M/S Kesar Enterprises Ltd vs C.C.E., Meerut-Ii

(Arising out of OIA No. MRT-EXCUS-002-APP-29/14-15 dated 01.07.2014 passed by Commissioner (Appeals), CCE Meerut)

Date of Hearing: 03/7/2015

Date of Pronouncement: 10/07/2015

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

2. Whether it would 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 Department Authorities?

M/s Kesar Enterprises Ltd. Appellant

Vs.

C.C.E., Meerut-II Respondent

Appearance:

Present for the Appellant: Shri K. Vaish, C.A.

Present for the Respondent: Shri R.K. Grover, DR

Coram: Honble Smt.Sulekha Beevi C.S., Member (Judicial)

Final Order No.52154/2015

Per: Sulekha Beevi C.S.

This appeal is filed challenging the impugned order disallowing Cenvat credit.

2. The appellants are manufacturers of Sugar, Molasses, Denatured Spirit, Special Denatured Spirit, Carbon Dioxide etc. in the factory at Baheri. They are also availing Cenvat credit of service tax paid on input services. The appellants were issued show cause notice dated 29/11/2010 proposing to disallow Cenvat credit for the period April 2006 to March 2007 on various input services.

3. The Ld. Counsel appearing on behalf of the appellants challenged the impugned order both on limitation as well as on merits. The credit on insurance service (insurance of plant, machinery and finished goods except the), vehicle maintenance service, courier service and cell phone(mobile) services were denied. The impugned order was defended by the DR reiterating the findings therein.

4. The dispute relates to the period April 2006 to March 2007. The show cause notice is dated 29/11/2010. On behalf of the appellants it is submitted that the demand is time barred as there was no suppression of facts or willful mis-statement fraud or collision with intent to evade payment of service tax. That the Commissioner (Appeals) has held that there was no intention on the part of the appellants to evade payment of duty/avail wrongful credit, and has rightly set aside the penalty, observing that the issue involved in the case was regarding interpretation of the definition of input services under the Central Excise Act, 1944 and therefore the extended period of limitation is not invocable. On perusal of the impugned order it is seen that the Commissioner (Appeals) has found that the issue involved is more in the nature of interpretation of law, and the facts placed on record do not suggest any malafide intention on the part of the appellants in the matter of availment of credit of duty and therefore, the said provisions of rule 15 of the Cenvat credit rules, 2004 are not invocable in this case for the purpose of imposition of penalty. Taking note of the same the Commissioner (Appeals) has set aside the penalty imposed. This being the facts the appellants do have a strong case of limitation in their favour. On such grounds I am of the view, that the demand is barred by limitation and therefore is unsustainable.

5. As the question of limitation is answered in favor of the appellants, I do not think it necessary to enter into the substantial issue on merits.

6. In the result the demand raised in the impugned order is set aside as being time barred and unsustainable, with consequential relief, if any, to the appellants.

(Pronounced on 10/07/2015)

(Sulekha Beevi C.S.)

Member (Judicial)

K. Gupta

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