TMI Blog2019 (12) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has not explained whether the said input service is in respect of ship or goods - HELD THAT:- The registration requirement was only procedural and could not be made ground to deny credit distribution. Even otherwise also the Appellant unit has taken registration for input service distribution w.e.f 21.02.2008 - even for the subsequent period the Appellant unit was allowed credit by the revenue in adjudication proceedings and the revenue did not challenged said findings. Further when the grinding unit has surrendered the benefit under Notification No. 39/2001 - CE, there is no reason to deny credit to the Appellant unit in terms of Rule 7 of Cenvat Credit rules, 2004 - credit allowed. CENVAT Credit - input services - port service, wharfage - dredging services - Misc. services - nature of service not known - manpower service in respect of Jetty - denial of manpower service on the ground that not available as it has got no connection with the manufacture of final product - telephone and mobile services - denial on the ground that it cannot be established that the mobile phone are used for manufacturing operations conducted by clinker unit and the landline phones installed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oading work, cement stevedoring and cargo handling work, cement vessel operation at Kandla and wharfage and DLB Charges, Advertisement of cement in print media are related to grinding unit - HELD THAT:- Credit allowed placing reliance in the case of C.C.E. INDORE VERSUS M/S. KRITI INDUSTRIES (I) LTD. [ 2017 (1) TMI 382 - CESTAT NEW DELHI] - credit allowed. CENVAT Credit - credit denied in respect of service tax paid by the service provider which is more than prescribed 10.2% - HELD THAT:- The assessment at the end of the service provider has not been challenged. The Appellant has paid the amount of service tax charged to them. In such case, the credit cannot be denied to them - Credit allowed. Appeal allowed - decided in favor of appellant. - E/41-42, 45, 821-822, 853/2009 E/ 650/2008, E/999/2007, E/930/2011 - A/12344-12352/2019 - Dated:- 12-12-2019 - MR. RAMESH NAIR MEMBER (JUDICIAL) AND MR. RAJU MEMBER (TECHNICAL) Shri. Anand Nainawati and Shri. Jigar Shah, Advocate for the Appellant Shri. T.G. Rathod, Joint Commissioner (AR) for the Respondent ORDER The present appeal Nos. E/41-42 45 of 2009, E/650/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power so produced is supplied not only to clinker unit but also to grinding unit and residential colonies of Appellant and office. (ix) Credit on services of Inspection of cement, sampling and analysis work for cement, clinker cement testing, cement packing loading work, cement stevedoring and cargo handling work, cement vessel operation at Kandla and wharfage and DLB Charges, Advertisement of cement in print media are related to grinding unit and hence the credit is not available to Appellant. (x) the Appellant has availed credit in respect of service tax paid by the service provider which is more than prescribed 10.2% for an amount of ₹ 5,66,671/-. 2. The appeal No. E/45/2009 has been field by revenue towards disallowing credit of ₹ 16,29,309/- on dredging services. 3. Shri. Anand Nainawati Shri. Jigar Shah, Learned Counsel appearing for the Appellant submits that at the relevant time the Appellant had two units namely clinker unit and grinding unit. The clinker unit clears the clinker on payment of duty to grinding unit which in turn manufactures cement from clinker. The grinding unit were availing exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e common for both units. The issue is covered by Hon ble High Court judgment in case of Coca Cola India Pvt. Ltd. 2009 (15) STR 657 (BOM) that credit of advertisement services cannot be denied. 4.1 He also submits that the clinker unit has actually performed as job worker of Grinding division and the issue of credit eligibility is settled in their own case by the tribunal s order as reported 2014 (302) ELT 564 (TRI) wherein it was held that the electricity supplied to clinker unit can be taken as supply to job worker. The ld. Counsel also submits that once entire benefit of notification No. 39/2001 CE dt. 01.03.2001 was surrendered, the distribution of credit to clinker unit cannot be denied. He relies upon Tribunal order in case of Pioma Industries 1995 (77) ELT 424 (TRI) and Orissa Cement Ltd. Vs. State of Orissa AIR 1991 SC 1676. The whole exercise is revenue neutral as the cenvat credit of input service is made eligible on grinding unit than in view of the legislative changes the entire amount is refundable in cash. Also that the goods manufactured during the period where benefit of notification No. 39/2001 CE was availed were not exempted goods as the duty was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e services being availed by the grinding unit, the Appellant clinker unit is not eligible for cenvat credit. The impugned orders also deny credit on ground that the services are not eligible as input service, since not used in relation to manufacture by clinker unit. 6.1 We are not in agreement with the analogy that credit is not available as the goods during the material time were cleared under the exemption Notification No. 39/2001 CE dt.31.07.2001. Once the exemption benefit stands surrendered by the Appellant they are eligible for the benefits available to them. Even otherwise we find that there is no bar to avail cenvat credit on input and input services if the goods are being cleared under the exemption supra. Further the exemption benefit was only to the extent of refund of duty paid in cash and hence there is no reason to label the goods as exempted goods. The units availing the exemption in question were very much eligible to avail credit. However once the exemption benefit stands surrendered Ab-Initio, the unit very well become eligible for the credit. Obviously in such case the input credit was available to be distributed in terms of Rule 7 of Cenvat Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed the cenvat credit by holding as under: 5. Rule 7 pertains to manner of distribution of credit by input service distributor. At the relevant time, this Rule 7 permitted input service distributor to distribute Cenvat credit in respect of service tax paid on the input service to its manufacturing units or units providing output service, subject to the two conditions, viz. :- (a) the credit distributed against a document referred to in rule 9 does not exceed the amount of service tax paid thereon; (b) credit of service tax attributable to service [used by one or more units] exclusively engaged in manufacture of exempted goods or providing of exempted service shall not be distributed; 5.1 It was only later on that additional condition by way of Clause (d) to Rule 7 was added, which reads as under : - credit of service tax attributable to service used by more than one unit shall be distributed pro rata on the basis of the turnover of such units during the relevant period to the total turnover of all its units, which are operational in the current year, during the said relevant period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this type arise in actual practice. For instance, there are cases where a Court comes to the conclusion that the termination of the services of an employee is invalid, yet it refrains from giving him benefit of reinstatement (i.e. continuity in service) on back wages . In such cases, the direction of the Court does result in a person being denied the benefits that should flow to him as a logical consequence of a declaration in his favour. It may be said that, in such a case, the Court's direction does not violate any fundamental right as happens in a case like this where an illegal exaction is sought to be retained by the State. But even in the latter type of cases relief has not been considered automatic. One of the commonest issues that arose in the context of the situation we are concerned with is where a person affected by an illegal exaction files an application for refund under the provisions of the relevant statute or files a suit to recover the taxes as paid under a mistake of law. In such a case, the Court can grant relief only to the extent permissible under the relevant rules of limitation. Even if he files an application for refund or a suit for recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder in case of Reliance Industries Ltd. 2016 (45) STR 383, M/s Cadila healthcare Ltd. 2013 (30) STR 3 (GUJ.), Parth Poly Wooven Pvt. Ltd. 2012 (25) STR 4 (GUJ), National Steel Agro Industries Ltd. 2014 (36) STR 805 (TRI) and Castrol India Ltd. 2013 (30) STR 214 (TRI), STR. In Appellant s own case as reported in 2019 (2) TMI 1488 CESTAT AHMEDABAD the credit on outward transportation of GTA Services was allowed and we do not find any reason to deviate from the said judgment in present case also. Further even the Tribunal Reference Bench in case of Parry Engineering Electronics P. Ltd. Vs. CCE Order no. 344-353/2015 dt. 29.07.2015 has held that the cenvat credit is available in respect of services received for Wind Mill installed outside the factory. Similarly in present case even if the power plant, port services and other related services are rendered outside factory premises, but the fact remains that the same are related with business activity of Appellant and hence eligible for credit. We find that the Appellant in relation to power supplied to residential colony has already reversed the cenvat credit proportionate to such power supply which we deem as sufficient complianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Technical Testing and Analysis KRITI INDUSTRIES (I) LTD. 2017 (47) S.T.R. 81 (Tri. - Del.) Travel Agency Service DOSHION LTD. 2013 (30) S.T.R. 240 (Tri. - Ahmd.) Water Treatment Chemicalused for making sea water usable JAYPEE BELA PLANT 2010 (259) E.L.T. 114 (Tri. - Del.) Vikram Cement Ltd 2006 (194) ELT 3 (SC) 6.6 In respect of dredging services we find that the same was in respec of jetty in the factory premises and is used for transportation as well as import and export of goods. Since the services are related with the business of the company, the Appellant are eligible to avail credit of the same. As regard denial of credit on excess tax charged by the service provider, we find that the assessment at the end of the service provider has not been challenged. The Appellant has paid the amount of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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