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Mahanagar Gas Ltd. Versus Commissioner of Central Excise, Mumbai II

2015 (11) TMI 467 - CESTAT MUMBAI

Denial of Cenvat credit - services received for training of persons in dispensing of CNG in retail outlets - Invocation of extended period of limitation - Held that:- Dispensing activity of CNG in the retail outlet is undertaken by personnel who are the employees of service provider and not of appellant. This service provider is discharging service tax under the category of business auxiliary services; Cenvat credit availed by the appellant is of the service tax paid on the services rendered for .....

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ona fide belief that having paid for the training of personnel, they can avail the Cenvat credit of the service tax paid and I do not see any element of suppression or misstatement of facts on the part of the appellant that too with intent to evade duty in a situation as is in this case. Entertaining a bonafide belief of availment of Cenvat credit of the service tax paid that too, when assessee pays for such services, is a rational interpretation that would be taken by any assessee, in a situati .....

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order is set aside - Decided in favour of assessee. - Appeal No. E/87303/13- Mum - Dated:- 23-6-2015 - Mr. M.V. Ravindran, Member (Judicial) For the Petitioner : Ms. Padmavati Patil, Advocate For the Respondent : Shri N.N. Prabhudesai, Supdt. (AR) ORDER This appeal is directed against order in appeal number US/97/M-II/2013 dated 28.03.2013. 2. The relevant facts that arise for consideration are that appellant during the period March and April 2009 availed Cenvat credit of an amount of ₹ 1, .....

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the fact on the part of appellant. The show cause notice was contested on merits as well as on limitation. The adjudicating authority after following the due process of law confirmed the demands raised along with interest and also imposed equivalent amount of penalty. Aggrieved by such an order, an appeal was preferred to the first appellate authority. By the impugned order the first appellate authority has rejected the contentions raised by the appellant, upheld the order of confirmation of dem .....

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s undertaken by the appellant. It is submission that the business of dispensing CNG is being highly hazardous, safety of the personnel and the dispensing outlet was one of the prime consideration, which required specialised technical training. It is her submission that such training was imparted by one of the service providers and the charges for such training were paid by the appellant, in support of which, she produces invoice for the month of August 2008. It is the submission that the personn .....

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he appellant has outsourced the activity of vending/dispensing of CNG at various outlets and the service providers charge service tax under business auxiliary services to the appellant. It is his submission that the training activity which is undertaken is of the staff who are dispensing the CNG and are not the employees of appellant. He would then take me through the definition of the input service as is enshrined in rule 2(l) of Cenvat credit rules 2004. It is his submission that the services .....

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business requires integral connection between the activity and the business of manufacturing of final product. Since the final product, CNG, in this case is already manufactured at the time of dispensing the same, the services rendered for training of the personnel has nothing to do with the business activity of the appellant. He would also rely upon the judgement of Honourable High Court of Bombay in the case of Ultratech cement Ltd (supra) for the proposition that activities in relation to bus .....

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s were filed. 6. Heard both sides and perused the records. 7. The issue involved in this case is regarding the denial of Cenvat credit of the service tax paid on the services received for training of persons in dispensing of CNG in retail outlets. 8. It is undisputed that the dispensing activity of CNG in the retail outlet is undertaken by personnel who are the employees of service provider and not of appellant. This service provider is discharging service tax under the category of business auxi .....

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he service provider Cenvat credit can be availed by such service provider and not any other assessee. The said ratio will apply in this case also , accordingly the appeal on merit fails. However on limitation, I find that appellant has a strong case in his favour. As already recorded hereinabove, that the appellant had availed Cenvat credit on the months of March and April 2009, the said availment of credit has been informed to Department when they filed monthly returns. In my considered view, a .....

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