TMI Blog2020 (2) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ore. For that reason, all these cars, washing machines, refrigerators etc. do not become products of mining. Otherwise, everything that we use must be classified as a product of agriculture or mining or forests which is absurd. What is relevant is that activity which produces the goods in question which in this case is the oil mill. As far as the payment in question is concerned, the demand is on the entire amount which the appellant has received under the agreements - the appellant is also getting paid a separate amount for storage in their godown from their clients apart from the amounts which they receive for the stevedoring services. This is confined to cargo stored beyond a certain period. Undoubtedly, such service is in the nature of storage and warehousing service and is chargeable to service tax as such. In our considered view, the demand on the appellant has to be restricted to the extent the amounts which they have received towards godown rents separately for storage over and above the normal stevedoring charges. The appellant is not liable to pay service tax under Storage Warehousing Services on the service charges which they have received for stevedoring/c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e head of Storage Warehousing Services for Soya Bean Meal, for the period 2004-05 to 2008-09 in respect of the services which they rendered. They also came to the conclusion that they had, in violation of the provisions of Rule 6(3)(c) of CCR, 2004, utilized Cenvat credit to the extent of 100% in respect of common input services while they should have utilized only 20% of this credit as per the rules prevalent during the period. Accordingly, a show cause notice was issued : (a) Demanding service tax amounting to ₹ 1,37,12,690/- for the period 2004-05 to 2008-09 along with interest, under Section 75 of the Finance Act, 1994. (b) Proposing to impose penalties under Sections 76 78. (c) Seeking to deny and recover an amount of ₹ 49,69,486/- being the irregularly utilized Cenvat credit in cash under the proviso to sub-section (1) of Section 73 of the Finance Act, 1994, read with Rule 14 of CCR, 2004 along with interest. (d) Proposing to impose penalty upon them under Section 78 of the Finance Act, 1994 read with Rule 15 of CCR, 2004. 4. After following due process, the Ld. Commissioner, by the impugned order, has confirmed the demands alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PP BAGS 1. Where cargo is received by rail, unloaded in Warehouse and then shipped 375.00 227.00 355.00 2. Where cargo is received by road, unloaded in Warehouse and then shipped 305.00 157.00 285.00 3. Where cargo is received by rail and directly taken to port for shipment 325.00 177.00 305.00 4. Where cargo is received by road and directly taken to port for shipment 255.00 107.00 235.00 Notes : (i) Above rates are inclusive of one month free storage and for tween decker vessel. Rebate of ₹ 25/- pmt will be available to TIA for bulk carriers. (ii) Further rebate of ₹ 10/- pmt will be available where quantity handling crosses 100,000 mts and additional ₹ 5/- pmt where quantity handled crosses 150,000 mts. It is understood that the rebate will be given only for the quantity exceeding the limits men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluded from the scope of storage and warehousing. Soya Bean Meal being an agricultural produce, cannot be charged to service tax under storage and warehousing service. He would, therefore, urge that no service tax can be charged under either of the heads on their activity in dispute. 9. With respect to the second issue of irregular utilization of Cenvat credit, he would submit that it is true that they had utilized Cenvat credit to the extent of 100% during the relevant period on the common input services utilized by them. Rule 6(3)(c) of CCR, 2004 as it read during the period (up to 1-4-2008) was as follows : Rules 6 of Cenvat Credit Rules as on 1-6-2007 (1) The Cenvat credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or exempted services, except in the circumstances mentioned in sub-rule (2) : Provided that the Cenvat credit on inputs shall not be denied on job worker referred to in Rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that Rule. (2) Where a manufacturer or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(3) has been recast. There is no provision in the amended Rule 6(3) which indicates that the unutilized portion of the Cenvat credit for the past period would lapse. Therefore, the unutilized portion of the Cenvat credit could have been utilized after 1-4-2008. Since sufficient time has now passed, even though they had utilized Cenvat credit in excess during the relevant period, instead of paying service tax in cash, the same could have been used post 1-4-2008. Therefore, by now, the entire exercise is revenue neutral. 11. Per contra, Ld. DR supports the impugned order and asserts that the adjudicating authority has correctly confirmed the demands on storage and warehousing services and also has ordered recovery of the wrongly availed Cenvat credit. 12. We have considered the arguments on both sides and perused the records. As far as the demand of service tax under the head Storage and Warehousing Services is concerned, we do not find any force in the argument of the Ld. Counsel that Soya Bean Meal is an agricultural produce. It is true that soya bean is an agricultural produce but once the soya beans reach the oil mill, they extract soya oil and what is left over is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the relevant period prohibited utilization of Cenvat credit in excess of 20% but did not forbid availment of Cenvat credit. After 1-4-2008, when Rule 6(3)(c) was amended, the accumulated Cenvat credit did not lapse as there was no provision to that effect in the amended rules. Nothing stopped the appellant from utilizing the Cenvat credit post 1-4-2008. Therefore, we find that the appellants have utilized Cenvat credit to the extent of 80% well before they were entitled to do so. At this point of time, since more than a decade has passed, post 1-4-2008, it does not make any difference whether they had utilized the Cenvat credit to the extent of 80% prior to 1-4-2008 or post this date. In view of the above, we find that the demand on this accounts needs to be dropped and we do so. 14. In view of the above, we pass the following order : (i) The appellant is not liable to pay service tax under Storage Warehousing Services on the service charges which they have received for stevedoring/cargo handling. (ii) They are liable to pay service tax on storage and warehousing charges of any amount received on account of storage of goods by warehousing charges ground rent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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