DIAMOND POWER INFRASTRUCTURE LTD. AND ORS. Vs. COMMISSIONER, CENTRAL EXCISE & SERVICE TAX
LAWS(CE)-2015-7-21
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on July 22,2015

Diamond Power Infrastructure Ltd. And Ors. Appellant
VERSUS
Commissioner, Central Excise And Service Tax Respondents


Referred Judgements :-

CCE RAIPUR VS. RAJARAM MAIZE PRODUCTS [REFERRED TO]
CCE RAIPUR VS. ORION FERRO ALLOYS PVT. LTD [REFERRED TO]
Commissioner of Central Excise, Bangalore-I Commissionerate VS. Ecof Industries (P.) Ltd. [REFERRED TO]


JUDGEMENT

H.K.THAKUR - (1.)THESE appeals have been filed by the Appellants with respect to Orders -in -Appeal No. PJ/121 & 122/VDR II/2013, dt. 24.05.2013, passed by the Commissioner (Appeals), Vadodara as First Appellate Authority.
(2.)Under these Orders -in -Appeal, the First Appellate Authority has upheld the Order -in -Original. Shri Willingdon Christian (Advocate) appearing on behalf of the Appellants argued that the CENVAT Credit had been denied on the following: -
i) Credit with respect to M.S. Bars, Angles, Channels, Plates, Steel Sheets, Cement & Plastic Sheets used in making support structures of capital goods,

ii) CENVAT Credit paid on Consultancy Services availed by the Appellant.

iii) CENVAT Credit balance of Education Cess utilized for payment of Secondary & Higher Education Cess as not admissible.

2.1 Regarding in -admissibility of CENVAT Credit on M.S. Bars, Angles, etc., learned Advocate argued that at this stage, he is contesting the issue only on time bar nature of Show Cause Notice in demanding duty. It was his case that the admissibility of CENVAT Credit on these items was the subject matter of dispute and different Courts were giving different views on this issue. That the issue was decided by CESTAT Larger Bench in the case of Vandana Global Limited Vs. Commissioner : 2010 (253) ELT 440 (Tri -Del). It was his case that once an issue is resolved by the Larger Bench in the year 2010, then the extended period cannot be invoked against the Appellants for earlier periods when such credit was availed. That the demand period is from May 2009 to May 2010, whereas the Show Cause Notice is issued on 11.08.2011, which is beyond the normal period of one year under Section 11A of the Central Excise Act, 1944 for demanding duty. He relied upon the following case laws to argue that on the same issue, the appeals have been allowed on time bar issue: -

a) CCE Raipur Vs. Rajaram Maize Products : 2010 (258) ELT 539 (Tri -Del)

b) CCE Raipur Vs. Orion Ferro Alloys Pvt. Ltd. : 2010 (259) ELT 84 (Tri -Del)

c) CCE Hyderabad Vs. Lofty Laboratories (P) Ltd., 2010 (102) RLTONLINE 233 (CESTAT -Bangalore)

2.2 Regarding the admissibility of Service Tax credit paid on Consultancy Services, it was argued by the learned Advocate that the Appellant is having two factories at Vadodara and Silvassa. That majority of the manufacturing activity is being undertaken at Vadodara unit. That Service Tax invoice raised by the service provider was in the name of Vadodara unit and, therefore, the credit was correctly taken. That there was no provision under the CENVAT Credit Rules at that relevant time, that CENVAT Credit of such services has to be reduced to the extent of 50%. It was argued by the learned Advocate that proportionate taking of CENVAT Credit on the basis of certificates issued by ISD was made under Rule 7 of CENVAT Credit Rules, 2004 w.e.f. 17.03.2012 only. That before this amendment, entire service tax credit could be utilized by the Appellant in a particular factory of the Appellant.

2.3 That payment of Secondary and Higher Education Cess from CENVAT balance of Education Cess is admissible.

(3.)SHRI Govind Jha (A.R.) appearing on behalf of the Revenue argued that as per the provisions of Rule 3(7)(b) of CENVAT Credit Rules, 2004, Secondary and Higher Education Cess cannot be debited from the CENVAT Credit balance of Education Cess. That an amount of Rs. 2,74,771.00 utilised from credit balance of Education Cess was not proper. It was also argued by the learned A.R. that an amount of Rs. 40,000.00 was taken as excess credit by the Appellant which was subsequently reversed/debited in the RG23A Part II. It was argued that the interest on this amount is required to be paid by the Appellant.
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