TaxTMI 
TaxTMI 
2015 (8) TMI 58
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....e Dry Dock, amongst others. They utilized CENVAT Credit towards the output service mainly repair services and export of the goods and claimed refund of CENVAT Credit under Rule 5 of CENVAT Credit Rules. 2. Two Show Cause Notices were issued on 03.11.2011 and 07.02.2012 proposing to deny the CENVAT Credit on input service, input and capital goods for the period October 2010 to February 2011. It has been alleged that the final product 'ship' is classifiable under Central Excise Tariff Heading 8901 chargeable to Nil rate of duty and therefore, there are not eligible to avail the CENVAT Credit for manufacturing of the exempted final product in contravention of Rule 6(1) of CENVAT Credit Rules, 2004. It has further been alleged that the Appellant availed the CENVAT Credit wrongly on the basis of ISD invoices, issued by their Head Office Mumbai, whose name was not mentioned in LOP. It has also been alleged that the Appellant availed, CENVAT Credit on the capital goods fixed with earth. By the impugned order, the Adjudicating Authority disallowed the CENVAT Credit of Rs. 7,69,25,644.00 alongwith interest and imposed penalty of equal amount of CENVAT Credit. 3. The learned Advocate o....
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....f furnishing Bond. So, Rule 6(6)(d) of the said Rules would not apply. It is submitted that the address of Head Office was not mentioned in the LOP and therefore, the CENVAT Invoice issued by the Head Office as ISD cannot be accepted. He also submits that the Appellant is not eligible to avail the credit of capital goods used in the machinery fixed on earth, relied on the decision of the Hon'ble Supreme Court in the case of Quality Steel Tubes (P) Ltd Vs Collector of Central Excise - 1995 (75) ELT 17 9(S.C.) 5. After hearing both the sides and on perusal of the records, we find that the Deputy Development Commissioner, Kandla Special Economic Zone, by letter dt.04.04.2006, permitted the applicant for establishment of a new undertaking, under 100% EOU scheme for manufacturing of Ship Building, Ship Repairs/Refit. It was permitted on the condition that the Appellant shall export the entire production excluding reject and sales in the Domestic Tariff Area as per the provisions of EOU scheme, amongst others. By letter dt.08.01.2008, the Joint Development Commissioner, Kandla Special Economic Zone, authorized the Appellant for manufacturing further items namely, Ship, Vessels, Hulls,....
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....ce' under Rule 2(l) of the Rules precisely covers any service used by a provider of taxable service for providing an output service, any service used by a manufacturer in or in relation to manufacture of final product and inclusive part of the definition, services used in relation to setting up, modernisation, renovation or repair of a factory, premises of a provider of output service or an office relating to such factory or premises etc. The expression "any service" read with "for providing an output service" would cover wide encompass of the definition of input service. The Honble Supreme Court in the case of Indian Chamber of Commerce (AIR 1976 SC 348) observed that the expression "for" has to be interpreted as "for the purpose of". CBEC Circular No.120/01/2010-ST, dt.19.01.2010, clarified that the definition of input service qua a manufacturer and provider of output service. In our considered view, CENVAT Credit availed on input service, input and capital goods for setting up Dry Dock would be allowed for providing output service namely repair/refit service. This is also covered in the inclusive part of the definition of 'input service'. Hence, the finding of the Adjudicating ....
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....t of refund under Rule 5 of the Rules. In the present case, the Appellant stated that they have claimed the refund for the unutilised credit under Rule 5 of the said Rules. This decision of Hon'ble High Court was upheld by Honble Supreme Court as reported in 2009 (234) ELT A 16 (SC). The relevant portion of the decision of Honble Karnataka High Court in the case of ANZ International is reproduced below:- "3.With reference to the above said grounds urged in this appeal, we have carefully examined the same to find out as to whether the aforesaid substantial question of law would arise or not for our consideration in this Appeal. The CESTAT, having regard to the undisputed fact that the respondent is 100% Export Oriented Unit (for short 'ECU') in respect of which, benefit of CENVAT Credit Rules, 2004 is available for the inputs which will be used for manufactured goods of 100% export. Therefore, the Tribunal has applied Rule 6(6) and recorded the reasons stating that there is a provision of exporting the goods under bond. In the case of 100% EOUs, the input can be imported free of duty and they can obtain indigenously also free of duty. When duty is paid on the input....
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.... of such exempted goods even if such goods are exported. In that case, the Respondent was engaged in the manufacture of finished leather and it had exported the manufactured leather. The Hon'ble High Court held that an assessee manufacturing the goods chargeable to Nil rate of duty is eligible to avail CENVAT Credit paid on the inputs under the exception clause contained in Rule 6(6) of the said Rules, used in the manufacture of such goods, if the goods were exported. In view of the above discussion, the contention of the learned Authorised Representative for the Revenue is that there is no requirement of furnishing of Bond by 100% EOU, is not admissible. 11. As revealed from the Adjudication order that input service credit was denied mainly on the basis that the input service credit availed on the input services was shown in ER-1 return instead of ST-3 returns. The relevant portion of the Adjudication order is reproduced below:- "12.2.5 In the instant case, the Noticee has shown the CENVAT Credit availed on "input services" in their ER-2 return indicating that those services have been used by them in or in relation to manufacture of final products whether directly or indirec....
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....toms and service tax in respect of input service and utilised credit from these sources for the purpose of paying service. Rules permit taking of credit under a common pool and permit the use of the credit from common pool for different purposes and there is no restriction placed to the effect that credit accounts should be maintained for use for manufacture of excisable goods and for use for providing services. In the case of Commissioner of Central Excise, Salem Vs Thangavel & Sons (P) Ltd. - 2014 (7) 895-CESTAT Chennai, the Tribunal held that the Respondents are not only the manufacturers of excisable goods, but also the provider of output service and both the activities are carried out in the same premises. Respondents are eligible for availment of input credit, they can utilise the CENVAT credit available with them either for payment of excise duty on the final products or for payment of service tax on the output services as stipulated in sub-rule (4) of Rule 3 of CENVAT Credit Rules, 2004. The restriction on utilisation of CENVAT Credit stipulated relates only for specific type of duties i.e. education cess on excisable goods or payment of education cess on output service. Th....