2018 (11) TMI 1443 – CESTAT KOLKATA – TMI – Irregular availment of CENVAT Credit – input materials were removed as such by the appellant under the cover of invoices, on payment of an amount equal to the credit taken in terms of Rule 3 (5) of the Cenvat Credit Rules, 2004 – It is the case of the Revenue that since the assessee did not use the inputs in or in relation to the manufacture of finished goods and accordingly, the services used in procuring the inputs would not qualify for availing cenvat credit.
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Held that:- The issue is no more res-integra in view of the various decisions of the Hon’ble High Courts and the Tribunal. This Bench of the Tribunal in the case of Seven Star Steels Ltd. Vs. Commr. Of Central Excise, Customs & S. Tax, BBSR II [2013 (5) TMI 119 – CESTAT KOLKATA] by relying upon the decision of the Tribunal in the case of Chitrakoot Steel & Power Pvt. Ltd. Vs. Commissioner [2007 (11) TMI 135 – CESTAT, CHENNAI] had allowed the appeal filed by the assessee.
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houdhary : This is an appeal filed by the Appellant against the Order-in-Appeal No.11/CE/BBSR-GST/2017 dated 22.11.2017 passed by Commr. of GST, Central Excise & Customs, BBSR. 2. Briefly stated the facts of the case are that the appellant, M/s Bilt Graphic Paper Products Ltd. (formerly known as Ballarpur Industries Ltd.) is engaged in the manufacture of writing and printing paper classifiable under Chapter 48 of the 1st Schedule to the Central Excise Tariff Act, 1985, in its unit Sewa located at Jeypore in the district of Koraput, Odisha. The appellant is also having other manufacturing units located in the State of Maharashtra and Haryana. The appellant availed Cenvat Credit of the Central Excise duty and countervailing duty paid on input materials such as, pulp, sodium chloride, chlorine, starch and lime. The appellant also availed input service credit on GTA service and port service used for procurement and inward transportation of above input materials, in terms of Rule 2 (l)
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e adjudication order and rejected the appeal. Hence, the present appeal before the Tribunal. 3. The ld.Advocate appearing on behalf of the Appellant Company filed a written statement along with copies of relied upon decisions and submits that the recovery provisions under Rule 14 of Cenvat Credit Rules, 2004, are not applicable to the present case inasmuch as the said provisions are applicable to the cases of wrong availment/utilization of the Cenvat Credit. Whereas in the present case, the credit was availed by the appellant against the prescribed documents issued by the service providers towards procurement and transportation of input materials from the port to the factory of the appellant. It is his submission that the extended period of limitation is not at all applicable to the facts of the present case and accordingly, imposition of penalty under Section 11AC of the Central Excise Act, 1944, read with Rule 15 (2) of Cenvat Credit Rules, 2004 is unwarranted since the issue relates
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ion F.No.96/85/2015/CX.I dated 07.12.2015 has observed, on the reversal of cenvat credit in respect of services paid on the input services, as under : B.26- Meerut Zone- CENVAT Credit – Reversal of Cenvat Credit in respect of service tax paid on Input Services : Issue : Rule 3(5) of the Cenvat Credit Rules, 2004 provides as under : When inputs or capital goods, on which CENVAT Credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products or provider of output service, as the case may be, shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9 An audit objection has been raised that Cenvat Credit taken in respect of service tax paid on input services like Customs Brokers charges, Clearing and Forwarding Agencies Services (C&F), GTA etc. used for procurement/transportation of inputs/c
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ich are available for reuse would not be fair to the trade. Therefore, the conference concluded that the present rule represents the correct provision in accordance with the principles of input tax credit. Rule 3(5) of the Cenvat Credit Rules, 2004, does not need any amendment. Audit Para may be replied accordingly . 7. I find that the issue is no more res-integra in view of the various decisions of the Hon ble High Courts and the Tribunal. This Bench of the Tribunal in the case of Seven Star Steels Ltd. Vs. Commr. Of Central Excise, Customs & S. Tax, BBSR II reported in 2013 (30) STR 532 (Tri.-Kolkata) by relying upon the decision of the Tribunal in the case of Chitrakoot Steel & Power Pvt. Ltd. Vs. Commissioner : 2008 (10) S.T.R. 118 (Tribunal) had allowed the appeal filed by the assessee. Relevant Paras 5 & 6 of the decision of the Tribunal s decision in the case of Seven Star Steels Ltd. (supra) are reproduced below : 5. Heard both sides and perused the records. I find
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ng iron ore to the factory were required to be reversed under Rule 3(5) of Cenvat Credit Rules, 2004. I do not find merit in the said allegation of the Department on two counts; firstly, the input iron ores after being brought to the factory, were subjected to the process of screening and process of screening as explained by their ld. Advocate, would definitely a part of the manufacturing process. After the iron ores are subjected to the process of screening, the same could not be called as input as such. Secondly, I find that Rule 3(5) of the Cenvat Credit Rules, 2004, is directed for reversal of Cenvat credit on inputs or capital goods and the same is not applicable to the credit availed on the input services . In this connection, the Hon ble High Court of Punjab & Haryana in the case of Commr. of Central Ex., Chandigarh-I v. Punjab Steels (cited supra), had observed at Para 10, which reads as under : 10. Be that as it may, however, still even on merits, this court finds that the
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nalogy even if in one provision both the terms have been used, the same should be read in the other provision as well, where it has not been specifically mentioned, has no legs to stand, as the tax cannot be levied merely by inference or presumption. It is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. Words cannot be added or substituted so as to give a particular meaning. …… 6. The same view was taken by this Tribunal in the case of Chitrakoot Steel & Power Pvt. Ltd. v. Commr. of Central Excise, Chennai (cites supra). The relevant portion of the Order of the Tribunal in the case of Chitrakoot Steel & Power Pvt. Ltd. is reproduced below : 5. On a careful study of the statutory provisions, it is seen that when the credit availed inputs or capital goods are removed from the factory of the assessee, sub-rule (5) of Rule 3 of the Cenvat Credit Rules, 2004 provides for recovery of equal amount of credit.
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