M/S. Sterlite Industries (I) Ltd vs Commissioner Of Central Excise, ...
- CitationAppeal No.TNL-CEX-000-APP066-12, dated 16.10.2012 passed by the Commissioner of Central
Ratio decidendi
The rule this decision rests on
Where a service provider's invoices for similar services have been reversed by credit notes, the department cannot require the recipient to reverse the Cenvat credit on those services without recording cogent reasons for such reversal; absent any material showing the services were irrelevant to the business, no enquiry was made as to whether the tax collected reached the Treasury, and no finding that the insurance was unrelated to the operation and maintenance of the captive power plant, the credit is admissible. Where the assessee contends that sufficient credit stood in its record and that the credit was not utilised, interest on the amount reversed is to be determined on verification of that fact; if the credit was merely recorded in the RG-23 register and not utilised, no interest is leviable on the amount reversed. A penalty imposed on the amount reversed is set aside where the reversal itself is not justified on the facts and circumstances found.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.TNL-CEX-000-APP066-12, dated 16.10.2012 passed by the Commissioner of Central Excise (Appeals), Madurai]
M/s. STERLITE INDUSTRIES (I) LTD. APPELLANT
Versus
COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI RESPONDENT
Appearance:
For the Appellant Shri M. Kannan, Adv.
For the Respondent Shri R. Subramaniyan, AC (AR)
CORAM:
Honble Shri D.N. Panda, Judicial Member
Date of hearing/decision 01-10-2015
FINAL ORDER NO. 41321 / 2015
The question involved in this appeal is whether service tax (inclusive of cess) paid by the appellant towards cost of insurance covered in the cost of Maintenance Service provided by "M/s. Wartsila India Ltd." entitles it to the Cenvat credit of the service tax so paid. The conclusion of the authorities below was that, when the cost of services of similar nature was billed in invoices by the same provider vide no.(i) AGR 10622/O&M/0002/2006, dated 23.01.2006 and (ii) AGR 10827/O&M/0001/2006, dated 26.12.2005 was reversed by the appellant, on the basis of two Credit Notes issued by the said service provider appellant was liable to reverse the credit of Rs.43,779/- without recording any cogent reason warranting such reversal. Revenue merely supports adjudication.
2. There is no material on record to suggest that reversal is warranted when availing of service was not found to be irrelevant. There was no enquiry conducted by Revenue to ascertain whether the service tax of the above amount collected from the appellant has not gone to Treasury. There is also no finding on record to show that insurance was not related to operation and maintenance of the captive power plant of the appellant by the service provider Therefore, appeal is allowed.
3. Learned counsel further submits that interest has been levied on the two invoices as aforesaid while there was reversal of credit. Appellant had sufficient credit on its record.
4. Subject to verification of the sufficiency of the credit on record, levy of interest shall be judged since the credit is claimed to have been not utilised. If the authority finds that the credit was not utilised but merely recorded in RG-23 register, there shall not be levy of interest on the amount reversed.
5. The last submission is that waiver of penalty of Rs.43,799/- would be justified on the facts aned circumstance aforesaid. Prayer is justified for the reasons stated as above. Therefore, Appeal is allowed on that count and there shall be no such penalty. (Dictated and pronounced in open court)
(D.N. PANDA) JUDICIAL MEMBER
ksr 05-10-2015
DRAFT Remarks
I II III
Date of dictation 01.10.2015
Draft Order - Date of typing 05.10.2015
Fair Order Typing 07.10.2015
Date of number and date of dispatch 08/10/2015
4 ST/40200/2013
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