Custom, Excise & Service Tax Tribunal
M/S. Surya Elevators Pvt. Ltd vs Commissioner Of Central Excise, ... on 27 September, 2017
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20489/2015-SM [Arising out of Order-in-Appeal No.724/2014-CE dated 21.11.2014 passed by Commissioner of Central Excise (A-I, BANGALORE] M/s. Surya Elevators Pvt. Ltd. Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax, Bangalore Respondent(s)
Appearance:
Shri Akbar Basha, CA For the Appellant Shri M Saran, AR For the Respondent Date of Hearing: 21.09.2017 Date of Decision: 27.09.2017 CORAM:
HON'BLE SHRI M.V. RAVINDRAN, JUDICIAL MEMBER Final Order No. _________ / 2017 Per : M.V. RAVINDRAN This appeal is directed against Order-in-Appeal No.724/2014-CE dated 21.11.2014.
2. Heard both sides and perused records.
3. The issue that falls for consideration in these appeals are
(a) Whether the appellant was required to reverse Cenvat credit of Rs. 1,07,284/- which was availed on photo copies of the invoices;
(b) Whether the appellant is required to reverse Cenvat credit of Rs. 91,061 availed prior to obtaining Central Excise Registration;
(c) Whether the appellant is required to reverse the Cenvat credit availed twice on the same documents; and
(d) Consequent interest and penalties on the above violations.
4. The Adjudicating Authority as well as the first appellant authority held against the appellant on all the four counts.
5. Learned CA would draw my attention to the annexures to show cause notice and submit that annexure-I is issued for the reversal of Cenvat credit availed on photo copies of the invoices which indicates that appellant inadvertently availed Cenvat credit of Rs. 5,768 only on photo copies, while major amounts which shown are availed on goods rejected and the show cause notice as well as the impugned order does not give any reasoning for the denial of such Cenvat credit. He would submit that as regards availment of Cenvat credit of input services availed before registration with Central Excise Department, appellant are rendering output services on which service tax is discharged and also registered with the department, hence were under an impression that they are eligible to avail Cenvat credit; that the issue is now settled by the judgement of the Honble High Court of Karnataka in the case of mPortal India Wireless Solutions P. Ltd. 2012 (27) S.T.R. 134 (Kar.) wherein Honble High Court has settled the law that registration with department is not a pre-requisite for availment Cenvat credit; it is his submission that it was a clerical error that they availed credit twice as same documents and on being pointed out by the authorities, the same was reversed immediately. He would submit in any case, appellant has reversed all the amounts which has been confirmed by the lower authorities and has also paid the interest in order to buy peace in the department. He would submit that appellant is only contesting the penalties imposed on them under the provisions of Rule 15(2) of the Cenvat credit Rules, 2004. He would submit that the penalties imposed be set aside.
6. Learned DR on the other hand, would submit that availment of Cenvat credit on the photo copies of the invoices, availing Cenvat credit twice on the same documents and availing Cenvat credit before the registration are all not procedural lapses and appellant being in the organized sector, should have known the law better than anyone else. He would submit that penalty is imposable on such errors as this type of availment of ineligible Cenvat credit, has resulted in clearance of finished goods without payment of appropriate Central Excise duty.
7. I have considered the submissions made at length by both sides and I perused the records.
8. It is noticed that appellant are contesting only the penalty imposed in this appeal.
9. Since the appellant has discharged the confirmed demands and not contesting the same, I uphold the demand and the interest.
10. As regards penalty imposed on the appellant, I find that the case in hand, the bulk of the demand of ineligibility of Cenvat credit of availing the same without registration is approx. Rs. 91,000/- which seems to be correct preposition of law and appellant would be eligible for the same is the law which is settled by the Honble High Court of Karnataka in the case of mPortal India Wireless Solutions P. Ltd.
11. As regards the reversal of Cenvat credit of further amount of approx. Rs. 95,000/- as per annexure-I to show cause notice, I find that the said demand as indicated in the annexure, is levied on the goods rejected and not for availing credit on the photo copy of invoices. If appellant would have contested this demand on merits, he may have, possibly, succeeded in his endeavours.
12. As regards of reversal of Cenvat credit of other amounts, it is seen from the records that the appellant has reversed the same as being pointed out to buy peace. In my view, since almost bulk of the amount of reversal of Cenvat credit may have been successfully contested by the appellant, if they had done so on merits, the penalties imposed by the Adjudicating Authority and upheld by the first appellant authority in my considered view is unwarranted and liable to be set aside and I do so.
13. In sum, the impugned order is set aside to the extent it upholds the penalties imposed by the Adjudicating Authority.
14. The appeal is disposed of as indicated herein above.
(Order was pronounced in Open Court on .) M.V. RAVINDARAN JUDICIAL MEMBER RB 5