2023 (9) TMI 297 - CESTAT AHMEDABAD

CENVAT Credit - steel materials such as Steel Plates, HR Plates, Angles, Channels etc. - providing output services such as Port service, Cargo Handling Service, Supply of Tangible goods for use - denial on the ground that the material on which the Cenvat credit was claimed were not used directly for providing of any taxable service - HELD THAT:- The issue that any material used for making some equipment or building and in turn that equipment and barge is used for providing output service, material which were used shall be treated as input in terms of Rule 2(k) of Cenvat Credit Rules, 2004.

On this very issue, much water has flown and even in the identical facts in the case of M/S. SHREEJI SHIPPING SERVICES INDIA LIMITED, M/S. KRISHNARAJ SHIPPING CO. LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, RAJKOT. [2018 (7) TMI 2319 - CESTAT AHMEDABAD] has held that steel material used for repair of barges are admissible for Cenvat credit.

Thus, the issue is no longer res-integra accordingly any material used for construction of building or fabrication of any equipment which is in turn used for providing output taxable service, on the material so used, the credit is correctly admissible. Therefore, considering the settled legal position on the issue in hand, the impugned order is not sustainable, hence the same is set-aside.

Enhancement of penalty - HELD THAT:- As regards the Revenue’s appeal, since it is only for enhancement of penalty which is nothing but consequential to confirmation of demand and when demand itself is not sustained there is no question of penalty. Hence the Revenue’s appeal has no substance accordingly the same is liable to be dismissed.

The assessee’s appeal is allowed and Revenue’s appeal is dismissed.