2024 (10) TMI 287

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....he Act, 1944') along with interest under Rule 14 of the CCR, 2004 read with Section 11AB of the Act, 1944 and imposed equivalent penalty of Rs.1,46,18,691/- (Rs.1,19,66,923/- + Rs.26,51,768/-) under Rule 15(2) and Rule 15(1) of the CCR, 2004 read with Section 11AC of the Act. Penalty of Rs.50,000/- under Rule 26(1) of the Central Excise Rules, 2002 was also imposed on Shri R. K. Gupta, Manager Excise (appellant no.2). Since both the appeals are arising out of a common impugned order, therefore, both the appeals are taken up together for discussion and decision. 2.1 Briefly stated facts of the present case are that the appellant no.1, M/s Good Year India Ltd, is engaged in the manufacture of tyres and has depots at various locations across the country. The appellant availed the Cenvat Credit of the duty paid on inputs and capital goods and service tax paid on various input services during the relevant period. 2.2 Audit of the appellant was conducted and consequent to the audit, show cause notices dated 07.01.2011 and 21.07.2011 were issued to the appellant on the allegation that the appellant has wrongfully availed the Cenvat Credit of service tax paid on the services of Clearing ....

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....ngs on the same issue for the same assessee. In this regard, she relies on the following cases. Commissioner of Central Excise Pune-II vs. SS Engineers vide Order dt. 07.07.2023 (SC) in Civil Appeal No. 5700 of 2019 Rosmerta Technologies Ltd. vs. Comm. of Central Excise - 2020-TIOL-916-CESTAT-CHD affirmed by Supreme Court vide order dt. 10.07.2023 in Civil Appeal No. 177 of 2021 SRF Ltd. vs. Commissioner of CE & ST - 2021-TIOL-523- CESTAT-DEL Carrier Air Conditioning and Refrigeration Ltd vs. Commissioner of Central Excise, Delhi-III vide Final Order Nos. 60098-60099/2023 dated 18.042023 in Excise Appeal Nos. 2929-2023 of 2009. 4.3 She further submits that the appellant has correctly availed the Cenvat Credit on input services as the services received by the appellant are 'input services' and the same were used in relation to the manufacture of final products and clearance of the final products from/upto the place of removal. She further submits that the inclusive part of the definition of 'input services' as provided under Rule 2(l) of the CCR, 2004, specifically covers the activities related to business i.e. any service in relation to business of manufacturing of final p....

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....4.5 As regards Rent of Bungalow, the ld. Counsel submits that Bungalow rent is paid by the appellant for stay of the employees/ management people for carrying out the production in times of an emergency or when there is an immediate requirement. She further submits that these expenses are commercially expedient for effective running of business. In this regard, she relies on the following cases: Commissioner of Central Excise, Trichy Vus Madras Cements Ltd. - 2019 (370) E.L.T. 568 (Tri. - Chennai) ITC Ltd. Vs Commissioner of Central Excise, Hyderabad - 2010 (17) S.T.R. 146 (Tri. - Bang.) affirmed by Andhra Pradesh High Court in 2013 (32) S.T.R. 288 (A.P.) 4.6 As regards Rent of Office/Godown after sale, the ld. Counsel submits that godown rent is paid by the appellant, when godowns are used for storage of manufactured products and sale thereof by C&F Agents as per the directions of the appellant. The godowns are integral for storage of goods dispatched from the factory of the appellant and thus are indirectly used in relation to manufacturing of the final products. For this submission, reliance is placed on the following cases: Barmalt (India) Pvt. Ltd. Vs Commissioner of C.....

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....t of Cenvat Credit of tax paid on input services. Therefore, extended period in such a case cannot be invoked. In this regard, she relies on the following case: GD Goenka Private Limited vs Commissioner of CGST, Delhi South [ST/51787/2022, order dated 21.08.2022] 4.10 As regards interest and penalties, the ld. Counsel submits that when the demand of Cenvat Credit is unsustainable, the questions of interest and penalties do not arise. 5. On the other hand, the learned Authorized Representative for the department has filed the written submissions which are taken on record and also relied on the following decisions: a) CCE, Mumbai-III vs. EMCO Ltd - 2015 (322) ELT 394 (SC) b) Mahle Engine Components India Pvt Ltd vs. CCE, Indore - 2017 (51) STR 44 (Tri. Del.) c) Manikgarh Cement vs. CCE, Nagpur - 2018 (14) GSTL 263 (Tri. Mumbai) d) Bengal Iron Corporation vs. Commercial Tax Officer - 1993 (66) ELT 13 (SC) e) Elson Machines Pvt Ltd vs. Collector of CE - 1988 (38) ELT 571 (SC) f) State of Gujarat vs. Arcelor Mittal Nippon Steel India Ltd - 2022 (379) ELT 418 (SC) g) IFB Industries Ltd vs. CCE & ST, Bangalore-I - 2017 (4) GSTL 366 (Tri. Bang.) h) CCE vs. Gujarat Heavy....