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2015 (4) TMI 696 - KARNATAKA HIGH COURT

2015 (4) TMI 696 - KARNATAKA HIGH COURT - 2015 (324) E.L.T. 387 (Kar.) - CENVAT credit on oxygen and nitrogen gas - common procurement of gas versus Diversion of gases - integrated steel plant - Strategic Alliance Agreement - Held that:- it appears, the companies joined hands to manufacture the final products in terms of the Strategic Alliance Agreement. In the circumstances, we hold that CENVAT cannot be demanded on the ground that credit is being availed by one factory and material inputs are .....

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Tax, Bangalore Versus M/s. Biocon Ltd. [2014 (9) TMI 716 - KARNATAKA HIGH COURT] - Decided against Revenue. - CEA No. 100009/2014 - Dated:- 4-3-2015 - B. S. Patil And P. S. Dinesh Kumar,JJ. For the Appellant : Sri S C Bheema Raddi, Adv For the Respondent : None JUDGMENT Revenue being aggrieved by the order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Branch, Bangalore, in Final Order No.27216/2013 dated 30.12.2013 holding that the CENVAT credit availed by the re .....

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ng interalia that the respondent holding Central Excise Registration No. AAACM 5008 R XM 004 for the manufacture of Alloy and Non-alloy Steel Billets, Blooms and Rounds and the company M/s.Kalyani Steels Limited having entered into a "Strategic Alliance Agreement" dated 16.05.1998 for the production of steel through integrated steel plant had entered into an agreement with another company namely M/s.Hospet Steels Limited, to avail the services in the field of administration, personnel, .....

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. Such diversion of oxygen and nitrogen by the respondent, in the opinion of the appellant was in violation of the Act. 3. During the course of search operations, statements of Executives of the Companies viz., Sri C.G.Patankar, the Executive Director, Corporate Office of M/s.Kalyani Steels Limited, Sri S.B.Jhaveri, Vice-President (Finance) Corporate Office, M/s.Mukund Limited, Sri V.N.Hegde, Manager (Finance) of M/s.Hospet Steels Limited, incharge of Excise M/s.Mukund Limited, Ginigera, Sri L.B .....

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authority i.e., the Additional Commissioner, Central Excise, passed an Order-in-Original in C.No.V/72/15/76/2005 Adjn. Dated 31.07.2006 and confirmed the demand of CENVAT Credit, ordered for appropriation of the amount paid by the respondent herein and imposed a penalty on the companies as well as their Executives except M/s.Praxiar India Limited. 4. Being aggrieved by the Order in Original, four appeals were filed by the respondent, two Officers working under the respondent and an Executive wo .....

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iginal authority for requantification of the amount payable by the respondent herein. Challenging the order of CESTAT, the revenue has preferred this appeal under Section 35G of the Central Excise Act, 1944 contending that the issue involves a question of law for determination by this Court. 6. We have heard Sri Bheema Raddi, learned counsel appearing for the revenue and Sri Sangram S.Kulkarni, learned counsel appearing for the respondent. 7. Facts in this case are in a very narrow compass and n .....

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ENVAT, in addition to attracting other penal actions which the appellant could initiate against the respondent. Therefore, the question that falls for our consideration in this case is: 'Whether or not the alleged diversion of the gases and use of these gases by two companies and the CENVAT credit being availed only by the respondent herein is in violation of the Provisions of Central Excise Act and Rules?' 8. The Principal Bench of this Court had an occasion to deal with a similar case .....

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ndent herein and M/s.Kalyani Steels Limited being two different entities are using the gases indented by respondent herein. In paragraph 2 of the show-cause notice, the revenue, has referred to the Strategic Alliance Agreement dated 16.05.1998 as also the ratio in which the two companies would be manufacturing respective products. To appreciate as to what exactly the agreement defines, it is necessary to note the salient points of the agreement which are as follows: a) respondent manufactures al .....

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tegrated steel plant. 9. Admittedly, M/s.Praxiar India Limited has supplied oxygen and nitrogen in pipelines and the CENVAT credit has been availed of only by the respondent. After the visit of the Officers of the revenue, the respondent is said to have tendered the demand of duty even before the issuance of show-cause notice. Though the CENVAT credit was claimed only by the respondent, the input i.e., oxygen and nitrogen were used by both the companies. 10. The law on the point is no more res i .....

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