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of <h1>Dredging service payment insufficient for CENVAT credit without being actual service recipient under Rule 2004</h1> <h3>JSW Steel (Salav) Ltd Versus Commissioner of Central Excise & Service Tax, Raigad</h3> JSW Steel (Salav) Ltd Versus Commissioner of Central Excise & Service Tax, Raigad - TMI Issues involved:Recovery of credit under CENVAT Credit Rules, 2004 for the period from March 2006 to September 2010 and from April 2011 to December 2011.Summary:The appeal by M/s JSW Steels (Salav) Limited was against the recovery of credit taken under CENVAT Credit Rules, 2004. The appellant operated a jetty for 'captive use' at Salav and had been availing credit for dredging services to ensure sufficient depth in the creek for unloading raw materials. The central excise authorities initiated proceedings for recovery of credit availed, culminating in confirmation of recovery and imposition of penalties. The main issue revolved around the eligibility of the services under rule 3 of CENVAT Credit Rules, 2004.The appellant contended that the impugned services were eligible as 'input services' under rule 2(l) of CENVAT Credit Rules, 2004, which permit availment of credit for services used directly or indirectly in the manufacture of goods. The appellant argued that denial of credit was inappropriate as the impugned activity fell within the definition of 'input service'. Reference was made to various judicial decisions to support the claim that the services were integral to the manufacturing process, even if not physically received at the factory premises.The Tribunal considered the primary eligibility for availing CENVAT credit, which accrues only to the recipient of the service. It was noted that the waters deepened by dredging did not belong to the appellant but were under the control of the Maharashtra Maritime Board. The appellant failed to establish itself as the recipient of the service, which is crucial for availing credit under the CENVAT scheme. Precedent decisions were cited to emphasize the importance of recipient status for credit eligibility.Ultimately, the Tribunal found no merit in the appeal and dismissed it based on the lack of evidence establishing the appellant as the recipient of the services, which is a key requirement for availing CENVAT credit. The decision was pronounced in open court on 06/12/2023.
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