2006 (12) TMI 48 - AT - Central Excise

Appeal rejected: Storage tank charges not creditable in gas transaction value. Insufficient evidence for duty-paid claim.

The Tribunal dismissed the appeal, ruling that the fixed facility charges paid for storage tanks were not eligible for credit as part of the transaction ... Cenvat/Modvat – Revenue contended that appellants are entitled for credit in respect of inputs not for rental charge or storage tank – Authority find no evidence that appellant availed credit on rental charges and appeal is dismissed. Issues:1. Entitlement to credit for fixed facility charges paid on storage tanks used for liquid gas.2. Time-barred demand for credit on fixed facility charges.Analysis:1. The appeal was filed against the Commissioner (Appeals) order confirming a demand after denying credit for fixed facility charges paid by the appellants. The appellants, engaged in manufacturing steel ingots and billets under the Modvat scheme, were availing credit for duty paid on liquid gas used in finished goods production. The supplier, M/s. Inox Air Products Ltd., installed storage tanks at the appellants' place, charging fixed facility charges as rent. Invoices for fixed facility charges were raised monthly, showing duty payment, which the appellants used as basis for taking credit.2. The Revenue contended that the fixed facility charges were merely rental fees for the storage tank and not eligible for credit. The appellants argued that the charges were part of the transaction value for the received liquid gas, making them entitled to credit since duty was paid on the rental charges. Additionally, they claimed the demand was time-barred as the Revenue was aware of their credit practice regarding fixed facility charges.3. The Tribunal found that the appellants used liquid gas as an input for manufacturing, stored by the supplier in tanks for which fixed facility charges were levied. Invoices were issued for these charges, but the Tribunal disagreed with the appellants' assertion that these charges were part of the transaction value of goods. Regarding the time-barred argument, the Tribunal noted that the appellants failed to provide evidence of filing necessary documents to claim credit on fixed facility charges, indicating a lack of merit in the appeal.4. Ultimately, the Tribunal dismissed the appeal, emphasizing the appellants' failure to demonstrate compliance with documentation requirements for claiming credit on fixed facility charges. The decision was made on 29-12-2006 in open court.