2018 (7) TMI 157 – CESTAT KOLKATA – TMI – CENVAT credit – input services – demurrage charges – it was alleged that appellant availed the cenvat credit of service tax paid for services which were in the nature of penalty and cannot be treated as input service – Held that:- The service provider would charge penalty or demurrage for failure to receive the guranteed quantity for a certain period. On perusal of the agreement, it is clear that the said charges are related to the service provided by the service provider – the service rendered by M/s IMC Ltd. is in respect of manufacturing of excisable goods – denial of credit unjustified.
–
In the present case, the appellant availed MS pipeline facility belonging to M/s IMC Ltd. The service provider paid the tax which cannot be denied and therefore, the availment of cenvat credit by the recipient unit cannot be denied.
–
Appeal allowed – decided in favor of appellant. – Ex. Appeal No.75315/18 – FO/A/76034/2018 – Dated:- 19-3-2018 – S
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
payment has been availed by the appellant. According to the Revenue, the appellant has availed credit of service tax for such services which were not rendered by the service provider and were basically in the nature of penalty and therefore, the appellant is not entitled to avail the cenvat credit. A show cause notice dated 30 July 2013 was issued proposing demand of cenvat credit for the period from Nov 2012 to May 2013. The adjudicating authority confirmed the demand of cenvat of ₹ 1,84,072/- along with interest and also imposed penalty equal to the amount of duty. By the impugned order, the Commission (Appeals) rejected the appeal filed by the appellant. Hence, the present appeal. 3. Heard both sides and perused the appeal records. 4. The Commissioner (Appeals) observed that in this case the appellant availed the cenvat credit of service tax paid for services which were in the nature of penalty and cannot be treated as input service as defined under Rule 2(l) of the Cenvat Cre
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
n of every year. Should the annual throughput exceed 20000 MT per annum then for the additional cargo above 20000 MT the Pipeline Utilisation Charges shall be ₹ 25/- per MT. If for any reason whatsoever, the Company is unable to pump/transfer the liquid cargo so required by Party and the Party is in no way responsible for such failure then for the period of disruption the minimum guaranteed quantity shall be reduced proportionately. 5. There is no dispute that service tax is payable for providing service by M/s IMC in respect of transfer of liquid cargo to the appellant s premises. The service provider would charge penalty or demurrage for failure to receive the guranteed quantity for a certain period. On perusal of the agreement, it is clear that the said charges are related to the service provided by the service provider. The appellant contended that inward transportation of inputs has been specifically covered under the inclusive definition of input service under Rule 2(l) of
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
no application to the facts before me in the present case. 5.2 In the case before me, the issue is whether the credit can be denied even if the duty has been paid wrongly by the supplier of inputs. This Tribunal in a number of cases cited supra relied upon by the lower appellate authority has clearly held that the excise authorities having jurisdiction over the recipient of inputs cannot reopen the classification adopted by the officer having jurisdiction over the input supplier. In the present case, it is not the case of the Revenue that the excise authorities having jurisdiction over the input supplier has questioned the classification and held that the payment of duty was incorrect. If that be so, the authorities at the receiver s end cannot question the classification or payment of duty and deny the Cenvat credit in respect of the duty paid by the supplier of the goods and borne by the receiver . 7. In the present case, the appellant availed MS pipeline facility belonging to M/s IM
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =