M/S Hari Orgochem Pvt.Ltd vs Commissioner, Central Excise & Service ...
- CitationAppeal No.E/10816/2013-SM
Ratio decidendi
The rule this decision rests on
Where conflicting views of the Tribunal on the admissibility of CENVAT credit on an item existed and were later resolved by a Larger Bench, the assessee cannot be said to have intended to evade tax or to have taken credit wrongly, so the extended period of limitation is not available and a demand for the period before the amendment of the relevant definition is time-barred. Following the jurisdictional High Court's view that such credit was admissible before the amendment of Rule 2(k) with effect from 07.07.2009, the demand for the pre-amendment period is set aside on merits as well. Where the assessee has reversed the credit, together with interest, for the post-amendment period, no further demand survives for that period, and a penalty imposed in such circumstances is set aside.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Appeal No.E/10816/2013-SM [Arising out of OIA No.PJ/456/VDR-I/2012-13, dt.25.02.2013, passed by Commissioner (Appeals), Central Excise & Customs, Vadodara]
M/s Hari Orgochem Pvt.Ltd. Appellant
Vs
Commissioner, Central Excise & Service Tax, Vadodara-I Respondent
Represented by:
For Appellant: Shri S.R. Dixit, Advocate For Respondent: Shri G. Jha, Authorised Representative
For approval and signature:
Honble Mr. H.K. Thakur, Member (Technical)
1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE MR. H.K. THAKUR, MEMBER (TECHNICAL)
Date of Hearing/Decision:16.07.2015
Order No. A/11015/2015, dt.16.07.2015
Per: H.K. Thakur
This appeal has been filed by the Appellant with respect to OIA No. PJ/456/VDR-I/2012-13, dt.25.02.2013. The issue involved is regarding taking of CENVAT Credit on items like Cement, Angles, Channels etc used in making the foundation work and support structures for the machinery in the factory of the Appellant.
2. Shri S.R. Dixit (Advocate) appearing on behalf of the Appellant argued that the period involved in these proceeding is from May 2006 to 2009-10. That before the amendment of CENVAT Credit Rules, 2004 i.e. w.e.f. 07.07.2009, the definition of Inputs was not restricting credit on the items involved in these proceedings. That the issue of admissibility of credit was finally decided by the Larger Bench in the case of Vandana Global Ltd Vs CCE Raipur [2010-TIOL-624-CESTAT-DEL-LB] when conflicting views held the field. It was his case that once conflicting views were existing on the admissibility of CENVAT Credit on these items, then the extended period of 5 years cannot be invoked for demanding credit reversal pertaining to the period prior to 07.07.2009 when the amendment to CENVAT Credit Rules, 2004 took place. That in the year 2015, Hon'ble Gujarat High Court in the case of Mundra Port & Special Economic Zone Ltd Vs CCE & C 2015-TIOL-1288-HC-AHM-ST has also held that the CENVAT Credit on Steel and Cement used for construction of jetty for providing Port service/Cargo Handling services is admissible.
3. Shri Govind Jha (AR) appearing on behalf of the Revenue argued that some part of the demand has been issued for the period when amended definition of Rule 2(k) of CENVAT Credit Rules, 2004 was existing. Therefore, credit taken after 07.07.2009 will not be admissible as the provisions on the issue was very clear.
4. Shri S.R. Dixit (Advocate) as a counter to the argument made by the learned Authorised Representative submitted that entire CENVAT Credit for the period after 07.07.2009 with respect to disputed items has been reversed by the Appellant and that no penalty is attracted.
5. Heard both the sides and perused the case records. The issue involved in the present appeal is whether the CENVAT Credit of items like Cement, Angles, Channels etc used for civil foundation work and support structure of the machinery will be admissible or not. It is observed that the issue of admissibility of CENVAT Credit on these items was decided by CESTAT Larger Bench in the case of Vandana Global Ltd Vs CCE Raipur (supra). Once conflicting views were given by the Court on the issue and the issue got resolved by the Larger Bench, then it cannot be said that there was any intention to evade payment of taxes or in taking wrong credit. Accordingly, demand for the period prior to amendment of Rule 2(k) of CENVAT Credit Rules, 2004 has to be considered as time barred. On merit also, the jurisdictional High Court in the case of Mundra Port & Special Economic Zone Ltd Vs CCE & C (supra) held that such credit is admissible before amendment of Rule 2(k) w.e.f. 07.07.2009. Appeal filed by the Appellant with respect to CENVAT Credit of demand for the period prior to the amendment of Rule 2(k) of CENVAT Credit Rules, 2004 is allowed.
6. So far as the demand for the period after amendment is concerned, the Appellant had reversed the CENVAT Credit alongwith interest. Appeal filed by the Appellant is, therefore, allowed to the extent discussed hereinabove and also to the extent that penalty imposed upon the Appellant is set aside.
(Dictated and pronounced in Court)
(H.K. Thakur) Member (Technical)
cbb
4
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free