M/S Beekay Engineering Corporation vs Cce, Raipur
- CitationService Tax Appeal No. 443 of 2009
Ratio decidendi
The rule this decision rests on
A manufacturer or service provider that has availed cenvat credit on input services, but has subsequently reversed the proportionate credit together with interest, does not thereby lose eligibility for the 67% abatement under Notification No. 15/2004-ST, 19/2005-ST and 1/2006-ST; reversal of credit is to be treated as non-taking of the credit, so that the abatement benefit cannot be denied on the ground of prior availment of credit. Where the credit taken on inputs was never utilised because the assessee ceased to remain within the excise net and the credit lapsed, the rule that credit availment bars the abatement does not apply on those facts, and a decision founded on such facts is distinguishable.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?
2 Whether it should be released under Rule 26 of 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?
Service Tax Appeal No. 443 of 2009
(Arising out of order-in-original No. Commissioner/RPR/21/2009 dated 03.03.2009 passed by the Commissioner of Customs & Central Excise, Raipur).
M/s Beekay Engineering Corporation Appellant
Vs.
CCE, Raipur Respondent
Appearance:
Sh. Yogendra Adlak, Advocate for the appellant-assessee
Sh. Amresh Jain, DR for the Revenue
Coram:
Honble Mr. Justice G. Raghuram, President
Honble Mr. R. K. Singh, Member (Technical)
Final Order No. 53099 / 2015
Per: R. K. Singh:
Appeal has been filed against order-in-original dated 03.03.2009 in terms of which service tax demand of Rs. 92,27,535/- covering the period 01.04.2006 to 30.04.2007 was confirmed alongwith interest and penalties on the ground that the appellant was not eligible for 67% abatement claimed by it under Notification No. 15/2004-ST, 19/2005-ST and 1/2006-ST because it had taken cenvat credit paid on various input services. The appellant has contended that it has reversed proportionate cenvat credit and interest and therefore in view of the Allahabad High Court judgement in Hello Minerals Water (P) Ltd. vs. Union of India 2004 (174) ELT 422 (All.) it was entitled to the benefit of abatement. It also cited the judgment of CST, Ahmedabad vs. Amola Holdings Pvt. Ltd.- 2009 (16) STR 46 (Tri. Ahmd.).
2. Ld. DR for Revenue on the other hand stated that once credit was taken it was not entitled to the benefit of 67% abatement regardless of whether the same was reversed subsequently and cited the judgment of Bombay High Court in the case of CCE-Mumbai-IV vs. Dilip Chhabaria Designs Pvt. 2015-TIOL-851-HC-MUM-CX.
3. We have considered the contentions of both sides. We find that in the case of Hello Minerals Water (supra) it was held in the context of Notification No. 15/94-CE that the reversal of modvat credit amounted to non taking of credit inputs. The said judgment has been followed in the case of Amola Holdings (supra). As regards the judgment of Bombay High Court in the case of Dilip Chhabaria Designs (supra) it is to state that in that case the credit was taken on duty paid on chassis and other inputs which was not utilised since the same lapsed due to the assessee no longer remaining under the Excise net. Thus, that judgment was dealing with rather different set of facts. We find that this issue has been analysed in detail by CESTAT in the case of Punj Lloyd vide order No. 52285/2015 dated 28.04.2015 where also it has been held that the said ratio of the judgment of Allahabad High Court in the case of Hello Minerals (supra) continues to be applicable on the subject and the ratio stands confirmed by Supreme Court in the case of Sonalac Paints and Coatings Ltd. vs. CCE 2015-TIOL-77-SC-CX.
4. In the light of the aforesaid analyses, we hold the impugned demand to be unsustainable. Therefore, the impugned order is set aside and the appeal allowed.
(Justice G. Raghuram)
President
(R. K. Singh)
Member (Technical)
Pant
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