TMI Blog2023 (10) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... rate, by reference to the proportionate reversal mechanism therein, that the activity of the respondent herein is susceptible to such denial. The appeal is without merit and is dismissed. - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri P K Acharya, Superintendent (AR) for the appellant Shri S Gupta and Shri Mehul Jivani, Chartered Accountants for the respondent ORDER A limited issue arises in this appeal of Revenue against order [order-in-appeal no. BPS/10/LTU/MUM/2013 dated 31st January 2013] of Commissioner of Central Excise (Appeals), Mumbai-I which, on appeal of M/s DCW Ltd against order of original authority denying retention of credit of ₹ 34,30,643, of ₹ 39,92,426 and of ₹ 17,41,354 taken under rule 3 of CENVAT Credit Rules, 2004 equal to tax included in bills of M/s Thermax Ltd for operation and maintenance service and for transport of coal by goods transport agency between April 2009 and December 2009, between January 2010 and December 2010 and between November 2010 and June 2011 respectively for generation of electricity and steam in the coal fired 50 MW captive power plant installed for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of exempted activity of electricity production. Such a finding is incorrect inasmuch as a substantial portion of the electricity has been used in the manufacture of finished goods. Therefore, the Appellants became entitled to full credit of service tax paid on such input services. The provisions of Rule 6(5) of CENVAT Credit Rules, 2004 are similar to Rule 6(4) of CENVAT Credit Rules, 2004. in the context of Rule 6(4) of CENVAT Credit Rules, 2004, the Hon'ble High Court in the case of UNION OF INDIA Versus HEG LTD. 2012 (275) E.L.T. 316 (Chhattisgarh) has held CENVAT credit is eligible for Capital goods used in power plant even when major portion of electricity so generated was sold. Thus applying the ratio of the said judgement it is evident that the CENVAT credit should be allowed for services falling under Rule 6(5) of CENVAT Credit Rules, 2004. I find that the ratio of the aforesaid Judgement is applicable in the present case also. 14. I find ample force and substance in the Appellants' above contentions that The definition of 'input services' does not restrict itself only to services which are used in manufacture of final products, but it also covers all a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out from the assessee. The third parties were entitled to utilize the electricity in such manner as they desired without any restriction. Even assuming that the third parties were under an obligation to supply their products to the assessee, it would make no difference. They could have used that electricity or electricity from any other source for the manufacture of their final product. 4. We find that the decision supra has been rendered in the context of inputs whereas the issue here is of input service which, as pointed by Learned Counsel for the respondent, obtains special treatment in (5) Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clauses (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. of rule 6 of CENVAT Credit Rules, 2004 as may be seen from the clarification offered by circular dated 1st October 2007 by the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent and Rule 6(4) of the Rules was no bar for denying Cenvat Credit. and that the Tribunal, in Indo Rama Synthetics (I) Ltd v. Commissioner of Central Excise, Nagpur [2015 (39) STR 300 (tri-Mumbai)], has held that 2. The appellant, M/s. Indo Rama Synthetics (I) Ltd., Nagpur availed Cenvat credit of Service Tax paid on Management, Maintenance or Repair Services as defined under Section 65(105)(zzg) of the Finance Act, 1994 in their factory. The electricity generated was utilized partly in the manufacture of excisable goods as well as exempted goods and partly being supplied to electricity grid of the Maharashtra State Electricity Board (MSEB in short). The department issued a show cause notice dated 28-11-2011 demanding recovery of proportionate Cenvat credit of the Service Tax paid on Management, Maintenance or Repair Services on the ground that the appellant is not eligible for Cenvat credit in respect of electricity supplied to MSEB. Accordingly, a demand of Rs. 51,27,157/- for the period 2007-08 to 2010-11 (up to October, 2010) along with interest thereon was proposed along with imposition of penalties. The case was adjudicated vide the impugned order and demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized wrongly or has been erroneously refunded, the same along with interest shall be recovered from the manufacturer or the provider of the output service and provisions of Section 11A of Central Excise Act, 1944 Section 73 of Finance Act, 1994 was applied for effecting such recoveries. It is very clear that for recovery of Cenvat credit under said Rule 14, first it is to be established that Cenvat credit has been either taken wrongly or utilized wrongly. Further, the said Rule 14 has also been provided for recovery of amount mentions in sub-rule (3) of Rule 6 of Cenvat Credit Rules under Explanation 2 under sub-rule (3) of said Rule 6. The provision at Explanation 2 under sub-rule (3) of said Rule 6 provide for recovery of Cenvat credit which was admissible at the time of taking credit. In order to invoke provisions of said Rule 14 it is to be first established that either the Cenvat credit was not admissible or Rule 6 was applicable in the transaction then only Cenvat credit could be recovered under Rule 14 of Cenvat Credit Rules, 2004. In the present case, admittedly, there is no allegation in the said show cause notice that the appellants had taken credit of any inadmissible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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