TMI Blog2018 (9) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... AVINDRAN 1. This appeal is directed against the Order-in-Appeal No. HYD-EXCUSMD- AP2-056-17-18 dated 15.09.2017. 2. The relevant facts that arise for consideration are, the appellants are engaged in manufacturing paper quality products, organic compounds and water treatment chemicals falling under Chapters 29 38 of Central Excise Tariff Act, 1985. They registered with the Central Excise Department vide CER No.AADCC0379GXM001. They also registered with the Service Tax vide STR No.AADCC0379GSD001. The appellant is deemed manufacturer by virtue of Chapter Note 10 to Chapters 29 38 of Central Excise Tariff Act, 1985 wherein Packing re-packing / Labelling re-labelling amounts to manufacture. As per the said chapter note read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture the goods only for the appellants and they maintain confidentiality of the technical information what they received from the appellants. 5. The accounts of the appellant was audited by the authorities and objections were raised as regards availment of CENVAT credit of service tax paid by the appellant to M/s Solute on the ground that the said CENVAT credit is ineligible being an amount paid as Royalty charges for technical knowhow which was raised by M/s Srivilas for manufacturing final products. Show cause notice was issued for the demand / reversal of such CENVAT credit. The appellant contested the show cause notice on merits and also on limitation. The adjudicating authority after following due process of law, confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly time barred as they have taken the credit on 2011, 2012 2013, while show cause notice was issued in September, 2015. He submits that there is no suppression of fact nor there can be allegation that it was intent to evade duty, and they were under bonafide belief that they are eligible to avail CENVAT credit of service tax paid on royalty charges. 7. Learned departmental representative on the other hand submits that the availment of CENVAT credit of the services rendered by M/s Solute would be available only for the manufacturing of final product which was done so by M/s Srivilas. It is his submission that once finished goods are manufactured by the technology procured on payment of service charges, the question of availing CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that finished goods manufactured out of the technology procured by appellant was marketed by the appellant after retail pack would itself mean that appellant entertained a bonafide belief that they are eligible for CENVAT credit of service tax paid as it is used in relation to the manufacture of final products. It is also undisputed that appellant had declared the availment of such CENVAT credit to the authorities in the monthly returns which would mean that department was aware of the same in the year 2011-13 when the returns were filed. The revenue authorities are not contesting that the service tax liability has not been paid or they are not required to pay the tax. In my view, if the revenue is not contesting the service tax paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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