Custom, Excise & Service Tax Tribunal
M/S. Maini Materials Movement Pvt. Ltd vs The Commercial Of Central Excise on 16 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/799/2012-SM [Arising out of Order-in-Appeal No. MYS EXCUS 000-ADC APP HAB 063 - 2014 dated 20.06.2014 passed by Commissioner of Central Excise (Appeals), Mysore.] M/s. Maini Materials Movement Pvt. Ltd. Appellant(s) Versus The Commercial of Central Excise Bangalore-I Commissionerate Bangalore. KARNATAKA Respondent(s)
Appearance:
Shri Anirudha Nayak, Advocate For the Appellant Mr. Mohammed Yousuf, AR For the Respondent Date of Hearing: 29/11/2016 Date of Decision: 16/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21416 / 2016 Per : S.S GARG The present appeal is directed against the impugned order dated 28.12.2011 passed by the Commissioner (A) whereby the Commissioner (A) has set aside the impugned order to the extent of confirming reversal of CENVAT credit of Rs.15,140/- towards air travel services and Rs.14,004/- towards courier services and upheld the order to the extent of confirming the balance amount of Rs.2,15,105/- which has been reversed by the appellant and appropriated by the original authority. Penalty and interest has also been upheld.
2. Briefly the facts of the case is that the appellant is engaged in the manufacture of stacker and pallet truck falling under Chapter 84 and electric platform/tow truck falling under Chapter 87 of the CETA, 1985. The appellant availed CENVAT credit on various services viz., air travel service, courier service, rental service totaling to Rs.2,44,249/- which according to the Department is irregularly availed. Thereafter the appellant vide letter dated 30.7.2009 intimated the Department that they had reversed the amount of Rs.2,15,105/- during the month of June 2009 towards CENVAT credit of service tax paid towards rental charges. Thereafter a show-cause notice was issued proposing to deny the CENVAT credit on input services and vide Order-in-Original, the Assistant Commissioner confirmed the demand along with interest and penalty. Aggrieved by the said order, the appellant filed appeal before the Commissioner (A), who partially set aside the Order-in-Original with regard to the input services of air travel service and courier service and confirmed the demand on rental charges which was reversed by the appellant and appropriated by the Assistant Commissioner. Being aggrieved by the said order, the present appeal has been filed.
3. I have heard the learned counsel for the parties and perused the records.
4. The learned counsel for the appellant submitted that the appellant on being pointed out by the Department regarding the irregular availment of CENVAT credit with regard to rental services, immediately reversed the CENVAT credit of Rs.2,15,105/- availed as CENVAT credit on rental bill of Bandapur plant. He also submitted that as per the provisions of law, the Department should not have issued show-cause notice because the appellant has not utilized the said credit and it was lying in his books. He further submitted that the CENVAT credit of service tax paid on the rent of Bandapur plant and credit availed on bills addressed to Bandapur plant, these credits were availed by oversight due to ignorance of accounting staff. The bills of Bandapur plant was furnished to the accounts department of Chandapur Plant instead of Bandapur plant. As the staff of the accounts department were not aware of the CENVAT credit Rules the credit was accounted in Chandapur plant by oversight. He further submitted that the said credit was not only availed by Bandapur plant and therefore there was no revenue loss to the department as the credit was availed by Chandapur Plant and no credit was further availed by Bandapur plant which proves that there was no intention to avail any irregular credit. On being pointed out by the audit team of the department, the said credit was reversed in the books of accounts during June 2009 and duly intimated to the department. He also submitted that since the credit taken has already been reversed as admitted in the impugned order, it is as good as not taking credit at per the Supreme Courts decision in the case of Chandrapur Magnet Wires P. Ltd. vs. CCE: 1996 (81) E.L.T. 3 (SC). He further submitted that no mala fide could be attributed to invocation of larger period or imposition of penalty. In support of his submission, he relied upon the following authorities:
i. Hardik Founders & Engineers Pvt. Ltd. vs. CCE: 2016-TIOL-925-CESTAT-MUM.
ii. L.G. Balakrishnan & Bros. Ltd. vs. CCE: 2010-TIOL-1693-CESTAT-MAD.
iii. Aurobindo Pharma Ltd. vs. CCE: 2015-TIOL-1017-CESTAT-MAD.
iv. India Trimmings Pvt. Ltd. vs. CCE: 2016-TIOL-1294-CESTAT-MAD.
v. Siemens Ltd. vs. CCE: 2016-TIOL-1194-CESTAT-HYD.
He also submitted that there is no question of payment of interest and penalty as they have only availed the CENVAT credit in the books and has not utilized the same. In support of this, he relied upon the authorities of CCE, Bangalore vs. Bill Forge Pvt. Ltd.: 2012 (279) E.L.T. 209 (Kar.) and also J. K. Tyre & Industries Ltd. vs. CCE, Mysore: 2016 (340) ELT 193 (Tri.-LB). He further submitted that the penalty cannot be imposed as there was no mens rea on the part of the appellant to evade payment of duty. It was only bona fide mistake which was rectified immediately on being pointed out. In support of this submission, he relied upon the following authorities:
i. Flex Industries Limited vs. CCE: 2003 (151) ELT 198 ii. Aurobindo Pharma Ltd. vs. CCE: 2002 (52) RLT 943 iii. G.S. Enterprises vs. CCE: 2002 (50) RLT 012 iv. CCE vs. S. B. Packing Ltd.: 2002 (50) RLT 292 v. Nagpur Alloys Castings Ltd. vs. CCE: 2002 (50) RLT 873 (SC) vi. Asha Pavro Electronics Pvt. Ltd. vs. CCE: 2002 (143) ELT 543 vii. Stellar Chemical Labs Pvt. Ltd. vs. CCE: 2002 (134) ELT 504 viii. Sober Plastics Pvt. Ltd. vs. CCE: 2002 (139) ELT 562 ix. Jamna Auto Industries Ltd. vs. CCE: 2001 (130) ELT 181 x. Nahar Spinning Mills Ltd. vs. CCE: 2000 (121) ELT 400 xi. Seth Computers Pvt. Ltd. vs. CCE: 2000 (121) ELT 738 xii. Bhillai Conductors vs. CCE: 2000 (91) ECR 569 xiii. TTK Pharma vs. CCE: 2000 (111) ELT 320 xiv. Apollo Tyres Ltd. vs. CCE: 2001 (134) ELT 679
5. On the other hand the learned AR reiterated the findings of the impugned order.
6. After considering the submission of both the parties, I find appellants case is fully covered by the ratio of the authorities cited above and moreover this Tribunal in the case of CCE vs. Vikram System International Ltd. (supra) in para 4 has held as under:
4. On perusal of the documents, it is seen that it is a fact that the respondents had raised debit notes for the inputs received short. There is also no dispute that such debit notes for inputs received short were produced by the respondents when the audit party directed them to do so. It is also clear that when they were of informed of ineligibility of credit on inputs received short, the respondent reversed the entire amount by a debit in the PLA along with interest. The invocation of Section 11AC in this case may not arise as there is no intention to evade any payment of duty. The availment of Cenvat credit on inputs which was received short seems to be a genuine mistake and the findings of the Commissioner (Appeals) to this effect are not challenged. The findings of the Commissioner (Appeals) are as under:
5. As regards the imposition of penalty ofRs.4,03,183/- I find that just because appellants are registered since long and are one of the highest revenue payers, does not prove the intent to evade duty. On the contrary being one of the highest revenue payers and taking into consideration the fact that on being pointed out the appellants having immediately paid duty along with interest shows that they had no intention of evading duty. The Department has also not alleged any suppression. 6.1 Similarly in ISMT Ltd. (surpa) on identical facts, this Tribunal in para 8 (b) has observed as under:
8(b) With regard to the penalties, I find that neither in the show-cause notice nor any lower authorities have found anything with regard to the intention of the appellant to evade the payment of duty and in the absence of mens rea, the penalty under Section 11AC cannot be imposed on the appellant. Accordingly, I hold that penalty is not imposable on the appellants and to this extent I set aside the impugned order. Therefore, in view of this, the impugned order is set aside with consequential relief, if any.
(Order was pronounced in Open Court on 16/12/2016.) S.S GARG JUDICIAL MEMBER rv 6