Custom, Excise & Service Tax Tribunal
Indian Additives Ltd vs Commissioner Of Gst&Amp;Cce(Chennai ... on 3 July, 2018
1
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. E/40254/2018
(Arising out of Order-in-Appeal No. 257/2017 (CTA-I) dated 25.10.2017
passed by The Commissioner of G.S.T. & Central Excise (Appeals-
I),Chennai)
M/s. Indian Additives Ltd. : Appellant
Vs.
The Commissioner of G.S.T. & Central Excise, Chennai : Respondent
Appearance:-
Shri. V. S. Manoj, Advocate for the Appellant Shri R. Subramaniyan, AC (AR) for the Respondent CORAM:
Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Date of Hearing/Decision:03.07.2018 Final Order No. 41934 / 2018 Brief facts are that the appellants had availed credit on Construction Services for the period from October, 2011 to July, 2012. The Department was of the view that the said credit is not eligible as per the amended definition of input services with effect from 01.04.2011. The appellant had reversed the entire credit before utilization, however, Department issued Show Cause Notice proposing to demand interest as 2 well as imposing penalties. After due process of law, the Original Authority confirmed the demand and interest and imposed penalties. In appeal, the Commissioner (Appeals) upheld the same. Aggrieved, the appellant is now before the Tribunal.
2. On behalf of the appellant, the learned Counsel, Shri. V. S. Manoj, argued that the appellant had inadvertently availed credit on input services, namely, Construction Services. He agreed that after 01.04.2011, credit is not eligible on said services as these do not qualify as input services. He pleaded that the appellant had reversed the credit before utilization and it would amount to non-availment of credit. That, therefore, the demand of interest or penalties imposed cannot sustain. The decision in the case of Commissioner of C. Ex., Madurai Vs. Strategic Engineering (P) Ltd. [2014 (310) E.L.T. 509 (Mad.)] as well as the decision in the appellant's own case in Final Order No. 41744/2018 dated 07.06.2018 was also relied by the learned Counsel.
3. The learned AR, Shri R. Subramaniyan, supported the findings in the impugned order.
4. Heard both sides.
5. The only issue to be decided is whether the appellants are liable to pay the interest and the penalties imposed on the ground that they had 3 availed credit on Construction Services after 01.04.2011. It is not disputed that the appellants had reversed the credit immediately on being pointed out. As per the decision in the case of Strategic Engineering (P) Ltd. (supra), the Hon'ble jurisdictional High Court has held that no interest and penalty can be levied when the wrongly availed credit has been reversed before utilization. Following the same, I am of the view that the impugned order cannot sustain and requires to be set aside, which I hereby do.
6. The appeal is allowed, with consequential reliefs, if any.
(Dictated and pronounced in open Court) (Sulekha Beevi C.S.) Member (Judicial) Sdd