ATC Tires Private Limited Vs Commissioner of Central Excise And Service Tax (CESTAT Ahmedabad)
Summary: M/s. ATC Tires Pvt. Ltd., Tal. Vagra, Dist. Bharuch, Gujarat, filed two appeals, E/12756/2019 and E/10075/2019, against orders of the Commissioner (Appeals) concerning disallowance of CENVAT Credit aggregating to Rs.78.18 lakhs. The appellant manufactures excisable goods falling under Chapter 40 of the Central Excise Tariff Act, 1985.
An audit covering July 2013 to December 2015 resulted in objections concerning service tax credit availed on various services, including Engineering Contract services for procurement assistance, erection, commissioning and installation, laying foundation and making structures, fabrication, Professional and Management Consultancy, Vastu and Architecture services used in connection with the new building and plant. Revenue’s case was that the definition of “input service” under Rule 2(l) of the CENVAT Credit Rules, 2004 had changed with effect from 01.04.2011 and, following omission of the expression “setting up”, credit on services used for setting up the factory was not admissible.
Two show cause notices were issued: one dated 16.06.2017 covering July 2013 to December 2015 involving Rs.57.80 lakhs and another statement of demand dated 02.04.2018 covering March 2016 to June 2017 involving Rs.20.36 lakhs. The demands were confirmed under Section 11A(4) of the Central Excise Act, 1944 read with Rule 14 of the CENVAT Credit Rules, together with interest under Section 11AA and penalties under Rule 15(2) read with Section 11AC. The Commissioner (Appeals), by order dated 14.09.2018, upheld the credit and interest demands while reducing the penalties to 50% and 10% of the respective credit amounts.
