Custom, Excise & Service Tax Tribunal
M/S. Emerson Innovation Center- Pune vs Commissioner Of Central Excise, Pune on 23 June, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/355/12 (Arising out of Order-in-Appeal No. PI/RKS/30/2012 dt. 28.2.2012 passed by the Commissioner (Appeals) Central Excise, Pune-I ) For approval and signature: Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, 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 : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
======================================================= M/s. Emerson Innovation Center- Pune :
Appellant VS Commissioner of Central Excise, Pune :
Respondent Appearance Shri Srikanth Balkrishnan, C.A. for Appellant Shri V. Kaushik, Assistant Commissioner, (A.R) for respondent CORAM:
Honble Mr. Ramesh Nair, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of hearing : 23/06/2016 Date of decision : 23/06/2016 ORDER NO.
Per : Ramesh Nair The present appeal was filed by the appellant against the Order-in-Appeal No. PI/RKS/30/2012 dt. 28.2.2012 passed by the Commissioner (Appeals) Central Excise, Pune-I whereby the Ld. Commissioner upheld the rejection of refund claim of Rs.17,57,529/- on the ground that this credit was availed by the appellant before making payment of value and the service tax on such services to service provider. The Ld. Commissioner held that Cenvat Credit in terms of Rule 4(7) of Cenvat Credit Rules 2004 can be availed only after payment of service value and service tax to the service provider. Therefore when the cenvat credit itself was wrongly availed in contravention of provisions of Rule 4(7) of CCR Rules,2004. The question of refund under Rule 5 of Cenvat Credit Rules 2004 read with Notification No. 05/2006-CE(NT) dt. 14.3.2006 in respect of wrongly availed credit shall not arise. Being aggrieved by the impugned order the appellant is before us.
2. Shri Srikanth Balakrishnan, Ld. Chartered Accountant appearing on behalf of the appellant submits that though at the time of taking credit the payment of service charges and service tax thereof was not made to the service provider but subsequently the same has been paid. At the time of process of refund claim the value of the service and service tax stood paid to the service provider, therefore refund cannot be denied on this ground. He relied upon this Tribunal judgment in the case of Gujarat Pipavav Port Ltd. Vs. Commissioner of Central Excise, Bhavnagar 2009 (14) STR 53 (Tri.-Ahmd.).
3. Shri V. Kaushik, Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submissions made by both the sides and perused the records. We find that the rejection of refund to the extent of Rs.17,57,529/- was upheld by the Ld. Commissioner on the admitted fact that at the time of taking credit the service charges and service tax thereon was not paid but it is also accepted that the same has been paid subsequently. In our view at the time of sanction of refund when the service charges and service tax stood paid to the service provider the refund cannot be denied for the reason that the appellant was not entitled for the cenvat credit initially. But after payment of service charges and service tax to the service provider they became entitled for the cenvat credit and the sanction of refund claim thereafter cannot be disputed. The decision of this Tribunal in the case of Gujarat Pipavav Port Ltd.(supra) squarely applies in the facts of the present case wherein it was held as under :
2.?Learned Advocate appearing for the appellants submits that this was a procedural lapse on the part of the appellant in availing advance service tax credit prior to the payment of service tax of input service availed by them but ultimate credit is available to them in the next month. They are ready to pay interest for the intervening period. I agree with the above contention of the learned Advocate. The entire credit cannot be denied to them. Admittedly, the same stands availed premature and in any case was available during the subsequent period. Inasmuch, as, the same is utilized by the appellant, interest in accordance with law is required to be paid. Taking a lenient view, I do not find it a fit case for imposition of penalty.
3.?In view of the above, denial of credit and imposition of penalty is set aside. Interest as per law is confirmed. From the above decision it can be seen that only credit availed at premature stage cannot be reason for denial of credit. In the above decision, it was held that at the most interest can be charged. In the present case, the fact is that the cenvat credit was availed only for claiming the refund under Rule 5 and there was no utilization of the credit for payment of service tax. Therefore, even the interest is not applicable in the facts of the present case. As per our above discussion and taking support of the case of Gujarat Pipavav Port Ltd.(supra), the impugned order is modified and the appeal is allowed.
(Pronounced in court) (C.J.Mathew) Member (Technical) (Ramesh Nair) Member (Judicial) SM.
4Appeal No. ST/355/12