TMI Blog2016 (3) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... , we are directing to the Adjudicating Authority to examine as to whether the inputs exclusively used in the manufacture of Ship and decide the matter in accordance with law. The denial of Cenvat Credit on photo copy of the invoices, we direct the Adjudicating Authority to decide afresh after providing the report and to consider the submission of the appellant. Penalty is set aside. - Appeal No.: E/13602/2014 - Order No. A/10068 / 2016 - Dated:- 28-1-2016 - MR. P.K. DAS, MEMBER (JUDICIAL) AND MR. P.M. SALEEM, MEMBER (TECHNICAL) For the Petitioner : Shri Vishal Agarwal, Advocate, Ms. Dimple Gohil, Advocate, Shri P D Rachchh, Advocate For the Respondent : Shri J Nagori, Authorised Representative ORDER PER : MR.P.K. DAS, Heard both sides and perused the records. 2. The appellants a 100% EOU, is engaged in the manufacturing of Ship at Pipav Port. They were also rendering output service in so far as repair and refit of Ship. By the impugned order, the Adjudicating Authority denied the Cenvat Credit benefit on, Input, Input Service and Capital Goods used in the manufacture of excisable goods and Outward Service during the period from Feb. 2010 to Sept. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal. 7. The definition of input service- under Rule 2(l) of the Rules precisely covers any service used by a provider of taxable service for providing an output service, any service used by a manufacturer in or in relation to manufacture of final product and inclusive part of the definition, services used in relation to setting up, modernisation, reno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported. As regards the extent of the nexus between the input/input services and export goods/services, it must be borne in mind that the purpose is to refund the credit that has already taken by them. There cannot be different yardsticks for establishing the nexus between taking of the credit and for refund of credit. Even if different phrases are used under different rules of CENVAT Credit Rules, they have to be read in a harmonious manner. 9. The learned Advocate relied upon the decision of Honble Karnataka High Court in the case of Commissioner of Customs, Banglore Vs ANZ International - 2009 (233) ELT 40 (Kar.) where the appeal of the Revenue was dismissed. It has been held that a 100% EOU is entitled to take CENVAT credit on the duty of the inputs procured indigenously and when they are not in a position to utilise the same, they are entitled for the benefit of refund under Rule 5 of the Rules. In the present case, the Appellant stated that they have claimed the refund for the unutilised credit under Rule 5 of the said Rules. This decision of Hon'ble High Court was upheld by Honble Supreme Court as reported in 2009 (234) ELT A 16 (SC). The relevant portion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same were set aside. Therefore, we do not find that no substantial question of law does arise in this Appeal for our consideration to answer the same in favour of the Revenue. Accordingly, the appeal is devoid of merits and therefore it must fail and is dismissed. 10. In the case of Commissioner of Central Excise Vs M/s Drish Shoes Ltd - 2010 (254) ELT 417 (H.P.), the Hon ble Himachal Pradesh High Court observed that the Rule 6(6) of CENVAT Credit Rules, 2004 applies both to exempted as well as dutiable goods as term used in later is excisable goods and not dutiable goods . In that case, the question of law was whether an assessee exclusively manufacturing wholly exempted goods (chargeable to Nil rate of duty) is eligible to avail CENVAT Credit of duty paid on the inputs and input services under Rule 6(1) of CENVAT Credit Rules, 2004 used in the manufacture of such exempted goods even if such goods are exported. In that case, the Respondent was engaged in the manufacture of finished leather and it had exported the manufactured leather. The Hon ble High Court held that an assessee manufacturing the goods chargeable to Nil rate of duty is eligible to avail CENVAT Credit pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erify the said return also for confirming the correctness of such credit. 13. The Larger Bench of the Tribunal in the case of Commissioner of Customs C.Ex., Meerut-I Vs Modi Rubber Ltd - 2000 (119) ELT 197 (Tri-LB), held that the declaration filed by the Assessee in terms of Rule 57Q of Central Excise Rules, 1944 is sufficient for the purpose of extending credit on lubricants under Rule 57A of the said Rules. In the case of Commissioner of Central Excise, Coimbatore Vs Lakshmi Technology Engineering Indus. Ltd. - 2011 (23) STR 265 (Tri-Chennai), the Tribunal held that the manufacturer entitled to use the credit from a common pool to which different categories of specified excise duties, customs duty and service tax allowed to be taken as credit. Similarly, a provider of taxable service is also entitled to take credit of specified excise duty, additional duty of customs and service tax in respect of input service and utilised credit from these sources for the purpose of paying service. Rules permit taking of credit under a common pool and permit the use of the credit from common pool for different purposes and there is no restriction placed to the effect that credit accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. It is submitted that the appellant is not eligible to utilize the cenvat credit on inputs used in the manufacture of Ship and Output Service. We find that the definition of Input under Rule 2 (k) of Cenvat Credit Rules 2004 is in two parts. Clause (i) of Rule 2(k) relates to the manufacturer. Clause (iv) of Rule 2 (k) is in respect of the Output Service. We agree with the submission of the Ld. Authorised Representative to the extent that the inputs exclusively used in the manufacture of Ship, the appellants are not eligible to avail Cenvat Credit. 7. The other issue is that the availment of Cenvat Credit on the basis of photo copy of the invoices. The Ld Advocate submits that the Adjudicating Authority had proceeded on the basis of the report of the Superintendent, which was not disclosed. In our considered view, the Adjudicating Authority should provide the report to the assessee before taking decision. 8. In view of the above discussion and following the earlier order the denial of Cenvat Credit on Input, Input Service and Capital Goods for the construction of Dry Dock is set aside. Regarding the availment of Cenvat Credit on inputs, input service and capital goods fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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