Skf India Ltd vs Commissioner Of Central Excise, Pune I
- CitationAppeal No. E/55/11
Ratio decidendi
The rule this decision rests on
The amount recovered by an assessee from its employees towards a cab-operator service, where it is not shown to exceed the sum on which Cenvat credit was availed, is to be treated as inclusive of service tax, so that the demand for reversal of credit is correspondingly reduced. Where an assessee has availed Cenvat credit on the full amount of an input service and later reverses it only because a part of the amount was recovered from employees, the case is distinguishable from one where credit is taken before receipt of goods and reversed at once on discovery of the mistake, and interest is payable on the credit wrongly availed in accordance with the Supreme Court's decision in Indo-Swift Laboratories Ltd. Where the assessee has not declared that part of the amount was being recovered from its employees and the fact came to light only during investigation, there is suppression of fact, and the extended period of limitation is correctly invoked for reversal of the credit for the entire period. Where the dispute turns on the interpretation of the statute and the Tribunal has taken a view on the issue in other cases, including a larger bench decision, penalty is not to be imposed, and the penalty is accordingly set aside.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out Order-in-Appeal No. PI/RKS/219/2010 dated 04.11.2010 passed by the Commissioner of Central Excise (Appeals), Pune I)
For approval and signature: Honble Mr. P.K. Jain, Member (Technical)
1. Whether Press Reporters may be allowed to see No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Yes of the Order?
4. Whether Order is to be circulated to the Departmental Yes authorities?
SKF India Ltd. Appellant
Vs.
Commissioner of Central Excise, Pune I Respondent
Appearance:
Shri Archit Agarwal, CA for the appellant Shri Ashutosh Nath, AC (AR) for the respondent
CORAM:
Honble Mr. P.K. Jain, Member (Technical)
Date of hearing : 30.01.2015 Date of decision : 16.02.2015
O R D E R No:..
Per: P.K. Jain:
The brief facts of the case are that during the period Jan 2009 to December 2009 the appellant availed Cenvat credit of input services paid on cab operator service. Later on, it was found that a part of the amount was being recovered by the appellant from its employees. Accordingly, revenue issued a demand notice for recovering the Cenvat credit corresponding to the amount recovered from the employees.
2. The ld. counsel for the appellant is not disputing the issue on merits. However, his first contention is that the amount recovered by the appellant be treated as inclusive of service tax in view of the Hon'ble Supreme Court decision in the case of Maruti Udyog Ltd. 2002 (141) ELT 3 (SC) and similar view taken by the Tribunal in respect of service tax matters in many cases. Ld. counsel for the appellant has stated that if the said contention is accepted, then the demand will come down from `72,661/- to `65,633/-. The other contention is that the interest liability does not arise as the appellant had sufficient balance. Yet, another contention is that the extended period of limitation is not invocable. It is seen that the show-cause notice was issued on 12.03.2010, thus a part of the demand is beyond the period of limitation and in this context ld. counsel relies upon the CESTAT decision in the case of GTC Inds. Ltd. 2008 (12) STR 468 and some other judgements. It is also submitted that penalty cannot be imposed as issue relates to interpretation of the statute. It is also submitted that the appellant has reversed the entire amount of `72,661/- vide debit entry no. 32 dated 25.10.2011 and again reversed `58,023/- by debit entry no. 57 dated 19.03.2012 towards pre-deposit of duty and penalty, considering the amount within the normal period of limitation.
3. Ld. AR reiterates the finding in the impugned order.
4. I have considered the submissions of both sides. Appellants are not disputing the fact that on merits they are required to reverse the Cenvat credit corresponding to the amount recovered from their employees. The first contention is that the amount recovered must be treated as inclusive of service tax. I agree with the said contention as appellant has not recovered any amount over and above the said amount.
5. The other contention of the appellant is that the interest liability does not arise as the appellant has sufficient balance and in support of the same, he has quoted the Hon'ble Karnataka High Court judgment in Bill Forge P. Ltd. 2012 (26) STR (Kar). I have gone through the said judgement. The facts of the case are very different. In the case before the Hon'ble High Court of Karnataka, appellant has taken the credit of duty paid on capital goods before their receipt and before utilising the same, they accepted their mistake and immediately reversed the credit. The facts in the present case are not same. In the present case, appellant availed the credit on the full amount and it was later on found that the part of the amount has been recovered from the employees. In view of this position, facts of the case are distinguishable and the decision of the Hon'ble Supreme Court in the case of Indo-Swift Laboratories Ltd. 2011 (265) ELT 3 (SC) would be applicable and the appellant would be liable to pay interest.
6. The other contention is that the extended period of limitation cannot be applied as the matter was referred to the Larger Bench. In my view there is a clear cut suppression of fact inasmuch as the appellant has not declared that a part of the amount was being recovered from the employees and it was only during the investigation that the same was found. Since there was a suppression of fact the extended period of limitation has been correctly invoked and the appellant is required to reverse the Cenvat credit for the entire duration.
7. Another contention is that the penalty cannot be levied as the issue relates to interpretation of statute. Keeping in view the nature of dispute and the view taken by the Tribunal in certain cases particular the larger bench decision in GTC Inds. Ltd., this is not a case where the penalty should be imposed. Accordingly, penalty is set aside. As far as the double payment of the disputed amount is concerned, the lower authority may check up the factual position if the amount has been debited by mistake twice. The second entry need to be re-credited.
8. Appeal is allowed in above terms.
(Pronounced in Court on )
(P.K. Jain) Member (Technical)
//SR
4
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