2019 (2) TMI 1297 – CESTAT CHENNAI – TMI – CENVAT Credit – inputs, capital goods as well as input services relating to the electricity that is wheeled out to TNEB – extended period of limitation – Held that:- The Hon’ble Supreme Court in the case of Maruti Suzuki Ltd. [2009 (8) TMI 14 – SUPREME COURT] has held that the credit in respect of input services which is used for electricity that is sold outside is not eligible for credit. Applying this decision, the appellant does not have a case on merits.
–
Extended period of limitation – Held that:- The department has no case that the appellant had not disclosed the credit availed in their ER-1 returns. Further, the appellant has reversed the entire credit on 31.1.2011. All these would go to show that there was no intention to evade payment of duty or tax less any positive act of suppression on the part of the appellant – the department has miserably failed to establish with cogent evidence that the appellant is guilty of suppression
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
appellant herein. The electricity produced in the power division is used within the factory for manufacture of sugar and molasses and they are availing the credit of duty paid on capital goods, inputs and service tax paid on input services. On verification of records of the appellant, it was noticed that they had availed credit of service tax paid on input services as well as duty paid on capital goods and inputs used for generation of electricity in the power plant. Since electricity has been brought under the ambit of excisable goods with effect from February 2005 and there is no duty prescribed on electricity, department was of the view that the appellants are not eligible to avail credit of inputs, capital goods as well as input services relating to the electricity that is wheeled out to TNEB. Show cause notices were issued proposing to demand service tax of ₹ 35,56,421/- along with interest and also for imposing penalties. After due process of law, the original authority co
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
lecting the credit availed in such returns. That therefore they had not suppressed any fact from the department. Further, on 24.3.2006, consequent to the amalgamation, the appellant had intimated the department regarding the revised factory plan and availment of credit of capital goods and inputs. This itself would show that the appellant had no intention to evade payment of duty or tax. It is also submitted by her that the issue whether credit is eligible on the inputs, input services used for manufacture of electricity that is sold was under litigation and contentious for long period. There were decisions in favour of the appellant as well as the Revenue. She adverted to the decision of the Tribunal in Final Order No. 42083/2018 dated 20.7.2018 in the case of M/s. Sri Kannapiran Mills Ltd. and submitted that the Tribunal in the said case has taken note of the submissions made by the appellant therein that there are two contrary decisions on the very same issue of availing credit on i
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Vs. Collector of Central Excise, Bombay – 1995 (75) ELT 721 (SC) to argue that the words suppression being qualified by immediately preceding words willful some positive act has to be established by the department to invoke the extended period. The decision in the case of Ultra Tech Cement Ltd. Vs. Commissioner of Central Excise, Bhavnagar – 2010 (262) ELT 432 (Tri. Ahmd.), was relied by the counsel to argue that when the issue is interpretational, the extended period cannot be invoked. 3. The ld. AR Ms. T. Usha Devi supported the findings in the impugned order. She argued that the appellant did not reverse the credit immediately on the decision of the Apex Court with regard to the ineligibility of credit. They had reversed the credit only on 31.1.2011 which is after almost nine months of issuance of show cause notice. From this, it is very much clear that the appellant had intentionally taken wrong credit and therefore is guilty of suppression of facts with intention to evade payment
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
para 6 of the impugned order, the Commissioner (Appeals) has noted as under:- 6. ………… Moreover, this disputed issue has been settled finally in favour of the department by the Hon ble Supreme Court in the case of Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi – III [2009 (240) ELT 641 (SC)]. As per their contention, when they had bonafide belief that the credit is admissible as held by decisions of various Tribunals, they could have very well reversed the credit upon the delivery of the said Hon ble Apex Court judgment, but failed to do so. Therefore, the department was left with no other option except to invoke the extended period under proviso to section 11A(1) of the Act which is duly justified. It is also pertinent to note that only after the issuance of SCN dt. 4.5.2010, they reversed the credit on 31.1.2011 i.e. after almost nine months. Thus, it is very clear that the appellant had intentionally taken the wrong credit and proviso to sec
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =