2017 (9) TMI 211 - AT - Central Excise

Tribunal Rules in Favor of Appellant on Cenvat Credit Issue

M/s Sai Calnates India Pvt Ltd, M/s Shree Sai Calnates India Pvt Ltd Versus Commissioner of Central Excise, Customs and Service Tax - Surat-II

The Tribunal set aside the Orders-in-Appeals and allowed the appeal, ruling in favor of the appellant. It held that selling Marble Lumps after screening ... CENVAT credit - input services used for dutiable as well as exempt service - whether the appellant are required to pay 6% of value of the Marble Lumps sold after screening the input marble powder, as they had availed credit on various input services that were used in the manufacture of Calcium Carbonate? - Held that: - Undisputedly the process carried out by the appellant in their factory is that the appellants bring Marble Lumps/ powder etc., subjected it to its process of screening and unsalable marbles were sold, whereas the marble powder, which are to be used in the process of manufacture are accordingly used in the factory. Such an activity, cannot be considered as a trading activity and an exempted service - appeal allowed - decided in favor of appellant. Issues: Appeal against Orders-in-Appeals involving common issue of Cenvat Credit on Marble Lumps sold after screening.Analysis:1. Background: The appellant, engaged in manufacturing Calcium Carbonate, availed Cenvat Credit on inputs, capital goods, and input services. They used Marble Powder as a raw material, not availing credit as it was duty exempt. Marble lumps left after screening were sold. Authorities alleged recoverable Cenvat Credit on input services for selling Marble lumps.2. Appellant's Submission: The appellant's Chartered Accountant argued that they did not trade Marble Powder. They used fine powder in manufacturing Calcium Carbonate and sold unsuitable lumps. The appellant availed credit on input services like Security Service, Professional Service, etc., used in manufacturing. They contended the demand for 6% of Marble Lumps' value is legally unsustainable.3. Revenue's Argument: The Revenue supported the Commissioner (Appeals)'s findings.4. Decision: The crucial issue was whether the appellant must pay 6% of Marble Lumps' value sold after screening, considering availed credit on input services for Calcium Carbonate manufacturing. The Tribunal noted the Marble Lumps' sale after screening was not a trading activity but part of the manufacturing process. The impugned order was set aside, and the appeal allowed with any consequential relief as per law.