By TIOL News Service

MUMBAI, MAY 18, 2018: DURING audit, an objection was raised as regards availment of credit in respect of certain services viz. renting of immovable property, insurance service, outward octroi, Customs House Agent charges, Xerox machine and printing machine.

The appellant admittedly paid the entire amount of cenvat credit availed and also paid interest and penalty. They also intimated the department the above payment particulars vide their letter dated 3.3.2014 and requested for waiver of show cause notice.

Accordingly, the Audit section closed this Audit paragraph and no SCN was issued.

Later, the appellant filed a refund claim on the ground that they are eligible for cenvat credit in respect of the aforesaid services.

Both the lower authorities rejected this claim on the ground that once the appellant had admittedly paid the amount and waived the show cause notice, thereafter, they cannot change their stand.

An appeal came to be filed before the CESTAT.

The AR while reiterating the findings of the impugned order submitted that whether the issue raised in Audit by the department is correct and legal or otherwise, once the appellant paid the duty admittedly along with interest and penalty and waived the show cause notice, the department is not in a position to issue any show cause notice. Hence, the issue attained finality with the stand taken by the appellant.

The provisions of law under the CEA, 1944 relevant to the issue are –

11A(6).- Any person chargeable with duty under sub- section (5) may, before service of show cause notice on him, pay the duty in full or in part, as may be accepted by him along with the interest payable thereon section 11AA and penalty equal to one percent of such duty per month to be calculated from the month following the month in which such duty was payable but not exceeding a maximum of twenty five percent of the duty and inform the Central Excise Officer of such payments in writing.

11A(7).- The Central Excise Officer, on receipt of information under sub-section (6) shall – (i) not serve any notice in respect of the amount so paid and all proceedings in respect of the said duty shall be deemed to be concluded where it is found by the Central Excise Officer that the amount of duty, interest and penalty as provided under sub-section (6) has been fully paid.

The Bench adverted to these provisions and observed -

"3. …, I find that there is no dispute with regard to the audit objection. The appellant accepted the liability and paid the entire amount of cenvat credit availed on various services as mentioned above. They have also paid the interest and penalty and requested for waiver of show cause notice. This act of the appellant closed the entire proceedings. Thereafter, neither the department can issue any show cause notice nor the assessee can change their stand for the reason that the department has no opportunity to issue any further show cause notice…"

Noting that the appellant had opted for the provisions of Section 11A(6) & (7) of the CEA, 1944 and, therefore, the proceedings stand concluded and no grievance can be raised on behalf of either side, the Bench held that there was no infirmity in the impugned order.

The appeal was dismissed.

(See 2018-TIOL-1554-CESTAT-MUM)