o justification for demand of any amount out of demand of Rs. 1,25,65,890/- and the Revenue‟s Appeal No. E/647/2012-DB deserves to be dismissed on this point. 12. As regard the demand of Cenvat Credit of Rs. 90,45,338/- on the ground that such credit pertained to other premises of Appellant not registered, he submits that impugned order has denied credit of Rs. 6,32,118/-, out of demand of Rs. 90,45,338/- for the period from November 2003 to March 2004. The Ld. Commissioner has taken the view that the assessee vide its letter dated 29-03-2004 has informed that they have adopted Centralised Billing and Accounting system at Gandhinagar in respect of all Branches and Regional Offices from where taxable Services are provided and accordingly Service Tax would be paid from Gandhinagar for services provided by all branches and regional offices. The Jurisdictional Assistant Commissioner, Central Excise, Gandhinagar vide letter dated 19-04-2004 had granted permission and post facto approval was given by Commissioner. Hence, impugned order has allowed credit of Rs. 84,13,220/- and denied the remaining credit of Rs. 6,32,118/-. However, assessee was registered with Central Excise fro....
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....rther, credit is demanded from November, 2003 to July 2006 by SCN No. V.85/15-150/OFF/OA/08-09 dated 07.07.2008 invoking the extended period of limitation, which is not sustainable in the facts of this case. The ingredients required to invoke extended period are not existing in this case. The case is of interpretation of whether Cenvat Credit can be taken or otherwise. In such cases of interpretation of provisions and without any intention to evade duty/tax, extended period of time limitation can not be invoked. Therefore, entire demand is not sustainable on merits or on time limitation in the facts of this case. Therefore, the entire demand is time barred and consequently, conformation of all the demands with interest and penalties as held by the adjudicating authority does not survive. 15. He also argued that the Appeal is filed by the department after Review Order dated 08-08-2012, which is not reviewed within 3 months from the date of order of adjudicating authority passed on 25-04-2012. Appeal No. E/647/2012-DB filed on the basis of Review Order No. R-08/2012 dated 08-08-2012 is not maintainable in terms of Section 35E (3) of the Central Excise Act 1944. Section 35E(3) of C....
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.... (iv) CCE vs. Bhilai Wires Limited - 2009(236)ELT 40 (HP) 15.1 Shri Vijay G Iyengar, learned Superintendent Authorised Representative for the Revenue reiterates the findings of impugned orders in respect of party appeals and grounds of appeal in the Revenue appeal. 16. We have heard both sides and perused the records of the case. On going through the rival submissions and the records of the case, we find that assessee was registered with the Central Excise authorities as a "manufacturer of goods" and was also holding Service Tax Registration as service providers. Assessee was availing the facility of Cenvat Credit. Assessee had imported and also indigenously procured various parts and components, brought into their factory at Gandhinagar and assembled excisable goods like EPBX Systems which were cleared into market on payment of duty. Assessee has also paid Service Tax under forward charge or reverse charge under section 68 of Finance Act 1994, while providing services in market or while receiving services of foreigners in India. The department objected Assessee‟s Cenvat credit on the following 3 issues :- Sr. No. Issue in dispute Demand Rs. (i) Cen....
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....setting aside impugned Order-in-Appeal." The ratio of above judgment squarely applicable in the present matter and we following the same are of the view that demand confirmed on this count in impugned order is not sustainable. 18. Further we have also gone through the provisions of Rule 3(5) of Cenvat Credit Rules 2004 applied by the revenue for denial of Cenvat Credit to the Appellant. Before proceeding further, we feel it appropriate to analyze said provision. The text of Rule 3(5) is reproduced here below :- "Rule3. (5) When inputs or capital goods, on which Cenvat credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9 :" In the present matter it is undisputed fact that on imported spares/ components appellant has undertaken the testing process. The Department and Ld. Commissioner both are of the view that the process carried out by the appellant wit....
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.... "The assessee having validly availed Cenvat credit, same is required to be reversed only if goods were cleared in the same position without payment of Excise duty. In the present case, it has been held by the Tribunal that goods were not cleared in the same position but after having been used and in such situation Rule3(5) of the Rules will not apply." The Hon‟ble Bombay High Court in the case of Cummins India Ltd. v. Commissioner of Central Excise, Pune-III reported in 2007 (219) E.L.T. 911 (Tri.-Mumbai) confirmed the order of the Appellate Tribunal which has held as under : "The plain and simple meaning of expression "as such" would be that capital goods are removed without putting them to use. Admittedly, in the present case capital goods have been used for a period of more than 7 to 8 years. As such, interpretation given by the authorities below would lead to absurd results if an assessee is required to reverse the credit originally availed by them at the time of receipt of the capital goods, when the said capital goods are subsequently removed as old, damaged and unserviceable capital goods. This would defeat the very purpose of grant of facility of M....
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....ligible for the cenvat credit thereon. Hence entire action of the revenue in this matter is illegal and unsustainable, both on facts and in law. Further in this matter Cenvat demand is on the basis that the service tax liability cannot be discharged from the cenvat account. We, however, propose to accord to the dispute a more empirical analysis. 22. Section 66A of the Finance Act, 1994 makes the recipient of any service, specified in Section 65(105) of the Finance Act, 1994 - which would cover all "taxable services" - received by a person located in India, from a service provider located outside India, liable to pay Service Tax thereon as if he had himself provided the service in India. This, in taxing parlance, is known as payment on "reverse charge basis". In the Service Tax universe, Service Tax is payable, on reverse charge basis in various circumstances, chiefly in cases of "import of service", i.e. where the Service Tax provider is located outside India and the Service Tax recipient is located in India. Rule 2(1)(d)(iv) of the Service Tax Rules defines the recipient of the service, in cases where the service, received by a recipient in India, is provided by a service provi....
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....rvice". Section 66A of the Finance Act, 1994, provides that, in cases where service, provided by a provider located outside India, is received by a recipient in India, the service would be deemed to have been provided by the Indian recipient. (ix) Resultantly, the services received in India, by the appellant, from the service providers located outside India, were deemed to be output services, provided in India, for which the appellant was the deemed service provider. (x) In this scenario, Service Tax, on such services, was payable by utilisation of Cenvat credit, by virtue of Rule 3(4) of the Cenvat Credit Rules. 24. We may also observe, in this context, that this issue has engaged the attention of various High Courts from time to time, including, inter alia, the High Court of Rajasthan in U.O.I. v. Kansara Modlers Ltd. - 2018 (15) G.S.T.L. 255 (Raj.), the High Court of Karnataka in CST v. Aravind Fashions Ltd. - 2012 (25) S.T.R. 583 (Kar.) [SLP (C) Diary No. 23369/2018, preferred against which, has also been dismissed by the Supreme Court on 3rd August, 2018] [2019 (18) G.S.T.L. J36 (S.C.)], the High Court of Punjab and Haryana in C.C.E. v. Nahar Industrial En....
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....sessee for utilization of Cenvat credit for payment of service tax under reverse charge mechanism. 27. In view of the above, keeping in view the statutory provisions and judicial pronouncements as referred to hereinabove, it is clear that the argument of revenue for confirming the demand cannot sustain in law. 28. As regard the 3rd issue regarding denial of Cenvat Credit pertaining to other premises/ branch offices of the Appellant we find that in the present matter Ld. Commissioner allowed the Cenvat credit of input services received by the Regional /branch offices only with effect from 29.03.2004 and accordingly has denied the Cenvat Credit of Rs. 6,32,118/- out of demand of Rs. 90,45,338/-. The Ld. Commissioner held as under:- "28.7 From the above it is clear the as per sub-rule (2) of Rule 4 of the Service tax Rule, 1994, the assessee has an option to register the premises or offices from where such centralized billing or centralized accounting system are located. In the instant case, the assessee vide their letter dated 29.03.2004 has informed the department that they have adopted centralized billing and accounting system at Gandhinagar in respect of all branche....