9911796707
TMI Blog2024 (10) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... .11.2020 was issued proposing to the demand impugned for supply of water to Government of Odisha and re-availment of Cenvat Credit subsequent to change of option under Rule 6(3) of Cenvat Credit Rules, 2004 and Cenvat Credit availed on invoices after one year of issuance in the year of return. The appellant contested the Show Cause Notice but impugned order has been passed. 2.1. In order to meet water requirement at its refinery Paradip, drew water from the Mahanadi river between the period April, 2016 to June, 2017 for which appellant pay total sum of Rs. 14,77,15,683/- to the Government. The said water was drawn based on advance water charges paid by way of demand note for the period April, 2016 to October, 2016. Further appellant entered into an agreement dated 20.10.2016 and supply of water from the period 21.10.2016 to 30.06.2017 was based on such agreement. 2.2. According to the impugned order, the supply of water by Government of Odisha is an assignment of right to use natural resources which is exigible to Service Tax under „Reverse Charge Mechanism‟. 2.3. Therefore, the Revenue is of the view that in terms of Section 66D(a)(iv) of the Finance Act, any servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f demand note for the period April 2016 to 20th October 2016. Further, the Appellant entered into an agreement dated 20.10.2016 and the supply of water for the period from 21.10.2016 to 30.06.2017 was based on such agreement dated 20.10.2016. 6. According to the impugned Order, the supply of Water by the Government of Odisha is an "assignment of right to use Natural Resources" which is exigible to Service Tax under reverse charge mechanism. The contention of the Department is that as per Section 66D(a)(iv) of the Finance Act, any service provided by the Government to business entities are taxable and further as per Sl. No. 59 of the amended Notification No. 25/2012-5T dated 20.06.2012 (Mega Exemption Notification'), only the assignment of natural resources to an individual farmer for the purpose of farming is exempted from the levy of Service Tax Hence, it has been observed that the supply of water by Government of Odisha to the Appellant is liable to service tax amounting to Rs. 2,21,57,532/-. Issue 2: Re-availment of credit subsequent to change of option under Rule 6(3) of the Cenvat Credit Rules, 2004 ('CCR') (Demand - Rs. 183,09,57,095/- and Period - FY. 2015- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er res integra since this issue has been decided by this Tribunal in the case of Sasan Power Ltd. vrs CCE & CGST" 2024 5 EMI (326) CESTAT, New Delhi. Further in the case of Paradeep Phosphates Ltd. vrs. Commissioner of CGST & Central Excise, Bhubaneswar -I, vide final order No. 76069/2024 by Kolkata Bench. 5. Therefore, it is a bare fact that no Service Tax can be demanded from the appellant for supply of water by Government of Odisha under Section 66D(A)(iv) of the Act. 6. It is further submitted that the above activity is exempted in terms of Serial no. 9 to 39 of Mega Exemption Notification. 7. It is further submitted that the entire demand is of revenue neutral as whatever Service Tax is paid by the appellant, same is entitled to appellant‟s Cenvat Credit. 8. With regard to availment of Cenvat Credit subsequent to change of option under Rule 6(3) of Cenvat Credit Rules, 2004, it is his submission that appellant produced multiple dutiable products including Liquefied Petroleum Gas („LPG‟) (Non Domestic) and Superior Kerosene Oil („SKO‟) (Industrial). However, when LPG and SKO are cleared for domestic usage and through Public Distribution System ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, it is his submission that the appellant is eligible for suo-moto re-availment earlier reversed Cenvat Credit. 16. It is his submission that the Ld. Adjudicating Authority held that the appellant was required to file the refund claim instead of taking suo-moto credit. There is no such allegation in the Show Cause Notice. Therefore, the finding of the Adjudicating Authority is beyond the allegation of the Show Cause Notice. 17. He further submitted that there is no restriction in the suo-moto availment of credit alongwith erroneously reversed in as much as it does not pertain the character of duty for which refund under Section 11B is to be claimed. 18. With regard to Cenvat Credit availed on invoices upto 1 year of issuance and E.R.-I return, the appellant submits that they had taken Cenvat Credit in their books of accounts but only shown in ER-1 returns after 1 year and there is no restriction as the appellant has availed Cenvat Credit within 1 year of the issuance of the invoices. In that circumstances the Cenvat Credit cannot be denied. Only merely showing the availment of Cenvat Credit in the ER-1 return after one year. 19. He further submitted that whole of the demand i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 25.11.2014. 2. The facts of the case are that the Appellant is engaged in the manufacture of fertilizers at its factory located in Jagatsinghpur district of Odisha. 2.1 The dispute in the present case relates to levy of Service tax on Water charges paid by the Appellant to the Government of Odisha for supply of water against charges/consideration at a specified rate stipulated in the Agreement. 2.2 On the basis of audit, it was observed that the supply of water to the Government from natural water sources, i.e. Taladanda Canal to the Appellant falls under the category of "allocation/auction of natural resources" which are liable to service tax w.e.f. 01.04.2016. The respondent observed that in terms of Sl. 59 of Notification No. 25/2012- ST dated 20.06.2012 as amended by Notification No. 22/2016-ST dated 13.04.2016 read with Circular no. 192/02/2016-ST dated 13.04.2016, a Show Cause Notice was issued to the appellant on 08.04.2019, proposing demand of service tax for the period 1 April, 2016 to 30th June, 2017 by invoking extended period of limitation. 2.3 The appellant contested the show-cause notice, but the adjudicating authority confirmed the demand against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. The Agreement also deals with a situation where there can be reduction or shortage in the water supply. This clearly means that the Agreement is for supply of water and not mere access to water source. 18. It is, therefore, more than apparent that the Agreement is for supply of water by the government to the appellant and is not for assignment of any right to the appellant to use the natural resources of the government. 19. The appellant is, therefore, justified in asserting that the Agreement executed between the appellant and the government is for supply of water for which charges are paid by the appellant on the basis of volume of water drawn and it is not a case of assignment of right to use natural resources of the government. 20. In this view of the matter no service was provided by the government to the appellant. The impugned order, therefore, deserves to be set aside on this ground alone." 7. As the issue in this case has been examined by this Tribunal in the case of Sasan Power Limited (supra), we hold that the payment made by the appellant for water charges, is not liable to be service tax during the impugned period for allocation/auction of natural r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
