AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 260
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....value, b. I confirm the demand of Service Tax (including Education Cess and Secondary & Higher Education Cess) amounting to Rs. 2,42,596/- (Rupees Two Lakhs Forty. Two Thousand Five Hundred Ninety Six only) and order for its recovery under proviso to Section 73 (1) of the Finance Act, 1994 (as amended from time to time) for the reasons detailed here-in-above c. I confirm the demand of wrongly availed Cenvat Credit on capital goods amounting to Rs. 3,67,17,711/- (Rupees Three Crores Sixty Seven Lakhs Seventeen Thousand Seven Hundred Eleven only) availed by the party and order for its recovery under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73 (1) of the Finance Act, 1994. d. I disallow the input service credit availed on rent-a-cab operator services by the party amounting to Rs. 5,36,967/- (Rupees Five Lakhs Thirty Six Thousand Nine Hundred Sixty Seven only) and order for its recovery under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73 (1) of the Finance Act, 1994. e. I also confirm the demand of interest due on the aforesaid amounts and order for recovery of the same from the af....
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....Crores Sixty Seven Lakhs Seventeen Thousand Seven Hundred Eleven only) availed during the period from September, 2009 to November, 2013, in contravention to Rule 4 (2) and 9 (1) of the Cenvat Credit Rules should not be recovered under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73 (1) of the Finance Act, 1994. c. The Cenvat Credit availed on rent-a-cab operator (taxi) services during the year 2009-10, 2010-11 and 2011-12 total amounting to Rs. 5,36,967/- (Rupees Five Lakhs Thirty Six Thousand Nine Hundred Sixty Seven only) in contravention to Rule 2 (l) of Cenvat Credit Rules, 2004 should not be recovered under the provisions of Rule 14 of the Cenvat Credit Rules, 2004 read with Section 73 (1) of the Finance Act, 1994. d. Interest should not be demanded & recovered from them on the amounts demanded above under the provisions of Section 75 of chapter V of the Finance Act, 1994 read with Rule 14 of the Cenvat Credit Rules, 2004. e. Penalty should not be imposed upon them under Section 76 of the Finance Act 1994, for the failure to make the payment of Service Tax on the income earned from Renting of Immovable Property in pres....
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.... Rules, 2004. As such, since such Cenvat Credit was availed on the strength of improper and invalid documents in contravention of Rule 9 (1) of the Cenvat Credit Rules, 2004, the same was liable for recovery/reversal. Further, the department was also of the view that Interest was demandable from M/s BSNL for the excess availed Cenvat Credit in violation-of the provisions of Rule 4 (2) of the Cenvat Credit Rules, 2004 43b. The party, while denying such allegations has submitted that the department has not considered the fact that aforesaid capital goods were purchased by the CTSD, Meerut for SSA, Agra and these capital goods were used for providing telecommunication service. During that period, CTSD was not registered as First/ Second stage dealer with the Central Excise department. It should be noted that Cenvat Credit cannot be denied for procedural lapses once the receipt of goods and its use in providing the taxable services is not in dispute. In the instant case, department had denied the benefit of Cenvat Credit to them only on procedural & technical apse (unable to produce the original invoices at the time of inspection). There is no dispute that the party had not pr....
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....tal goods as such; (ii) an importer, (iii) an importer from his depot or from the premises of the consignment agent of the said importer if the said depot or the premises, as the case may be, is registered in terms of the provisions of Central Excise Rules, 2002; (iv) a first stage dealer or a second stage dealer, as the case may be, in terms of the provisions of Central Excise Rules, 2002; or (b) a supplementary invoice, issued by a manufacturer or importer of inputs or capital goods in terms of the provisions of Central Excise Rules, 2002 from his factory or depot or from the premises of the consignment agent of the said manufacture or importer or-from any other premises form where the goods are sold by, or on behalf of, the said manufacturer or importer, in case additional amount of excise duties or additional duty leviable under Section 3 of the Customs Tariff Act, has been paid, except where the additional amount of duty became recoverable from the manufacture or importer of inputs or capital goods on account of any non-levy or short-levy by reason of fraud, collusion or any willful misstatement or suppression of facts or contravention of an....
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....world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. They have also quoted the words of Lord Denning in this, which is as follows: "Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." Therefore, keeping the above observation in mind while deciding the case, I reiterate that the cases relied on by the party cannot be applied in their entirety to this case, as the facts are different from case to case. 43g Since the documents against which the Cenvat Credit has been availed by M/s BSNL are not the valid documents, as such, I am of the view that it is not merely a procedural lapse, but a gross of violation of the provisions as prescribed under Rule 9 (1) of the Cenvat Credit Rules, 2004. Th....
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.... of tax 43j. 43j. In this matter, I observe that there is no dispute that Cenvat Credit to the extent of only 50% was permissible in the Cenvat Credit Rules, 2004. Further, the party has also accepted that they had availed 100% Cenvat Credit of capital goods in the first year itself, but had not utilized the same for payment of Service Tax. Further, the admissibility of such credit to them was also undisputed. The sole issue here is that Interest has been demanded from the party for the excess availed Cenvat Credit in violation of the provisions of Rule 4 (2) of the Cenvat Credit Rules, 2004. I am of the opinion that it is a settled law that Interest is payable for the period during which excess of 50% was availed, as held in a plethora of citations. 43k. In the case of CCE Vs Vijay Tanks (2009) 235 ELT 107 CESTAT], it was held that Interest if assessee takes full credit - If assessee takes entire credit in an year (instead of 50%), Interest is payable for wrongly availed credit. Further, in the case of Guardian Plasticote Vs CCE [(2009) 241 ELT 149 CESTAT), it was held that even if 100% credit is taken, demand can only be for Interest for the period during which ....
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.... Final Order No. 1221/2008, dated 28-10-2008 [2009 (14) S.T.R., 699 (T)]. 4. Arguing for the assessee, the advocate submits that the assessee was having very many secondary switching areas. It was only natural that procurement was done centrally to get competitive bids and also for arranging logistics efficiently. From a commercial point of view, such an operational approach had to be followed and cannot be faulted as a method to take any unauthorized credit. The only procedural lapse was that procuring office did not get registered as dealer as per Rule 9 of Central Excise Rules, 2002 which is made applicable for the purpose of CCR, 2004. However, necessary documentation has been done inasmuch as the all the invoices against which procurements were made are available and also Transfer Advice has been communicated to the concerned office where credits were taken. He submits that this procedural lapse continued only till the year 2005 and once the department started raising objection on this count, they took registration and started following proper procedures. He submits that since the fact of procurement of capital goods is not disputed and the duty paid thereon also is n....
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.....S.T.L. 345 (Tri. - All.)] holding as follows: 5. At this stage, the ld. AR for Revenue, points out that the issue relates to taking of Cenvat credit of Rs. 21,93,606/- and the appellants before the authorities below, have shown the documentary evidences only in part and thus there remained discrepancy to be explained. 6. From the above, it is clear that the re-conciliation is not done before the Court below. Accordingly, I allow the appeal by way of remand setting aside the penalties and direct the adjudicating authority to pass a fresh order by following the decision of this Tribunal in the case of M/s. B.S.N.L. v. CCE : 2014 (34) S.T.R. 378 (Tri.-Chennai) (cited supra). I further direct the appellant to appear before the adjudicating authority within a period of 60 days from the date of receipt of a copy of this order along with supporting [documents] in their favour and seek opportunity of hearing. 4.5 This order was challenged by the revenue before Hon'ble High Court of Allahabad. Hon'ble High Court as reported at [2019 (366) E.L.T. 619 (All.)] decided the matter holding as follows: "7. The aforesaid Rule clearly lays down that the Cenvat credit s....
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....lity of the Cenvat Credit available to the assessee in terms of Rule 9 of the Rules after due verification of the documents produced before it and to pass a penalty order if necessary in accordance with law." 4.6 In para 43c of impugned order, specific finding to the effect that appellant had not produced the supporting documents which would evidence payment of duty. In view of the decision of Hon'ble High Court of Allahabad on the same issue in the case of Appellant's unit, we remand matter back on this issue to the original authority to re-determine the admissibility of CENVAT Credit on the strength of ATD in terms of this decision of Hon'ble High Court. 4.7 Adjudicating authority has referred to various decisions holding that the demand of interest in respect of the excess credit availed in first year itself in respect of the Capital Goods is justifiable. This finding has not been challenged by the appellant/ appellant counsel at any time before us. Thus we uphold the said finding recorded. However as the demand of the interest is completely linked with the admissibility of CENVAT Credit on the basis of the ATD, for which the matter is being remanded back to the original t....
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....appellant, Impugned order holds as follows: 45a. Now, coming to the issue of availment of Cenvat Credit by M/s BSNL, I observe the coming contention of the audit team was that as per Rule 2 (l) of Cenvat Credit Rules, 2004, input service excludes services specified in sub-clauses (d), (o), (zo), (kzzzz) of clause (105) of Section 65 of the Finance Act, in so far as they relate to motor vehicles, except when used for the provisions of taxable services for which the credit on motor vehicle is available as capital goods. In view of the above provisions, it was apparent that the hiring of the motor vehicles by the output service provider M/s BSNL is not construed as Input service, as the same has been excluded from the definition of Input service, and thus, such Cenvat credit availed for services of rent-a-cab were not covered under definition of input service under Rule 2 (l) of the Rules, ibid. Since, the activity of hiring of motor vehicles has been excluded from the definition of the Input services as such. the department was of the view that M/s BSNL were not entitled to avail the credit of Service Tax paid on the rented vehicles engaged for the taxi purposes. During the ....
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.... (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final `products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; But excludes services (A) specified in sub-clauses (p)(Architect Services), (zn)(Port Services), (zzI)(Port Services by other port), (zzm)(Services by Airport Authority etc.), (zzq) (Commercial and Industrial Construction Services), (zzzh) (Construction of Complex) and (zzzza)(Works Contract Services) of cla....
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....n to manufacture is a very wide term and covers all service inputs which have direct or indirect nexus with the manufacturing process. 45f. Further, on analyzing the second leg of the definition, which is commonly called 'includes portion, it is clear that services, which are specifically enumerated, are the activities which qualify as 'activities relating to manufacture and clearance of the finished goods' would fall within the purview of the definition of 'input service' provided it is received by the manufacturer of final products. Distinction between the services used in manufacture and service used in relation to' manufacture is too thin. However, it is to be seen from the above, whether 'Rent-A-Cab services' is in any way covered in the second part of the definition of the 'input service'; and for that we have to confirm if it relates either "directly or indirectly in or in relation to manufacture and clearance of final products. As per inclusive definition of 'input service', all services used for activities relating to various stages of manufacturing and clearances of finished articles such as rocurement of raw materi....
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....o business" had been deleted from the definition of "input service" from 1-4-2011 as the transportation of the employees was in relation to the manufacture of final product, such service was eligible for Cenvat credit. In support of his submissions the Learned Counsel for the appellant has placed reliance on the decisions in Tax Appeal No. 939/2015, decided on 9-12-2015 (Principal Commissioner v. M/s. Essar Oil Limited) [2016 (41) S.T.R. 389 (Guj.)], C.M.A. No. 157/2010 with connected matters (Commissioner of Central Excise and Service Tax v. M/s. Turbo Energy Ltd.) decided on 26-2-2015, C.C.E. and S.T., Mangalore v. Mangalore Refinery and Petrochemicals Ltd. - 2016 (42) S.T.R. 6. and Commissioner of Central Excise v. M/s. Stanzen Toyotetsu India (P) Ltd. - 2011 (23) S.T.R. 444 and submitted that on proper interpretation of the definition of the term "input service" it was clear that the appellant was entitled to seek Cenvat credit even after 1-4-2011. 4. Shri S.N. Bhattad, Learned Counsel for the respondent on the other hand submitted that the Authorities were justified in disallowing the Cenvat credit from 1-4-2011 onwards. According to him, input service was restricted ....
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....a) wherein food and beverages were provided by the appellant therein to its employees by engaging the services of an outdoor caterer. This was sought to be treated as "input service" since there was a statutory duty on the appellant to establish a canteen for its employees. Considering the effect of definition of "input service" after 1-4-2011 it was found that establishment of such canteen was primarily for personal use or consumption of the employees and after such amendment no Cenvat credit could be availed. This view has been upheld by the Hon'ble Supreme Court while dismissing the Special Leave Petition on 18-11-2021 preferred by the said appellant. The facts of the present case also indicate that the facility of transportation provided by the appellant to its employees was merely in the nature of service for personal use or consumption of its employees. 6. The decisions relied upon by the Learned Counsel for the appellant are clearly distinguishable. In M/s. Essar Oil Limited (supra) there was no dispute by the Department in that case that the services consumed by an assessee were related to various stages of its manufacturing and business activities. The same is not....