SAVLA CHEMICALS LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) AN amount of Rs. 51,826/ - taken as credit of service tax paid on the basis of TR -6 Challans paid by the Assessee as receiver of service, has been denied and the Assessee has been asked to pay the same with interest. Penalty equal to the service tax demanded has been imposed under Section 78 of Finance Act, 1994.

(2.) EVEN though, what was under consideration is only the stay application but as the matter was heard in great detail and it was found that the issue involved can be decided at this stage itself, therefore with the consent of both the sides, appeal itself is taken up for final decision, after waiving the requirement of pre -deposit of dues.

(3.) IN this case, the show cause notice was issued on the ground that CENVAT credit of service tax paid during the period from 01.01.2005 to 15.06.2005, on the basis of TR -6 Challan by the Appellant was not admissible. The TR -6 Challans was notified as one of the documents on the basis of which the credit can be taken, by Notification issued on 16.05.2005. The original adjudicating authority took the view that credit cannot be taken on the basis of TR -6 Challans by the receiver of service, prior to 15.06.2005. However, on appeal filed by the Appellants, learned Commissioner took a view that credit can be taken on the basis of TR -6 Challans. However, she upheld the order in original on the ground that credit of service tax paid on outward transportation is not admissible. I find myself in agreement with the learned Counsel when he submits that the show cause notice was issued only on the ground that credit could not have been taken on the basis of TR -6 Challans and therefore, the Appellant never raised the point that credit on outward transportation service is admissible. Whereas the Commissioner in her order has observed that the Appellant is not eligible for credit on outward transportation service and they were not allowed to raise this point since the same was not raised before the original adjudicating authority, in view of the provisions of Rule 5 of Central Excise (Appeal) Rules, 2001. Show cause notice itself did not propose any liability on the ground that outward transportation service credit was not available and as a measure of precaution Appellant raised this ground before the Commissioner (Appeal). The action of Commissioner (Appeals) in upholding the order in original on the ground which was not even raised in the show cause notice, is not correct. On this ground itself, appeal is required to be allowed.