M/S.Bhagwati Power & Steel Ltd vs Cce & Customs, Raipur

[Arising out of Order-in-Appeal No.174/RPR-I/2014 dated 30.07.2014 dated 30.07.2014 passed by the Commissioner (Appeals), Central Excise, Raipur-I]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1 Whether Press Reporters may be allowed to see 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 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?

M/s.Bhagwati Power & Steel Ltd. Appellant

Vs.

CCE & Customs, Raipur  Respondent

Present for the Appellant : Shri Manish Saharan, Advocate

Present for the Respondent: Smt. Kanu Verma Kumar, JCDR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 14.09.2015

FINAL ORDER NO. 54065/2015

PER: S.K. MOHANTY

This appeal is directed against the impugned order dated 30.07.2014 passed by the Commissioner (Appeals), Central Excise & Customs, Raipur-I, wherein denial of cenvat credit of Rs.52,547/- and equal amount of penalty imposed in the adjudication order, have been upheld. The facts of the case leading to this present appeal are that the appellant during the disputed period had availed input service credit towards service tax on full value of crushing charges paid for the entire crushing quantity of iron ore to M/s.Baldev Alloys Private Limited and M/s. Hera Industries Limited. The contention of the Department is that out of 7782.100 M.T. of iron ore, 5523.990 M.T. of iron ore was received by the appellant for use in or in relation to manufacture of sponge iron. Since there is a short receipt of 2258.110 M.T. of iron ore, the Department took a view that the appellant is not eligible for cenvat credit attributable to the input service on the said shortage quantity. The show cause notice issued in this regard culminated in the adjudication order dated 31st March, 2014, wherein the proposals made in the show cause notice was confirmed. In appeal the Commissioner (Appeals) also upheld the adjudication order. Hence the present appeal is before this Tribunal.

2. Shri Manish Saharan, the ld. Advocate appearing for the appellant submits that Rule 3 of the Cenvat Credit Rules, 2004 is the enabling provision, which entitles a manufacturer to take cenvat credit of input service received by the manufacturer. He submits that the service provided by the service providers has not been disputed by the Department as an input service, and as such denial of cenvat benefit is not maintainable.

3. Per-contra, Mrs. Kanu Verma Kumar, the ld. JCDR appearing for the respondent reiterates the findings recorded in the impugned order and submits that confirmation of service tax demand is in conformity with the cenvat statute.

4. I have heard the ld. Counsels for both sides and perused the records.

5. The crushing charges charged by the job workers are confirming to the definition of input service. Further, the said service having been received by the appellant and duly accounted for, based on the valid service tax invoice, the statutory requirements contained in the cenvat statute had been duly complied with for taking the cenvat credit. Further, I find that there is no stipulation or embargo created in the cenvat statute in dealing with such an event for denial of cenvat benefit. Therefore, I am of the considered opinion that denial of cenvat credit is not in conformity with the Cenvat Credit Rules. As such, the impugned order is set aside. The appeal is allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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