Appeal allowed for delay in filing, Cenvat credit disallowed, penalty set aside for lack of intent.

The appeal was allowed after condoning a 71-day delay in filing. Cenvat credit on service tax paid for processing fees was disallowed, but the Tribunal found a direct nexus of capital subsidy and power incentives with manufacturing activities. The penalty was set aside as there was no intent to evade service tax.

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Issues:
1. Condonation of delay in filing the appeal.
2. Disallowance of cenvat credit on service tax paid for processing fees.
3. Nexus of capital subsidy and power incentives with manufacturing activities.
4. Imposition of penalty.

Analysis:
1. The appellant filed a Miscellaneous Application for condoning a 71-day delay in filing the appeal, which was allowed due to reasons stated in the application.
2. The appellant, engaged in manufacturing M.S. Ingots & Industrial Oxygen & Nitrogen Gas, availed cenvat credit on service tax paid to West Bengal Industrial Development Corporation (WBIDC). The Revenue contended that the service tax was not related to the manufacture of final products. The adjudicating authority disallowed the credit, leading to a demand of duty, interest, and penalty. The appeal was filed against this order.
3. The appellant argued that the capital subsidy and power incentives from WBIDC were crucial for their manufacturing activities, reducing project and manufacturing costs. The subsidy directly related to procurement of capital goods and power supply for manufacturing excisable goods. The Tribunal found that without these incentives, the project would not have been viable, establishing a direct nexus with manufacturing activities.
4. The Tribunal noted no suppression of facts or intent to evade service tax, setting aside the impugned orders and allowing the appeal against the disallowance of cenvat credit on service tax paid for processing fees.

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