TMI Blog2013 (8) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant manufactures exempted goods, that would be no justification to disallow to it the benefit of availing of Cenvat credit on that quantity of input service which is utilised in or in relation to the manufacture of dutiable final products - Crude oil which is subject to a further process of manufacture at the Uran plant for the production of dutiable final products is exempted from central excise duty. ONGC admittedly also produces dutiable final products. The production of those dutiable products is possible only on the continuous supply of crude oil. Held that:- The credit of Service Tax taken with respect to services availed on the platforms cannot be disallowed for the services availed with respect to dutiable exempted goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and associated gases extracted from other oil fields of Mumbai Shore are called Sweet Crude/Gases as it does not contain H2S and CO2 and are being processed at Uran Plant of ONGC. The raw crude oil extracted from oil wells other than Bassein Satellite were also delivered to buyers from the platforms through the tankers. That Sour gas received from Bassen and Satellite Gas Wells is brought to Hazira Plant of ONGC for removal of H2S and CO2 before it becomes salable. It was emphasized that two process field platforms namely BPA and BPB located in Bassein and Satellite gas fields deal with sour gas only and no gas containing H2S and CO2 is sold from these processing platforms. 2.1 That the appellants are manufacturing both the dutiable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R., on the other hand, argued that even if it is accepted that no sales of Sour gas is effected at Basse in and Satellite platforms, it cannot be said that the ISD certificates issued to Hazira Plant for taking credit do not contain the element of credit of services taken by the ISD headquarters with respect to services used in the production/manufacture of exempted final products. 4. After hearing both the sides for some time and perusal of the records, it is observed that the issue of admissibility of CENVAT Credit on the input services utilized at Bombay Offshore platforms has been decided by Mumbai High Court in the case of ONGC as per order dt.01.03.2013 reported at 2013-TIOL-202-HC-MUM-ST. Para 14 and 17 of this judgment are relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... input service is cast in broad terms. The expression input service means any service used by the manufacture, whether directly or indirectly or in or in relation to the manufacture of final products. It is impossible to accept the hypothesis that would assert, that input services that are utilized by the Appellant in or in relation to the process of manufacture that takes place at Mumbai Offshore is not a service that is used by the manufacturer in or in relation to the manufacture of dutiable final products. The dutiable final products that are manufactured by the Appellant at its Uran plant are fundamentally premised upon the manufacturing process which commences at Mumbai Offshore. There can be no manner of doubt that the input serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble final products. The production of those dutiable products is possible only on the continuous supply of crude oil. We, however, clarify that as a manufacturer of both dutiable and exempted goods, the Appellant would be required to comply with the discipline and rigour of rule 6 and would be entitled to take Cenvat credit only on that quantity of input service which is used in the manufacture of the ultimate dutiable product. We accordingly answer question (a) in the negative. 5. From the above law laid down by Bombay High Court in the case of appellant s unit at Uran, the credit of Service Tax taken with respect to services availed on the platforms cannot be disallowed for the services availed with respect to dutiable exempted goods. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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