Decided on May 18,2015

Commissioner Of C. Ex. And S.T., Allahabad Respondents


- (1.)Rakesh Kumar, Member (T)
(2.)THE appellants are manufacturers of chromium products. The period of dispute in this case is from November, 2011 to July, 2012. They availed Cenvat credit of Central Excise Duty paid on inputs and capital goods and of service tax paid or input services in terms of provisions of Cenvat Credit Rules, 2004. During the above mentioned period of dispute, they took Cenvat credit of Rs. 3,97,25,526/ - on the basis of the invoices of a number of input service providers. The department has alleged that the invoices on the basis of which Cenvat credit has been taken are supplementary invoices for payment of service tax which had been evaded, and therefore, the provisions of clause (bb) of Rule 9(1) would become applicable, according to which the Cenvat credit of service tax paid under supplementary invoices, bills or challans issued by a provider of output service under Service Tax Rules, 1944 would be admissible except where the additional amount of tax has become recoverable from the service provider on account of non -levy or non -payment or short -payment or short -levy of service tax by the reason to fraud, collusion, willful misstatement or suppression of facts or contravention of any provisions of the Finance Act, 1944 or of the Rules, made therein with intent to evade the payment of service tax. The department has alleged that the service tax whose credit had been taken is the tax which had been evaded by the service providers. It is on this basis that after issue of show cause notice, the Commissioner vide order -in -original dated 28 -5 -2014 has confirmed the above mentioned Cenvat credit demand along with interest and has imposed penalty of equal amount on them under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. Against this order of the Commissioner, this appeal has been filed along with stay application. Heard both the sides in respect of the stay application.
Shri B.L. Narsimhan, Advocate, ld. Counsel for the appellant, pleaded that though the para 4 of the show cause notice makes an allegation that on scrutiny of the details provided by the appellant vis -a -vis, show cause notice issued to the service providers by the department, it has been ascertained that show cause notices regarding demand had been issued to the service providers under Proviso to Section 73(1) of Finance Act, 1994 and the demands against service providers have been confirmed under proviso to Section 73(1) and penalty under Section 78 of the Finance Act, 1994 has also imposed, no details of such show cause notices issued to the service providers and the adjudication orders passed by the concerned adjudicating authorities have been given; that the appellant in some cases contacted the concerned service providers and it was found that either no show cause had been issued or in the cases where the show cause notices invoking proviso to Section 73(1) had been issued, either the same had been set aside on the ground of limitation by the Tribunal or invoking Section 80 penalties had been set aside; that in view of this, the allegation that in all the cases, the invoices on the basis of which the Cenvat credit, in question, had been taken, were invoices under which the duty evaded by the service providers had been paid, is factually incorrect, more so, when absolutely no details of the show cause notices issued to service providers and the orders -in -original passed against the service providers have been given in the show cause notice or provided to the appellant and that in view of this, the appellant have strong prima facie case in their favour and hence, the requirement of pre -deposit of Cenvat credit, demand, interest and penalty may be waived for hearing of the appeal and recovery thereof may be stayed.

(3.)SHRI M.S. Negi, the ld. DR opposed the stay application by reiterating the findings of the Commissioner in the impugned order.

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