Commissioner Of Central Excise vs Sesa Industries Ltd

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI

COURT No. II

APPEAL No.E/48/07

(Arising out of Order-in-Appeal No.GOA/CEX/BBP/85/2006 dated 05/10/2006 passed by Commissioner of Central Excise (Appeals), Goa)

For approval and signature:

Honble Mr. Anil Choudhary, Member (Judicial) Honble Mr. Raju, Member (Technical)

1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy :Seen of the Order?

4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================

Commissioner of Central Excise, Mumbai Appellant Vs. Sesa Industries Ltd., Respondent

Appearance:

Shri.Sanjay Hasija, Supdt. (AR) for appellant Shri.Mukesh Laddha, CA, for respondent

CORAM:

Honble Mr.Anil Choudhary, Member (Judicial) Honble Mr. Raju, Member (Technical)

Date of Hearing : 07/08/2015 Date of Decision : 07/08/2015

ORDER NO

Per: Anil Choudhary

1. The appeal is filed against Order-in-Appeal No.GOA/CEX/BBP/85/2006 dated 05/10/2006 passed by Commissioner of Central Excise (Appeals), Goa.

2. Learned departmental representative would submit that the issue is regarding the availment of Cenvat Credit on TR-6 challan which was used for paying service tax on GTA services. He would reiterate findings of lower authorities.

4. We have considered the submission made by learned departmental representative and perused the records.

5. The issue involved in this case is regarding availment of Cenvat Credit of service tax paid by the appellant for GTA services during the period 24.03.2005 to 15.06.2005, under TR-6 challan. It is noted that during the said period, the provision of Rule-3 of Cenvat Credit Rules, 2004, read with Rule-9 of Cenvat Credit Rules were sought to be applied for denying to the Cenvat Credit on the ground that TR-6 challan is not a proper document for availing Cenvat Credit. We find that Honble High Court of Bombay on 18.02.2015, while deciding the same issue in Excise Appeal No.4/2008 and others held as under:

6. In the present case, the respondents are availing facilities of CENVAT Credit for duty paid on inputs, capital goods and input services in terms of Rule-3 of the CENVAT Credit Rules, 2004. It was the contention of the appellant that the respondents have to reverse the CENVAT Credit of service tax paid on Goods Transport Agencies between the period of March, 2005 to 15.06.2005 which they did not accept. It is further the contention of the appellant that Rule-9 specified the documents on which CENVAT Credit can be availed of by a manufacturer prior to 16.06.2005. In terms of clause (e) of sub-rule (1) of Rule-9, of the Rules of 2004, a challan evidencing payment of service tax was a specified document for the purpose of availing service tax credit and the entities listed in clauses (i), (ii) and (iv) of Rule-2 of the Service Tax Rules, 1994 can take the service tax credit on the strength of such challan. But, however, in the case of Goods Transport Agency, although the recipient of the services has been made liable to pay service tax with effect from 1st January, 2005 vide Notification dated 03.12.2004, but the agency has been made eligible to take credit thereof only from 16th June, 2005, vide Notification dated 07.06.2005, by virtue of which clause (v) of sub-rule (1) of Rule-2 of the Service Tax Rules, 1994 was inserted making the recipients of Goods Transport Agency service eligible to take credit of the service tax paid on such Goods Transport Agency services. As such, it is the contention of the appellant that the respondents who have paid service tax for Goods Transport Agency services could not have taken the credit on the basis of the TR-6 challans prior to 16th June, 2005. As, admittedly, the respondents have availed of such credit during the said period, it was the contention of the appellants that the respondents were not entitled to such credit. The fact that the respondents have paid service tax and, as such, are entitled to credit during the said period has not been disputed by the appellant. As per Rule-3 of the CENVAT Credit Rules, 2004, CENVAT Credit of, inter alia, service tax liable and paid on any input services can be availed of.

7. On going through the CENVAT Credit Rules, 2004, we find that they do not prescribe any documents for availing of service tax credit during the disputed period in respect of the service tax paid on Goods Transport Agency services. The appellant, in the present case, has nowhere contended which were the specified document for availing of such credit during the relevant time. If no documents have been mentioned, TR 6 challan has to be considered as a proper document, reflecting payment of such tax. Further, it is also not the case of the appellant that service tax was not paid by the respondents or that they were otherwise not entitled to such credit.

8. The Punjab & Haryana High Court, in the case of Commissioner of Central Excise, Ludhiana V/s Ralson India Ltd. reported in 2006 (202) E.L.T. 759 (P & H) held that if the duty paid has the character of inputs and their receipt in manufacturers factory and utilization in manufacture of final product is not disputed, then the credit cannot be denied to such person. It is also to be noted that the Departments Circular dated 19th November, 2001 observes that once the duty payment is not disputed and it is found that the documents are genuine and not fraudulent, then the manufacturer would be entitled to CENVAT Credit on duty paid inputs.

9. In the present case, the authorities below have accepted that the respondents are entitled to such CENVAT Credit. The only point for consideration, in such circumstances is the type of document required to be produced to avail of such credit. The respondents have produced the TR-6 Challan which is emanated from the office of the appellants themselves to support their claim for such CENVAT Credit, which material was accepted by the authorities below whilst passing the impugned order.

10. For the aforesaid reasons, the question of discarding the said Challan to avail of such CENVAT Credit, as contented by the learned Counsel appearing for the appellant, can not be accepted. The Authorities below, as such, have rightly accepted the said challan as proof of payment of service tax and, as such, no infirmity can be found in the orders passed by the Authorities below. In any vent, the appellants are not entitled to rely upon Rule-9 to refuse the credit to the respondents, as Rule-9 is a procedural aspect which cannot deny the claim of the respondents to avail of such CENVAT Credit which they are, otherwise, admittedly, entitled to. The substantial question of law is answered accordingly.

6. In view of the authoritative judicial pronouncement (unreported) of the Jurisdictional High Court on the same issue, in favour of the assessees, we hold that the impugned order cannot be found faulty.

7. The appeal of Revenue is dismissed.

(Dictated in Court)

(Raju) Member (Technical) (Anil Choudhary) Member (Judicial)

pj

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Appeal No.E/48/07