2018 (9) TMI 564 – CESTAT HYDERABAD – TMI – CENVAT Credit – whether the appellant is eligible to avail CENVAT credit of the service tax paid by him on Royalty charges paid to M/s Solute? – time limitation.
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Held that:- The show cause notice issued in September, 2015 is blatantly time barred. Hence the entire demand raised on the appellant needs to be set aside on the question of limitation itself.
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Appeal allowed. – E/30104/2018 – FINAL ORDER No. A/31082/2018 – Dated:- 7-9-2018 – Mr. M.V. Ravindran, Member (Judicial) For the Appellant : Shri Lalit Mohan Chandna, Advocate For the Respondent : Shri P.S. Reddy, Asst. Commissioner/AR ORDER PER: M.V. RAVINDRAN 1. This appeal is directed against the Order-in-Appeal No. HYD-EXCUSMD- AP2-056-17-18 dated 15.09.2017. 2. The relevant facts that arise for consideration are, the appellants are engaged in manufacturing paper quality products, organic compounds and water treatment chemicals falling under Chapters 29 & 38 of Central Exc
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Consultants Pvt. Ltd., Chennai (hereinafter referred to as M/s Solute) on 29.03.2008. As per the agreement, M/s Solute have to make available the technical knowhow, technical information and assistance in production and sale of high quality, speciality chemicals used in paper and pulp industry and they also grants exclusive right to issue sub-licenses / user licences to corporate entries and / or individuals in the domestic territory and grants exclusive rights to apply for licenses to manufacture and sell the products. 4. The appellant has entered into a Confidentiality Agreement with M/s Srivilas Hydrotech Pvt. Ltd., Bollaram (hereinafter referred to as M/s Srivilas) and provided certain proprietary information relating to product formulations, technology etc. which they procured from M/s Solute to M/s Srivilas and getting certain goods manufactured for them as per their requirement. M/s Srivilas manufacture the goods only for the appellants and they maintain confidentiality of the
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ds and re-packed and re-labelled the same into smaller containers and cleared the same from their premises on payment of appropriate duty as being deemed manufacturer of the goods. It is his submission that the CENVAT credit of service tax paid on Royalty charges is used directly or indirectly in the manufacture of final products. He would draw my attention to the decision of Tribunal in the case of TATA Motors [2017 (50) STR 28] wherein identical issue was considered. He would submit that though initially appellant had indicated that there was understanding as a job worker between appellant and M/s Srivilas but it was an arrangement of purchase of finished goods manufactured by M/s Srivilas, but the fact remains that appellant had shared the technology procured by them from M/s Solute, was sold by the appellant in smaller packs as deemed manufacturer. It is his further submission that the issue is also contested on limitation as appellant availed the CENVAT credit and informed the dep
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g capacity. It is his further submission that question of limitation raised by the appellant does not arise as appellant had tried to misdirect the queries of the department by stating that they had job worker arrangement with M/s Srivilas. It is his submission that there was an intention to avail ineligible CENVAT credit. 8. I have considered the submission made at length on both sides and perused the records. 9. On perusal of records the only issue that falls for consideration is whether the appellant is eligible to avail CENVAT credit of the service tax paid by him on Royalty charges paid to M/s Solute. Undisputedly, appellant procured technology for manufacturing of speciality chemicals from M/s Solute, paid royalty charges and discharged service tax. The appellant having no manufacturing capacity of his own got the finished goods manufactured from M/s Srivilas by sharing the technology procured by them. After getting the bulk finished goods from M/s Srivilas they re-packed and re-
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