M/S. Saurashtra Cement Limited vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-103/2012-BVR-/SKS/COMMR-A-/AHD dated 31.10.2012, Passed by Commissioner (Appeals) Central Excise, & S.T., Bhavnagar)

M/s. Saurashtra Cement Limited : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Bhavnagar : Respondent (s)

Represented by :

For Appellant (s) : Shri S.R. Dixit, Advocate For Respondent (s) : Shri Alok Srivastava, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, Honble Member (Technical)

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

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

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

Yes

CORAM :

Mr. H.K. Thakur, Honble Member (Technical)

Date of Hearing / Decision : 10.06.2015

ORDER No. A/10787 / 2015 Dated 10.06.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant with respect to OIA No. OIA-103/2012-BVR-/SKS/COMMR-A-/AHD dated 31.10.2012. The issue involved in the present proceedings is whether CENVAT credit of service tax paid on Services of Guest House and Colony maintenance service is admissible to the appellant or not.

2. Learned Advocate Shri S.R. Dixit appearing on behalf of the appellant argued that on merits the issue was decided in favour of the assesses as per order dated 22.04.2009 passed by CESTAT Ahmedabad in the case of M/s. GHCL vs. CCE, Bhavnagar - [2009-TIOL-850-CESTAT-AHM]. It was argued by the learned Advocate that under this order, cenvat credit with respect to Security Services provided to Residential Colony was held to be admissible but the same was turned down by the Jurisdictional Honble Gujarat High Court as per case law reported as CCE & Cus vs. GHCL  [2011 (22) STR 610 (Guj.)]. Learned Advocate thus did not argue the case on merits but argued that as the issue of admissibility of cenvat credit with respect of Guest House and Colony maintenance services was disputable one and was settled only by the jurisdictional High Court in 2011, therefore, extended period is not invokable. It was his case that show cause notice was issued on 29.11.2011 for the period November 2006 to August 2011. That only demand for the period November 2010 to August 2011 will be covered within the period of limitation. It was also argued by the learned Advocate that no penalty is imposable as the issue of admissibility of cenvat credit on the services involved was disputable one and decided was by the Honble High Court in the year 2011.

3. Shri Alok Srivastava (AR) appearing on behalf of the Revenue argued that the case was detected during the course of audit conducted by the officers of the department and therefore, extended period will be applicable and penalty has been correctly imposed by the lower authorities.

4. Heard both sides and perused the case records. Appellant is not contesting the issue on merits but has contested the issue on time bar. It is the case of the appellant that the issue of admissibility of cenvat credit on the services availed on the Guest House and Colony maintenance services was only decided by the jurisdictional High Court in the case of CCE & Cus. vs. GHCL (supra) when the earlier decision passed by CESTAT Ahmedabad, in the case of GHCL vs. CCE, Bhavnagar (supra), was in their favour. It is observed that when an issue is disputable and a final view taken by this Bench was in favour of the assessee then appellant had a bonafide belief that cenvat credit was admissible of these services. Favourable view taken by CESTAT was reversed by Honble Gujarat High Court in the case of CCE & Cus, Bhavnagar vs. GHCE (supra) in 2011. Under this factual matrix extended period cannot be invoked and demand has to be restricted to the period within one year from the date of show cause notice. The amount involved within the period of one year should be worked out by the adjudicating authority and communicated to the appellant. The same should be paid by the appellant along with interest.

5. So far as imposition of penalty upon the appellant is concerned, no intention to evade duty can be attributed to the appellant when the issue of admissibility of cenvat credit on the amount of service was disputed. Accordingly, penalty imposed by the adjudicating authority under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 111AC of the Central Excise Act, 1944 is set-aside.

6. Appeal filed by the appellant is allowed to the extent indicated hereinabove with consequential relief, if any.

(Order dictated and pronounced in the Court)

(H.K. Thakur) Member (Technical) .KL

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