Case Law Details
Konkan Railway Corporation Ltd Vs Commissioner of CGST & Central Excise-Belapur (CESTAT Mumbai)
The appellant is an Indian Public sector undertaking which operates Konkan Railway and undertakes railway related projects. A demand of Service Tax was confirmed against the company on the ground that the company has availed excess cenvat credit in terms of Rule (3A) of Cenvat Credit Rules, 2004. The appellant challenged the demand of Service Tax before the Hon’ble CESTAT Mumbai, on the ground that the company had cenvat credit balance amounting to Rs. 24,35,828/- lying unutilized in their cenvat credit account, as on 30.06.2017, and therefore, the demand of service tax should be adjusted against the unutilized credit.
The Hon’ble CESTAT, Mumbai allows the appeal of the company. It held that the fact of cenvat credit balance lying unutilized is not disputed. It relied on the decision in the case of Uttaranchal Cable Network. Accordingly, Hon’ble CESTAT set aside the impugned order and allowed the appeal.
The matter was argued by Ld. Counsel Mahesh Raichandani.
FULL TEXT OF THE CESTAT MUMBAI ORDER
The appellant is in appeal against the impugned order wherein the demand has been confirmed for non-payment of service tax of Rs.8,05,040/- on the ground that the appellant has availed excess cenvat credit in terms of Rule 6(3A) of Cenvat Credit Rules, 2004. Against this order, the appellant is before me.
2. During the course of audit, the auditor made observations as under :
“From the records it is observed that they have not carried forward Closing Balance for Rs.24,35,828/- as on 31.03.2017 for the month of April,2017. The submission of the assesse is found to be correct.” It was further observed that “The assessee has paid total amount of Rs.2,31,48,605/- ineligible Cenvat Credit alongwith interest amount of Rs.41,61,036/-. In view of above, the para is proposed for closure. The para discussed in the MMCM held on 01.04.2019.”
Therefore, a show cause notice was issued for reversal of the amount.
3. It is contention of the Ld.Counsel for the appellant that the total demand worked out in the impugned order Rs.11,24,180/- whereas they are having cenvat credit balance of Rs.24,35,828/- which were lying unutilized in their cenvat credit account, therefore, the same is to be adjusted. Accordingly, there is no demand against the appellant. He has relied on the Final Order No.51902/2021 dated 13.10.2021 in appeal No.ST/50294/2021. He also relied on the CBEC circular F.No.267/06/2009-CX.8 dated 28.03.2012.
4. On the other hand, ld. AR relied on the Notification No. 18/2017-ST dated 06.2017 to say that the cenvat credit lying unutilized in the credit ledger of the appellant which has not been carried forward into the GST regime cannot be adjusted against the demand raised by the department.
5. Heard the parties and considered the submissions.
6. The issue has been settled by this Tribunal in the case of Uttaranchal Cable Network vs. Commissioner of Customs, Central Excise & Service Tax in Appeal ST/50294/2021-SM vide Final Order No.51902/2021 dated 13.10.2021, wherein it has been held as under:-
“1. Having considered the rival contentions, I am satisfied that there is no bar or disability under Section 140(1) read with Section 142 of CGST Act, 2017 on an assessee for claiming adjustment of the tax demand from the unutilised cenvat credit (lying to the credit as on 30.06.2017), which has not been carried forward to the GST regime. I further find that the Commissioner (Appeals) has committed a mistake of law. Accordingly, I allow the appeal and set aside the impugned order of the Commissioner (Appeals). I further direct the Adjudicating Authority to grant adjustment of the unutilised amount of Rs.14,31,166/- against the demand payable by the assessee. The appellant shall be entitled to consequential benefits in accordance with law. “
7. I find that it is not disputed by either of side that the appellant is having balance of cenvat credit of Rs.24,35,828/- which were lying unutilized in their cenvat credit account which was not carried forward by the appellant on April, 2017. If the said amount was carried forward, then no demand is sustainable against the appellant.
8. In view of the decision of the Tribunal in the case of Uttaranchal Cable Network cited (supra), the demand proposed in the impugned order is not sustainable against the appellant.
9. In that circumstance, I do not find any merit in the impugned order and the same is set aside and the appeal is allowed with consequential relief, if any.
(Order dictated & pronounced in court)
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