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2015 (12) TMI 1491 - CESTAT NEW DELHI

2015 (12) TMI 1491 - CESTAT NEW DELHI - TMI - Denial of CENVAT Credit - Credit on short receipt of iron ore - Held that:- Appellant has availed input service tax credit in respect of crushing of raw materials/iron ore which was supplied to the service provider/job worker for the process of crushing. After crushing some portion becomes waste/unfit for use in manufacture of final products. The remaining portion is received back in the factory and used in manufacture of final products. According to .....

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Further, Rule 3(5) of Cenvat Credit Rules ,2004 speaks about inputs and capital goods and does not mention input service. - denial of credit is unsustainable. In the result, the impugned order, is set aside - Decided in favour of assessee. - Appeal No. E/50164/2015-SM - Final Order No.53237/2015 - Dated:- 26-10-2015 - Smt.Sulekha Beevi C.S., Member (Judicial) For the Petitioner : : Shri Manish Saharan, Advocate For the Respondent: Shri R.K.Mishra, AR ORDER Per: Sulekha Beevi C.S. The appellant .....

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y 14915.69 MT of iron ore for use in the manufacturing of their finished goods as some quantity after crushing results in waste which is not usable in the manufacture. The department observed that there is shortage of 6063.23 MT of iron ore from the job worker and this quantity has not been used in the factory of the appellants for manufacture of final products. Therefore that the service tax credit with regard to the quantity on short receipt of iron ore is not admissible. A show cause notice r .....

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make raw materials into iron ore lump suitable for manufacture, the appellant sends the raw material to job worker. The job worker crushes the entire raw material and sends back the iron ore lumps suitable for manufacture to the factory of the appellant. The job worker receives charges for service of crushing the iron ore and service tax is also paid by the appellant. The appellant then availed credit of service tax paid on the input services. During the process of crushing some portion turns o .....

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der. He submitted that the entire quantity of raw materials sent for job work is not received back in the factory of the appellant for manufacture of final products. Therefore, the input service tax credit which pertained to short receipt of quantity of 6063.23 MT of iron ore is not admissible to the appellants in terms of Rule 3(5) of Cenvat Credit Rules, 2004. He relied upon the decision in Mukund Limited vs. CCE, Mumbai-III-202 (150) ELT 168 (Tri.Mum.). 4. Heard both sides and perused the rec .....

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fit for use in manufacture. This view of the Revenue does not appear to be convincing. It is not in dispute that in the process of crushing of iron ore, some quantity of iron ore changes to waste unfit for use in manufacture. It is impossible for the appellant to segregate and ascertain how much quantity would turn out to be waste or unfit for use in manufacture in the process of crushing. The segregation of the quantity unfit for manufacture happens only after the process of crushing. The appel .....

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