Faurecia Automotive Seating India Pvt. Ltd. Vs Commissioner of Central Excise (CESTAT Chandigarh)
The appeal before CESTAT Chandigarh challenged the Commissioner’s order dated 24.04.2014 confirming a demand of Rs. 2,63,03,909 along with interest and imposing a penalty of Rs. 31,51,955 under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 11AC(1) of the Central Excise Act, 1944. The appellant, engaged in manufacturing automotive seating parts at its Gurgaon unit, had earlier operated another manufacturing unit at Bangalore, which ceased operations in April 2007. During March 2011 to February 2012, FSA France issued ten invoices for business support services addressed to the Bangalore office. During audit, the Department alleged that the Gurgaon unit had wrongly availed and utilized CENVAT credit on invoices addressed to the Bangalore unit, which had a separate service tax registration, and issued a show cause notice proposing recovery of the credit.
The appellant submitted that service tax under the reverse charge mechanism had been discharged by the Gurgaon unit, the GAR-7 challans recorded the Gurgaon unit’s address, payment for the services had also been made by the Gurgaon unit, and the services had been received and consumed only by the Gurgaon unit since the Bangalore manufacturing unit had already become inoperative. It further contended that under Rule 9(1)(e) of the CENVAT Credit Rules, a challan evidencing payment of service tax by the recipient was a valid document for availing CENVAT credit. The appellant also submitted that the mention of the Bangalore address in the invoices was an inadvertent error by the service provider and could not result in denial of substantive CENVAT credit. It further argued that the extended period of limitation was not invocable because the credit had been disclosed in statutory returns and there was no suppression of facts or intention to evade duty.
