Manikgarh Cement vs Commissioner Of Central Excise, Nagpur

(Arising out of Order-in-Appeal No. SN/127/NGP/2009 dated 27.4.2009 passed by Commissioner of Central Excise & Customs (Appeals), Nagpur)

For approval and signature:

Honble Mr. Ramesh Nair, Member (Judicial) ======================================================

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 :

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?

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Manikgarh Cement Appellant Vs. Commissioner of Central Excise, Nagpur Respondent

Appearance: Shri J.C. Patel, Advocate, for appellant Shri N.N. Prabhudesai, Superintendent (AR), for respondent

CORAM: Honble Mr. Ramesh Nair, Member (Judicial)

Date of Hearing: 9.3.2015 Date of Decision: 9.3.2015

ORDER NO

The appeal is directed against order-in-appeal No. SN/127/NGP/2009 dated 27.4.2009, wherein the Commissioner (Appeals) has upheld the order-in-original No. 06/DEM/CND/2008 dated 24.6.2008.

2. The issue involved in the present case is the admissibility of cenvat credit in respect of service of certification of pollution level. The lower authority has denied the cenvat credit of Rs.36,716/- on the ground that the service is rightly to be termed as certification of pollution level and the same is not finding place in the definition of services as defined under Section 65 of the Finance Act. Since the service tax was paid on the service which is not taxable, the same is not available as cenvat credit to the appellant.

3. Shri J.C. Patel, learned counsel for the appellant, submits that even though if it is accepted that the services of certification of pollution level since the service provider has paid the service tax and the Revenue has accepted the payment and not raised any dispute as regards the payment of service tax, the credit to the appellant cannot be denied. He submits that in the appellants own case for the earlier occasion, this Tribunal has allowed the credit in the following cases:-

(1) Manikgarh Cement vs. CCE, Nagpur (Order No. A/71/11/SMB/C-IV dated 2.12.2010 passed by the Tribunal).

(2) Manikgarh Cement vs. CCE, Nagpur reported in 2011 (22) STR 471 (Tri.-Mumbai).

He submits that from the above judgments in the appellants own case, the issue of admissibility cenvat credit in respect of the service in question has attained finality in favour of the appellant. Therefore, the present appeal is also liable to be allowed.

4. On the other hand, Shri N.N. Prabhudesai, learned Superintendent (AR), reiterates the findings of the impugned order.

5. I have carefully considered the submissions made by both the sides. I find that in appellants own case on the same issue, this Tribunal has allowed the cenvat credit. The extracts of the judgments are given below:-

Order No. A/71/11/SMB/C-IV dated 2.12.2010:-

2. The facts of the case are that the appellant being a manufacturer of cement availed input service credit under service category of Certification of Pollution Level. The said availment of input service credit was denied to them on the ground that the impugned service was not taxable during the impugned period. Hence the appellants are not entitled to take the credit. Aggrieved from the said order, the appellant is in appeal before this Tribunal.

6. On careful examination of the submission made by both the sides, I find that in this case the appellant has paid service tax on availment of its services against the service tax paid invoices. It is also admitted fact that whether the impugned service is taxable or not is to be decided at the end of service provider and not at the end of service receiver. In that event, if any service availed by the appellant against service tax paid invoices, the appellant is entitled to take input service credit on the same as held by this Tribunal in the case of Caborandum Universal Ltd (supra). Hence I do not find any merit in the impugned order and the same is set aside. The appeal is allowed with consequential relief. 2011 (22) STR 471:-

This appeal filed by the assessee is directed against denial of CENVAT credit on certain input services. The lower authorities, upholding the view taken in the relevant show-cause notice, held that the appellant was not entitled to avail CENVAT credit of the service tax paid on any service which was not taxable. The appellant had availed CENVAT credit on two input services, viz. (1) inspection and certification of pollution level; (2) operation and maintenance of sewage treatment plant. The authorities held that these services were not taxable services and, therefore, CENVAT credit of the service tax paid thereon was not admissible to the appellant. Hence the present appeal.

4.?After considering the submissions, I find that the appellants case is squarely covered by some of the decisions cited by the learned counsel. The ratio of the decision in Mahaveer Surfactants (P) Ltd. (supra), which relates to input-duty credit, is also applicable to the present case. It is not in dispute that the services in question were tax-paid and were used as input services by the appellant. The appellant was very much within their right to claim CENVAT credit of such tax. The Revenue has no case that the services in question were not covered by the definition of input service under Rule 2(l) of the CENVAT Credit Rules. In this scenario, credit of the amount of service tax paid on these services by the service provider would be admissible to the appellant under Rule 3(1) of the CENVAT Credit Rules. The impugned order is set aside and the appeal is allowed.

6. From the above judgments, it is clear that the issue involved in the present case has been dealt by this Tribunal and held that cenvat credit in respect of services of certification of pollution level is admissible, even though the service in the hands of service provider is not taxable but the service tax was admittedly paid by the service provider.

7. In view of the above position, I am of the considered view that the impugned order is not sustainable and hence the same is set aside. The appeal is allowed.

(Operative part pronounced in Court)

(Ramesh Nair) Member (Judicial)

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