Custom, Excise & Service Tax Tribunal
Ultratech Cement Ltd vs The Commissioner-Nagpur on 12 December, 2023
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH, MUMBAI
Excise Appeal No. 85504 of 2020
(Arising out of Order-in-Original No. 05/ST/2020/COMMR/NGP-II dated 24.02.2020
passed by the Commissioner of CGST & CX, Nagpur-II.)
M/s Ultratech Cement Ltd. ........Appellant
Unit - Nagpur Cement Works,
Mauda - Ramtek State Highway,
Ashti - Navegaon, Tarsa,
Teh. - Mauda, Dist.- Nagpur - 441 106
VERSUS
Commissioner of Central Excise, Nagpur ........Respondent
GST Bhavan, Telangkhedi Road, Civil Lines, Nagpur, Maharashtra - 440 001 APPERANCE:
Shri Rajesh Ostwal, Advocate for the Appellant Shri P.K. Acharya, Supdt., Authorised Representative for the Respondent CORAM:
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL) FINAL ORDER NO. 87225/2023 Date of Hearing: 21.11.2023 Date of Decision: 12.12.2023 Denial of CENVAT Credit to the Appellant's cement company on Earth Excavation and Land development work, Erection of Street Light Poles and Manpower Supply services by the Commissioner of CGST & CX, Nagpur-II for the period between September, 2014 to June, 2017 is assailed herein this appeal.
E/85504/2020 2
2. Facts of the case, in a nutshell, is that Appellant is a manufacturer of Cement OPC and Cement PPC falling under Tariff Item No. 25232910 and 25232930 of the First Schedule of the Central Excise Tariff Act, 1985 respectively. It has been availing various inputs/input services on capital goods for manufacturing of final products but for the above referred period, basing on Audit report, show-cause notice dated 09.10.2019 was issued to the Appellant proposing denial of credit to the tune of Rs.2,21,02,315/- on various inputs alongwith proposal for its recovery with interest and penalty. Appellant contested the same but ultimately demand to the extent of Rs.16,72,024/- for the above three noted input services were denied to the Appellant while demand to the extent of 92% i.e. Rs.2,04,30,291/- was dropped. Legality of the order passed by the Commissioner to the extent of its denial is only assailed by the Assessee-Appellant in this appeal.
3. I have heard submissions from both the sides and perused the case record. Learned Counsel for the Appellant Mr. Rajesh Ostwal argued with reference to various judgments justifying input services taken for laying down Railway siding used for material handling equipment within the factory premises and construction of rainwater harvesting plant through earth excavation and land development works. With reference to decision of this Tribunal passed in the case of Honda Motorcycle And Scooter India Pvt. Ltd. Vs. CGST C & CE, Alwar as reported in 2018 (11) TMI 1588 - CESTAT, New Delhi concerning input services availed on maintenance of streetlight, road E/85504/2020 3 light etc. and Tribunal's decision with reference to J.K. Cement Works Vs. Commissioner of Central Excise & Service Tax, Udaipur judgment of this Tribunal as reported in 2022 (1) TMI 1174 - CESTAT, New Delhi, he further argued that input used for LED Street lighting and maintenance of Road lights are admissible credit for the reason that they were used towards infrastructure development of the factory as has been held by the Tribunal. In respect of services of manpower supply, he further pointed out that denial of CENVAT Credit on the ground that documentary proof/invoice justifying credit to the tune of Rs.73,397/- couldn't be identified from the total invoice of Rs.1,27,866/- raised for the said purpose is no ground to reject the credit on manpower supply, for which the order passed by the Commissioner is required to be set aside.
4. On the other hand, as could be noticed from the submission made by learned Authorised Representative Mr. P.K. Acharya, Appellant had never submitted any proof in reply to the show-cause notice nor led its argument before the Commissioner that services were used for construction/laying down of Railway lines or Railway tracks as it was justifying availment of credit towards construction of rainwater harvesting plant that was refused by him as the same had fallen under the exclusion clause of the definition of input service. He further argued that erection of Streetlight poles, consists of composite contract namely supply of materials as well as service of laying foundation/erection of poles, which are immovable civil structure and as Appellant had not provided copy of the contract for E/85504/2020 4 manpower supply service, credits were accordingly denied and not on the ground that invoices for availment of credit could not be identified, as has been asserted by the Appellant.
5. On perusal of the noting made in the Commissioner's order concerning defence offered by the Appellant, the reply to show-cause notice and also the order passed by the Commissioner, it can be said that there is force in the submission of learned Authorised Representative for the Respondent-Department and with all these background, this Bench is not inclined to enter into the arguments led by the Appellant regarding definition of "Plant & Machinery" given under Income Tax Act, 1961 that was stretched to include Railway Siding / Rain Harvesting Plant and Street Light Poles, but are being treated as building or civil structure by the Indirect Tax Department. However, what is required to be done here is to examine the legality of issue of show-cause notice to the Appellant in invoking extended period and justifying the demand.
6. In a separate note of submission learned Counsel for the Appellant submitted that there was no suppression of fact with intent to evade payment of duty for the reason that show-cause notice itself clearly indicates that on the basis of invoices and records maintained by the Appellant, the demand was raised on the Appellant who was filing ER-1 return regularly and was maintaining all statutory records against availment of CENVAT Credits including records of disputed input services availed by it. In support of his E/85504/2020 5 submissions, he placed his reliance on the judgment of ITI Ltd. Vs. CCE-[2001 (45) RLT 163 (T)], BHEL Vs. CCE-[1997 (18) RLT 573 (T)], DCM Engineering Vs. CCE-[2002 (147) ELT 820 (T)], Maintained by Supreme Court at [2003 (153) ELT A301 (SC)], Pranav Vikas (I) Ltd. Vs. CCE-[2002 (148) ELT 963 (T)], Asoka Spintex Vs. CCE- [2004 (171) ELT 59 (T)], IOC Vs. CCE-[2003 (55) RLT 732 (T)], Air Carrying Corporation Vs. CCE-2008 (229) ELT 80 (T) Approved by Bombay High Court at [2009 (248) ELT 175 (Bom)], Adhikrut Jabti Vs. CCE-[2017 (6) G.S.T.L. 529 (T)], Rolex Logistics Vs. CCE-[2009 (13) STR 147 (T)]. Further, with reference to the judgment of Hon'ble Gujarat High Court passed in the case of Cadila Pharmaceutical Ltd. Vs. CCE reported in 2017 (349) ELT 0694 (Guj.), he argued that when information was not required to be supplied in detail under the law, non-supply of the same like requirement to report the detail of invoices on which CENVAT Credit has been availed in the statutory returns or otherwise, would not amount to suppression, apart from the fact that demand was raised on the basis of Audit report alone for the period between 13.10.2017 and 13.12.2017 on the basis of scrutiny of documents of the Appellant for which denial of credit basing on Audit objection dated 04.01.2018 would not be justified and more importantly raising of demand through show-cause notice that was issued on 09.10.2019, after the stipulated two years period prescribed for issue of notice of recovery is unsustainable in law and facts. On perusal of the order passed by the Commissioner, it is noticed that the ground stated in invocation of extended period was not convincing for the reason that he said E/85504/2020 6 that had Audit not scrutinised the record, the fact of availment of inadmissible credit would not have come to the knowledge of the Department and, therefore, suppression to evade payment of tax was established. I am not convinced with such an observation for the reason that the Tribunal has consistently held in various orders that Audit report can't alone from the basis of invocation of extended period. It is worthwhile to reproduce a portion of judgment passed in the case of M/s. Thyssenkrupp Industries India Pvt. Ltd. Vs. CCE & ST, Pune-I vide Final Order No. A/87941/2018 dated 20.11.2018 concerning the purpose of Audit and its resultant effect in para 07 of the said judgment. It reads:
"Manual published by the Institute of Chartered Accountants of India in respect of EA audit and CERA audit under Chapter 17 is that the idea behind such conduct of verification is to reasonably ensure that no amount, which under the central excise law is chargeable as duty, escapes taxation and the process of verification is always carried out in the presence of assessee and in the process, the auditor is required to discuss the matter with the assessee and advice him to follow correct procedure in future. It is also referred in the said manual that after such submission of audit report, in cases where the disputed amount have not already been paid by the assessee at the spot, demand notices are issued by the department for their recoveries. EA 2000 audit was therefore held to be participative audit. Likewise CERA audit is conducted by the Comptroller and Auditor General of India in respect of receipt and expenditure of the Government of India. It also discharges revenue audit which covers central excise, service tax and customs laws during which time the assesses were examined by CERA audit party to point out the deficiencies, leakage of revenue and non recoveries of dues by the Central Excise Department. Therefore, it cannot be said that only E/85504/2020 7 because audit party had found some credit availed as inadmissible, suppression of fact is made out. It cannot also be established that appellant had any malafide intention to suppress its duty liability from the department ... ."
In carrying forward the judicial precedent set by this Tribunal, the following order is passed.
THE ORDER
7. The appeal is allowed and the order passed by the Commissioner of CGST & CX, Nagpur-II vide Order-in-Original No. 05/ST/2020/COMMR/NGP-II dated 24.02.2020, to the extent of denial of credit, is hereby set aside.
(Order pronounced in the open court on 12.12.2023) (Dr. Suvendu Kumar Pati) Member (Judicial) Prasad