AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 1091
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....7.2019 Show Cause Notice No. 15/22/2015 dated 17.04.2017 No. 15/22/2015 dated 17.04.2017 No. 15/13/2015 dated 17.04.2017 No. 40/2017 dated 07.11.2017 Relevant Period August 2012 to December 2015 August 2012 to December 2015 August 2012 to December 2015 (SCN dated 17.04.2017) October 2015 to March 2017 (SCN dated 07.11.2017) Proposed Demand Rs.7,33,98,587/- Rs.7,33,98,587/- Rs. 1,70,24,846/- (in SCN dated 17.04.2017) Rs. 1,67,08,834/- (in SCN dated 07.11.2017) Confirmed Demand Rs.2,27,76,205/- Rs.45,26,888/- Entire demand confirmed 1.1 Facts in brief for the present adjudication are as follows: M/s. India Cements Limited and all its units/the appellants herein are engaged in the manufacture of cement and clinker. They are availing Cenvat credit of excise duty paid on the inputs, service tax paid on input services used in relation to the manufacture of cement and clinker and also of excise duty paid on capital goods. However, during the course of audit of the accounts of appellants conducted in December 2013 for the respective periods as mentioned in the above table, the department observed that the appellants have availed t....
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....d counsel has laid reliance upon the decision of this Tribunal in the case of Hindustan Zinc Ltd. Vs. Commissioner of CGST, Udaipur reported in 2019 (370) E.L.T. 1582 (Tri.-Del.). 3.1 While submitting on the merits, learned counsel has mentioned that violation of Rule 7 of CCR, 2004 has wrongly been held as the provision gives an option to the assessee whether to distribute input services tax available to it amongst its other manufacturing units which are providing output services also. It is evident from the use of word "may distribute the Cenvat credit" as found in Rule 7 both prior and also post its amendment in 2012. The distribution was made mandatory only w.e.f. 01.04.2016 i.e. after the period in question. Learned counsel has relied upon the decision of Hon'ble Bombay High Court in the case of The Commissioner, Central Tax Pune-I Commissionerate Vs. M/s. Oerlikon Balzers Coating India P. Ltd. reported in 2018- TIOL-2688-HC-MUM-CX. 3.2 It is further submitted that Cenvat credit is a substantial benefit which cannot be denied on ground of procedural lapses especially when the entire demand is revenue neutral. Learned counsel has relied upon the decision of this Tribunal ....
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....n reported to have 9(Nine) manufacturing units and 6(six) service units. During the relevant period, the appellant has the credit as was distributed by their ISD based on the quantity. The quantity basis is nowhere provided in Rule 7, hence, the quantity base Cenvat credit has rightly been held as irregular, the availment thereof has rightly been denied. Learned DR has further impressed upon that when the statute provides a particular procedure to be followed the same has to be followed. Even the substantial benefit has to be denied when their occurs the procedural lapse. Learned DR has relied upon the decision of Hon'ble Apex Court in the case of Jagir Singh Vs. Ranbir Singh & Ans. Reported in AIR 1979 SC 381, wherein it was held that the provisions of an act of Parliament shall not be evaded by shift or contrivance. It was clarified what may not be done directly cannot be allowed to be done indirectly, that would be an evasion of the statute. 4.2 The plea of revenue neutrality has also been objected by learned DR by submitting that the concept of revenue neutrality is not derived from any statutory provision but it is a concept devised by the judicial forums and hence is appli....
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....ion of records by the department during the course of audit. Hence the extended period of limitation has rightly been invoked by the department. Learned DR has relied upon the decision of Chemfab Alkalis Ltd. Vs. CCE, Pondicherry, reported in 2010 (251) E.L.T 264 (Tri.- Chennai). The appellants herein have failed to follow the procedure under Rule 7(d) of CCR, 2004. They neither informed the department nor sought any advice from the department as to the manner of distribution of Cenvat credit in terms of the said rule. The plea of bona fide belief is therefore not acceptable. Hence, the Cenvat credit is rightly held to have been irregularly distributed by the ISD and wrongly utilized by the appellant. The recovery thereof along with the interest and the consequential penalties is very much in compliance of the statute. Impressing upon no infirmity in the order, three of the appeals are prayed to be dismissed. 5. Having heard the rival contentions and perusing the entire records. 6. We observe that the orders of adjudicating authorities below confirming recovery of Cenvat credit availed by the appellants upholding the alleged violation of Rule 7 of CCR, 2004 has not mere....
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.... 7. We observe that Hon'ble Apex Court in the case of Tamil Nadu Housing Board Vs. Collector of Central Excise, Madras, reported in 1994 (74) E.L.T. 9 (SC), while relying upon its earlier decision in the case reported as 1989 (43) E.L.T. 195 (SC) has held that to invoke Section 11A of Central Excise Act, 1944, the law requires an intention to evade payment of duty. Hence, it has to be not a mere failure to pay the same rather it has to be something more than that. It was clarified that the assessee must be aware that the duty was leviable and it must deliberately avoid paying it. The Hon'ble Apex Court further explained that the word "evade" in the context to mean 'defeating the provision of law of paying duty.' It is made more stringent by use of the word "intent". In its another decision in the case of Pushpam Pharmaceuticals Company Vs. Collector of C.Ex., Bombay, reported in 1995 (78) E.L.T. 401 (S.C.), it was also held that a perusal of proviso to Section 11A indicates that the expression "Suppression of fact" has been used in company of such strong words as fraud, collusion or willful default. In fact it is the mildest expression used in the proviso. Yet the surroundings in ....
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....documents as that of ISD invoices and the copies of ER-1 returns were provided to the audit team itself. (iii) Appellants were regular in filing their ER-1 returns mentioning all details of the amount availed by them as Cenvat credit, consequent of being distributed by their ISD. (iv) The services for which the Cenvat credit was distributed by the ISD have all being the eligible input services. (v) In maximum cases/invoices, the credit was distributed as per the eligibility of the service rendered i.e. either on the basis of unit specific or on the basis of turnover. Except that in few of the statements by ISD invoices in one of the columns, the credit was distributed by specifying turnover as "quantity based" and in some other it was on "allocation weight". We observe in terms of Circular No. 178/4/2004-S.T. dated 11.07.2014 as relied upon by the department, the distribution as per allocation weight is also based on turnover, hence, apparently such distribution is also in compliance of Rule 7(d) of CCR, 2004. 10. All these admissions when seen in the light of above discussed law on the ground of limitation, we hold that there is no willful intent o....
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....e Apex Court again held that when the services are such as being available as credit for discharging tax on other services, the entire issue is revenue neutral, hence, the demand and consequential interest and penalty is not sustainable. This Tribunal also in the case of Rajasthan Patrika Pvt. Ltd. Vs. Commissioner of C. Ex. & CGST, Jaipur reported in 2020 (34) G.S.T.L. 226 (Tri.-Del.) has dealt with the issue of confirming the demand for wrongfully availed Cenvat credit on the ground that the issue is revenue neutral. Hence, we hold that question of confirmation of that leftover portion of demand gets hit by the principle of revenue neutrality. 14. We further observe that alleged violation of Rule 7 of CCR, 2004, in the given facts and circumstances, is nothing more than the procedural lapse. We rely upon the decision of Hon'ble High Court Gujarat in the case of Commissioner of Central Excise Vs. Dashion Ltd. reported in 2016 (41) S.T.R. 884 (Guj.) wherein it is held that when the invoices for input services are not disputed by the Revenue, the availment of Cenvat credit by the unit of an ISD Distributor cannot be denied on the ground that the service was availed by some other ....
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....t credit of Rs. 1,07,07,142/- with interest and penalty equal to the same imposed under Section 11AC of Central Excise Act, 1944 are setaside." The procedural irregularities are held to be ignored when there is no apparent loss to the revenue nor any apparent benefit to the assessee. 15. We finally observe that there is no dispute of receipt of services, eligibility of services for credit nor any dispute that the invoices are raised by the ISD/Corporate Office of three of the appellants, which was eligible to distribute the credit to their units/factory. We further find that there is no proposal to issue any show cause notice to the said ISD for alleged wrong distribution of the credit. This situation has been dealt with by this Tribunal in the case of M/s. Indsil Energy Electro Chemicals (supra) as relied upon by the appellants. Following findings have been recorded: "When we look at the functions of the input service distributor and the documents to be issued by him for passing on the credit, it becomes quite clear that the document issued by him for passing on the credit does not contain the nature of service provided and the details of services. It contains the s....