COMMISSIONER OF CENTRAL EXCISE Vs. SAKTHI SUGARS LTD.

JUDGEMENT

(1.) REVENUE filed this appeal against Order -in -Appeal No. 85//2009 -C.E., (SLM), dated 11 -6 -2009 passed by the Commissioner of Central Excise (Appeals), Salem whereby the adjudication order was set aside. The relevant facts of the case in brief, are that the respondents are engaged in the manufacture of Sugar, Molasses, etc., and availed Cenvat credit benefit. The respondent received service from the foreign service provider in connection with the issue of Foreign Currency Convertible Bonds (FCCB) under the category of "Merchant Banking Services". It was detected by the Central Excise officer of DGCEI, that the respondent had not paid the tax. Upon detection, the respondent paid the tax by TR -6 challan, dated 31 -5 -2007 of Rs. 25,54,160/ -. The respondent availed input service credit on the basis of the said TR -6 challan. A show cause notice, dated 29 -5 -2008 was issued to disallow the said credit mainly on the ground that the TR -6 challan evidencing payment of tax as a result of an offence case is not eligible document for availing credit under Rule 9(1)(b) of Cenvat Credit Rules, 2004. Adjudicating authority confirmed the demand of Rs. 25,54,160/ - along with interest and also imposed a penalty of Rs. 5 lakhs. Commissioner (Appeals) set aside the adjudication order. Hence, the Revenue filed this appeal before the Tribunal as to whether or not TR -6 challan evidencing payment of tax after detection of offence case is eligible document for availing Cenvat credit under Rule 9(1)(b) of the Rules, 2004.

(2.) THE learned Authorised Representative on behalf of the Revenue reiterates the grounds of appeal. It is submitted that the respondent paid the Service Tax upon detection by the DGCEI. He submits that Rule 9(1)(b) would restrict the eligibility of Cenvat credit in respect of supplementary invoices, on account of any short levy or non -levy by reason of fraud, collusion or wilful misstatement, which will be applicable in the present case. He also submits that Rule 4A of the Service Tax Rules, 1994 provides that every person shall issue invoice or a challan, not later than 14 days from the date of completion of such taxable services. In the present case, the respondent issued TR -6 challan evidencing payment of tax after 14 days of taxable service, as a result of offence case. It is not an eligible document for availing credit. The learned Authorised Representative particularly drew the attention of the Bench to Paragraph 3.5 of the Grounds of appeal. Hence, the applicant is not eligible to avail credit on the basis of such challans.

(3.) AFTER hearing both sides and on perusal of records, I find that the issue involved in this case is whether the respondent is eligible to avail credit on the basis of TR -6 challan during the month of May, 2007 which was paid after detection by the DGCEI officer.