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M/s. Blue Star Limited Versus The Commissioner of Central Excise, Customs & Service Tax, Cochin

2017 (11) TMI 887 - CESTAT BANGALORE

CENVAT credit - services provided to Special Economic Zone - C & F Agent services - denial on the ground that it has been entirely used for trading activity? - Held that: - Hon ble High Court of Madras in the case of M/s. Ruchika Global Interlinks vs. CESTAT & CCE [2017 (6) TMI 635 - MADRAS HIGH COURT] has clearly held that for trading activity, appellant is not entitled to the CENVAT credit of service tax - the CENVAT credit of service tax paid on trading activity carried out by the appellant r .....

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tional issue and therefore, the penalty under Section 78 on the appellant dropped. - Appeal allowed in part. - ST/21693/2015 - 22793/2017 - Dated:- 15-11-2017 - Shri S. S. Garg, Judicial Member Mr. S. Sarkar, CA For the Appellant Mrs. Kavitha Podwal, AR For the Respondent ORDER Per : S.S. GARG The present appeal is directed against the impugned order dated 23.3.2015 passed by the Commissioner (A), whereby the Commissioner (A) has modified the Order-in-Original and denied the CENVAT credit us .....

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ransport of Goods by Road". They are availing exemption under Notification No.4/2004-ST dated 31.3.2004 for the services provided to the units under SEZ. The appellants were availing CENVAT Credit on input services used for providing taxable services, such as telephone, courier, advertisement, maintenance and repair, C & F agents, etc. The input services on which, the CENVAT credit taken have not exclusively been used for providing taxable output service. It was also observed that the a .....

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g 20% of the amount payable on taxable output services. The C & F service provided by the appellant is used in relation to trading activity being an exempted service and hence the credit taken was held as inadmissible. Based on the above findings, the excess credit availed and utilised by them was disallowed and demand confirmed with appropriate interest. Penalty under Rule 15(3) of the CENVAT Credit Rules, 2004 and under Section 76 and 78 of the Finance Act, 1994 have also been imposed. Agg .....

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mitted that as per Section 51 of SEZ Act, 2005 the provisions of the Act shall have effect not withstanding anything inconsistent therewith contained in any law for the time being in force or in any instrument having effect by virtue of any law by this Act". Thus, SEZ has an overriding effect on provisions contained in any other Act. He also submitted that as per the Notification No.3/2011 dated 1.3.2011, Rule 6 of CENVAT Credit Rules was amended and after Rule 6(6) of CENVAT Credit Rules, .....

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d input services used in relation to providing of services to SEZ Unit/Developer of SEZ. In support of his submission, he relied upon the following decisions: Tata Consulting Engineers Ltd. Vs. CST, Mumbai: 2014 (33) STR 655 (Tri.-Mum.) Sobha Developers Ltd. Vs. CCE, Bangalore : 2012 (276) ELT 214 4.2 He also referred to Larger Bench decision in the case of Sterlite Industries (I) Ltd. Vs. CCE: 2005 (183) ELT 353 (Tri.-LB) which was upheld by the Hon ble Bombay High Court reported in 2009 (244) .....

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e appellant is that trading activity is not an exempted activity and instead it is an activity related to the business of the manufacturer for which CENVAT credit is available to the manufacturer and it cannot be denied. He further submitted that the service of AFL Pvt. Ltd. is also used for storage of spare parts which are used / consumed during rendering of repairs and maintenance service by the appellant. He also submitted that the position of law prevailing during the relevant period and tha .....

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ission, he relied upon the decision in the case of Vijayanand Roadlines Ltd. Vs. CCE reported in 2007 (7) STR 219 (Tri.-Bang.) and Krishna Auto Sales Vs. CCE: 2015 (40) STR 1121. He also submitted that there is no methodology prescribed for computation/restriction of credit when trading is an activity carried out by same entity which provided taxable service. He also submitted that the trading activity cannot be equated with exempted goods or exempted services used in the manufacture or providin .....

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