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2016 (5) TMI 271 - CESTAT ALLAHABAD

2016 (5) TMI 271 - CESTAT ALLAHABAD - 2016 (43) S.T.R. 594 (Tri. - All.) - Cenvat Credit - Procurement of molasses - Availed Cenvat credit on the duty paid on inputs and capital goods and service tax paid on input services - procured inputs for their distillery unit, being molasses, the main raw material - as per agreement service providers were appointed for performing liason works for the appellant to get allotment of molasses from the office of the Excise Commissioner and Controller of Molass .....

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e as defined in Rule 2(l)(ii) of CCR, 2004. Accordingly, it is found that the ld. Commissioner (Appeals) have erred in observing that the service provider have only obtained the permit to procure molasses but not the molasses which is the actual raw material. Accordingly, the impugned order is set aside. - Decided in favour of appellant with consequential benefit - S.T. Appeal Nos.50716,50717/15 - Final Order Nos. A/70115-70116/2016-SM - Dated:- 11-3-2016 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) .....

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n input services. The appellant regularly filed ER-I returns. During the period in dispute February, 2011 to August, 2011, the appellants have procured inputs for their distillery unit, being molasses, the main raw material. For procurement of the same, they have incurred service charges. The service provider charged service tax which was paid and Cenvat credit taken. SCN was issued as it appeared to revenue that credit on such is not allowable, accordingly, it was proposed to disallow the amoun .....

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t between the parties, it is apparent that service providers were appointed for performing liason works for the appellant to get allotment of molasses from the office of the Excise Commissioner and Controller of Molasses, Allahabad. The service of liason work provided by the said service providers to the appellant is not a taxable activity under service tax net. It was also observed that the so called contract for the liaisoning work for procurement of molasses at a consideration of ₹ 36/R .....

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r for any purpose of industrial development may apply in the prescribed manner to the controller specifying the purpose for which it is required. Sub-section (2) provides on receipt of an application under sub-section (1) and after making such inquiry in the matter as he may think fit, the Controller may make an order under section 8 subject to considerations like, (i) the general availability of molasses ; (ii) various requirements of molasses ; (iii) the better utilization to which molasses m .....

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upier of any sugar factory to [Transfer or sell or supply] in the prescribed manner such, quantity of molasses to such person, as may be specified in the order, and the occupier shall, notwithstanding any contract, comply with the order. Further Section 8 that (1-a) provides - Notwithstanding anything contained in Sub-Section (1) the occupier of a sugar factory shall sell or supply forty per cent of the molasses produced in each quarter of a molasses year in the sugar factory to such chemical in .....

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our an order under Section 8 of the Act, has been made for the purposes of purchase of molasses, or to whom molasses for captive consumption has been transferred or supplied, from the occupier of a sugar factory. Further, Rule 8 of the said Rules provides that (1) The Controller may specify the order in which storage tanks in a factory shall be filled or emptied and such direction shall be binding on the occupier of the sugar factory. Sub-rule 8 (2) further provides that  No molasses produced o .....

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rial development. Further Rule 25 provides that No molasses including the molasses for captive consumption, shall be removed from the premises of a sugar factory until it has been weighed or measured and a pass in Form M.F.4 has been issued. This pass shall be issued in pentuplicate by the occupier of the factory or by an officer authorized by the Controller in this behalf. 4.2 The ld. Counsel stated that from the provisions of the State Govt. Act and Rules for molasses, it is evident that even .....

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Department and have charged service tax on the service amount as agreed and accordingly, the appellants have rightly taken the Cenvat credit. 4.3 The ld. Counsel also points out that from the definition of input service given in rule 2 (l) in clause (ii) of CCR, 2004, the inclusive part of the definition, procurement of input is also a service eligible for Cenvat credit. Clause (ii) further provides that the manufacturer who uses input service whether directly or indirectly in or in relation to .....

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ther instance, molasses which have been allotted from one, M/s Govind Sugar Mills Ltd. to the appellant, vide allotment order dated 21/2/11, to be transported through road by truck/tanker. 4.4 The ld. Counsel also relies on the ruling of the Division Bench of this Tribunal in the case of ITC Ltd. versus CCE, Hyderabad : 2010 (17) STR 146 wherein the assessee had taken credit of service tax on services used for Plantation activity. Under the fact that ITC is manufacturing paper, from trees, being .....

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