Gail (India) Ltd vs C.C.E.& S.Tax., Ltu, New Delhi

Arising out of the order in original No.3-5/Commr/2014-15 dated 9.5.2014 passed by the Commissioner of Central Excise & Service Tax, LTU, New Delhi.

For approval and signature:

Honble Mr. Justice G. Raghuram, President

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

GAIL (India) Ltd. .. Appellant

Vs.

C.C.E.& S.Tax., LTU, New Delhi . Respondent

Appearance:

Present Shri S.C. Kamra with Shri G.K. Mahajan, Advocates for appellant

Present Shri Amresh Jain, A.R.. for the respondent

Coram: Honble Mr. Justice G. Raghuram, President

Final Order No. 52654/2015

Per Justice G. Raghuram:

Heard the ld. Counsel for the appellant and ld. Shri Amresh Jain, A.R. for the Respondent/Revenue.

2. This appeal is preferred against the adjudication order dated 9.5.2014 passed by the Commissioner, Central Excise & Service Tax, LTU, New Delhi. The impugned order denied cenvat credit availed by the appellant, of Rs.1,30,494/- and ordered its recovery along with interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 75 of the Finance Act, 1994 but dropped penalty.

3. The appellant is an instrumentality of the Union and is in the business inter alia of supply of natural gas to industrial and other consumers. During 1.10.09 to 24.2.10, audit of the appellant revealed that the appellants Hazira unit was providing the taxable output service of supply of goods through pipeline to local consumers and others from other destinations through the Hazira, Vijaypur, Jagdishpur (HVJ), pipeline. The appellant had a compressor unit at Hazira to pump natural gas and another compressor station at Vaghodia, Vadodara. The natural gas was conveyed through pipeline to Hazira, Vijayapur, Jagdishpur and thereafter to appellants Vaghodia plant from where it is vended to industrial and other consumers. The appellants Hazira unit purchased gas from ONGC and thereafter conveyed it through Hazira, Vijaypur, Jagdishpur pipeline.

4. Audit revealed that the appellant had taken cenvat credit on the basis of invoices raised by its Vaghodia unit. On enquiry, the appellant informed the process of conveyance of gas from Hazira to its Vaghodia plant through intermediary stations viz. Vijaypur, Jagdishpur where a further process of compression and conversion into LPG occurred. On the premise that the appellants Vaghodia pumping station has given output service provided by that station to local Hazira consumers, proceedings were initiated by the show cause notice dated 4.2.2011 proposing denial of cenvat credit along with interest and penalties and directing recovery thereof. The appellant submitted its reply dated 8.3.2011 which however did not find favour with the adjudicating authority and resulted in the impugned order.

5. The appellant obtained Centralised Registration under Section 69 of the Finance Act 1994 on 25.2.2010 whereunder its head office at New Delhi its Hazira , branch as well as Vaghodia compressor station were itemized as falling under the Centralised Registration.

6. In the impugned order the ld. Commissioner (Adjudication) at para 5.12 thereof observed that the appellant had obtained Centralised Registration on 25.2.2010 which included Vaghodia compressor station and hence the appellant was entitled for cenvat credit on capital goods and input services received and used at Vaghodia compressor station on or after 25.2.2010 but not prior thereto and therefore confirmed the denial of cenvat credit and directed recovery of Rs.1,30,494/- . The fact that the appellant availed cenvat credit of this amount prior to 25.2.2010 is not in dispute. The only issue for consideration is whether the appellant is entitled to avail cenvat credit on the input service on which service tax was remitted on the basis of invoices issued by its Vaghodia compressor unit.

7. Decisions of this Tribunal in Manipal Advertising Services Pvt. Ltd. Vs. C.C.E.,Mangalore  2010 (19) STR 506 (Tri-Bang.) and Well Known Polyesters Ltd. Vs. C.C.E., Vapi  2012 (25) STR 411 (Tri- Ahmd.) , have clearly declared the principle that if a person is discharging service tax liability from his registered premises, the benefit of cenvat credit on the service tax paid by the service provider cannot be denied, only on the ground that the invoices are in the name of branch offices which were not separately registered.

8. In the light of these decisions, the impugned order is unsustainable and is accordingly quashed. The appeal succeeds. There shall be no order as to costs.

(Justice G. Raghuram))

President

scd/

(Justice G. Raghuram))

President

scd/

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