M/S Ambuja Cement vs Commissioner Of Central Excise

[ Arising out of OIO-01/BVR/COMMR/2007 dtd 11.1.2007 Passed by Commi-ssioner of Central Excise-BHAVNAGAR ]

M/s Ambuja Cement - Appellant(s)

Vs

Commissioner of Central Excise-

BHAVNAGAR - Respondent (s)

Represented by For Assessee : Shri Jigar Shah, Chartered Accountant For Revenue : Shri L Patra, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

1

Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

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

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Honble Member (Technical)

Date of Hearing / Decision : 14/7/2015

ORDER No. A/11245 / 2015 dtd 14/7/2015

Per : Mr.P.K. Das,

The relevant facts of the case, in brief, are that M/s. Ambuja Cements (unit of Gujarat Ambuja Cements Ltd) that appellant, herein were engaged in the manufacture of excisable goods viz., Cement and Clinker classifiable under Chapter 25 of the Schedule to the Central Excise Tariff Act 1985 and availing cenvat credit on inputs, capital goods and input service in terms of Cenvat Credit Rule 2004. A show cause notice dtd 30.3.2006 was issued proposing to deny cenvat credit of Rs 18,26,378/- alongwith interest and to impose penalty for the period from April 2005 to October 2005. By the impugned order, the Adjudicating Authority confirmed the denial of cenvat credit alongwith interest and also imposed penalty of Rs 10,000/- on the appellant.

2. The Learned Advocate on behalf of the appellants drew the attention of the Bench, the nature of service and demand of cenvat credit as under:-

Sr No Nature of Services received Amount of CENVAT credit taken

Service Tax (in Rs) Edu. Cess (in Rs.) 1 Goods Transport Agency services for outward transportation. 10,55,747 21,131 2 Services received at Mul-Dwaraka Jetty viz., Port Services, Clearing and Forwarding, Maintenance & Repairs, Consulting Engineer, Foreign Technician, Technical and Testing Analysis, Security, Photography, Steamer Agent, Telephone, Tour Operator etc. 7,04,315 14,074 3 Mobile Telephone Services.

28,055 561 4 Photography Services.

1,866 37 5 Pandal Shamiana.

580 12 Total 17,90,563 35,815

3. He submits that in view of the decision of Honble Gujarat High Court in the case of CCE vs. Parth Poly Wooven Pvt Ltd [2012(25) STR. 4(Guj.)], denial of cenvat credit on GTA services cannot be sustained. He further submits that the input service credit availed on the basis of ISD invoices, issued by their another unit M/s GujAmbuja Cement, Mul Dwarka cannot be denied for the reasons that the jetty was used for export of the goods. It is submitted that GajAmbuja Cement Muldwaraka registered as ISD by the Central Excise Dept at Rajkot, which is another unit of the appellant company. He relied upon the decision of the Honble Karnataka High Court in the case of CCE vs Ecof Industries Pvt Ltd [2011(23) STR.337(Kar.)] and the decision of the Tribunal in the case of Castrol India Ltd vs CCE [2013(291)ELT.469 (Tri.Ahmd.)]. The Adjudicating authority observed that input service credit on these issues were received and used beyond the place of removal and after completion of the manufacturing and clearance of the final product from the factory gate. In this context, the Learned Advocate drew the attention of the Bench the relevant portion of the decision of the Honble Karnataka High Court in the case of Ecof Industries Pvt Ltd (supra).

4. On the other hand, the Learned Authorised Representative on behalf of the Revenue reiterates the finding of the Adjudicating authority. He submits that GajAmbuja Cement, Muldwaraka is an independent unit registered with the CE authorities and therefore they are not eligible to issue ISD invoice to the appellant company. He further submits that M/s GajAmbuja Cement, Muldwaraka is different from the appellant company.

5. After hearing both the sides and on perusal of records, we find that the Larger Bench of the Tribunal in the case of ABB Ltd vs Commissioner [2009(15)STR.23] held that the goods transport agency service used for transportation of finished goods upto the service place of delivery of the buyer, would be eligible for input service credit. The Honble Karnataka High Court upheld the decision of the Larger Bench of the Tribunal and restricted credit upto 1.3.2008. We find the Honble Gujarat High Court in the case of Parth Poly Wooven Pvt Ltd (supra) has also taken the same view of the decision of the Honble Karnataka High Court and dismissed the appeal filed by the Revenue. Hence, the denial of cenvat credit on GTA services cannot be sustained.

6. The denial of cenvat credit on the basis of ISD invoice issued by the Gajambuja Cement Muldwaraka, the contention of the Revenue is that they are a separate unit. On perusal of the records, we find that the Asstt. Commissioner of Service Tax, Bhavnagar Division, has issued certificate of Registration ISD to M/s GujAmbuja Cements Muldwaraka (a unit of Gujarat Ambuja Cements), Ambujanagar, Dist. Junagadh. In the present appellant M/s Amuja Cement is also unit of Gujarat Ambuja Cement Ltd. Hence, the appellant had rightly availed the credit on the basis of ISD invoices issued by the GajAmbuja Cement Muldwaraka. The Tribunal, in the case of Castrol India Ltd (supra) held that the admissibility of credit as such, should have been raised on the basis of ISD invoice needs to be raised at the end of ISD and not at the recipient unit level. Hence, denial of cenvat credit on this issue is not sustainable.

7. Regarding the denial of credit on other issues, the main contention of the adjudicating authority is that the services were used beyond the place of removal. We find that the Honble Bombay High Court in the case of Deepak Fertilizers and Petrochemicals Corpn Ltd., vs CCE [2013(32)STR. 532 (Bom.)] held that definition under Rule 2(l) of the Cenvat Credit Rule 2004 is not restricted to input services used only for procurement and inward transportation of inputs. It was also more so as this broad and comprehensive meaning had to be read with Rule 2(i). In the present case, there is no material available that the services were not used in relation to the business of the appellant. So, we do not find any reason to deny input service credit.

8. In view of the above discussion the impugned order cannot be sustained. Acordingly, it is set aside. The appeal filed by the appellant is allowed.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial)

swami ??

??

??

??

2