C.C.& C.E. & S.T. Noida vs M/S. Delphi Systems (P) Ltd

[Arising out of Order-In-Appeal No. I/EXCUS/000/APPL/66/14 dated 21.03.2014 passed by Commissioner (Appeals) Noida]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.& C.E. & S.T. Noida ...Appellant

Vs.

M/s. Delphi Systems (P) Ltd Respondent

Appearance:

Mr. M.S. Negi, DR for the Appellants

None appeared for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing.19.06.2015

Final Order No. 53250/2015_

Per S.K. Mohanty:

The Revenue is in appeal against the impugned order dated 21.03.2014 passed by the Commissioner (Appeals), Customs and Central Excise, Noida.

2. The brief facts of the case are that the Respondent is a manufacturer of Motor vehicle and AC parts and avails cenvat credit of the duties and taxes paid on the inputs, input services and capital goods, used in, or in relation to manufacture of the said final products. During the disputed period, credit taken by the respondent on the strength of supplementary invoices issued by M/s Krishna & Co. for providing the input services was denied by the Jurisdictional Central Excise Authorities on the ground that the said service provider had deposited the differential amount of service tax upon adjudication of the dispute involving fraud, collusion suppression etc. In appeal, the Commissioner (Appeals) vide the impugned order has set aside the adjudication order placing reliance on the decision of this Bench of the Tribunal in the case of the Respondent itself vide Final Order No. 57806-57807/2013 dated 25.09.2013. Hence, this present appeal before this Tribunal.

3. Shri M.S. Negi, the Ld. DR appearing for the appellant submits that clause (bb) of Rule 9(1) of the Cenvat Credit Rules, 2004 prohibits taking of Cenvat credit by the recipient of service on the strength of supplementary invoice, where the service provider has paid the service tax owing to fraud, collusion, mis-statement of facts etc. According to the ld. DR, since the service provider M/s Krishna & Co. had paid the service tax after adjudication of the dispute involving the above ingredients, transfer of such tax amount through the supplementary invoice to the respondent will not be available as Cenvat credit. He further submits that the decision of the Tribunal cited in the impugned order was challenged by the Revenue before the Honble Allahabad High Court, which is still pending for disposal.

4. Clause (bb) in Rule 9(1) was inserted w.e.f. 01.04.2011 vide Notification No. 13/2011-C.E. (NT), dated 31.03.2011. In the said notification, there is no mention that the clause (bb) placed in the said rule will have the retrospective application. In absence of any specific mention regarding the applicability of the provisions of the said clause retrospectively, the date when the notification was published in the official gazette i.e. on 31.3.2011, should be considered as the date of effect of the said notification. Since, the Cenvat credit pertains to the period June to September 2008, which is much before the date of insertion of sub clause (bb) in Rule 9(1) of the rules, the embargo created in the said newly inserted rule will have no application and the cenvat credit cannot be denied to the Respondent. I find that this Bench of the Tribunal in the case of the Respondent itself (supra) has taken the same view. Therefore, I am of the opinion that there is no infirmity in the impugned order passed by the Ld. Commissioner (Appeals).

5. With regard to the submissions of Revenue that appeal filed against the order No. 57806-57807-2013, dated 25.09.2013 passed in the case of the Respondent is pending before the Honble High Court and accordingly, the said decision cannot relied on for arriving at the conclusion that the newly inserted clause (bb) in Rule 9 will not have the retrospective application, I find that operation of the said final order of Tribunal has so far not been stayed by the Honble High Court. In absence of stay of operation of the said order, the principle decided therein shall apply to the case in hand.

6. In view of above, I do not find any merits in the appeal filed by Revenue, and thus, the same is dismissed.

(Dictated and pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

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