2015 (10) TMI 1571

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....ial Service" without confirming that the said service are "input service" of the respondent as contemplated under Board's letter. (ii) Whether the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Ahmedabad, while passing the Order No.A/12359/2014 dated 17.12.2014, has correctly allowed the Cenvat Credit of Capital Goods without ascertaining that the said capital goods were used for providing output services provided by the respondent i.e. "Port Service" etc. (iii) Whether in the facts and circumstances of the case, was the Tribunal right in law to allow the Cenvat Credit of Rs. 59,82,52,117/- and uphold the OIO No.41/Commr/2012 dated 27.08.2012 passed by the adjudicating authority?" 2. The respondent - M/s Reliance Ports & Terminals Ltd., Jamnagar is a holder of Service Tax Registration. During the course of audit by the CERA audit party, it was noticed that the respondent had availed and utilized the CENVAT credit of service tax to the tune of Rs. 3,74,48,847/- paid as a recipient of service under section 66A during the financial years 2006- 07 and 2007-08 on Consulting Engineers Service and Banking & Finance Service. According to the ....

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....27.08.2012 passed by the Commissioner, Central Excise & Customs, Rajkot, who observed that the two issues to be decided were (i) whether the noticee is eligible to avail CENVAT credit of the service tax paid on input services as recipient during the period 2006-07 to 2007-08 under the category of "Consulting Engineers" and "Banking and other Financial Services", and (ii) whether the credit availed on capital goods without installation is proper or not. On the issue of CENVAT credit of the service tax paid on input service of "Consulting Engineers" and "Banking and other Financial Services", the Commissioner observed that the issue was examined by the Ministry who, after examining the provisions of law, had issued instructions in their letter dated 16.07.2009 whereby, it was clarified that the provisions under section 66A state that in case service is provided from abroad and received in India, such taxable service shall be treated as if the recipient had himself provided the service in India, and accordingly, all the provisions of Chapter V of the Finance Act, 1994 would apply. Therefore, it is clear that section 66A is not a charging section by itself. In fact, it only creates a l....

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....08. The Commissioner further observed that there is no specific debarring provision in the Cenvat Credit Rules, 2004 and the only condition is that the capital goods must be used for manufacture of excisable goods or for providing output service. Placing reliance upon various decisions on the issue of availment of CENVAT credit on capital goods without installation, the Commissioner observed that there is no precondition of installation of capital goods for availing the CENVAT credit on the same in the Cenvat Credit Rules, 2004 which was also clarified by the CBEC vide the above referred circulars. He, accordingly, held that the allegations made in the show cause notice are not sustainable and dropped the demand on merits. 5. The Department carried the matter in appeal before the Tribunal. By the impugned order dated 17.12.2014, the Tribunal dismissed the appeal and confirmed the findings recorded by the Commissioner. 6. Ms. Sejal Mandavia, learned standing counsel for the appellant assailed the impugned order by submitting that the Tribunal has totally overlooked the contention of the revenue made in the grounds of appeal that the services, namely, "Consulting Engineers" and "Ba....

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....een issued only on two grounds. Firstly, that CENVAT credit on service tax paid under section 66A is not allowed by rule 3 of the rules and CENVAT credit availed by the assessee was irregular and wrongly availed and required to be recovered with interest under rule 14 of the rules read with sections 73 and 75 of the Finance Act, 1994; and secondly, that the assessee had availed and utilized CENVAT credit of duty paid on capital goods received for expansion in respect of "Coated Line Pipes" supplied by M/s PSL Ltd., Gandhidham for "SPMs with Sea base Pipelines Project" during 2006-07 and 2007-08, and that the project was completed only in May 2008. That the CENVAT credit availed and utilized by the assessee before the actual installation of the capital goods is irregular and caused unintended benefit to it, which was required to be recovered from it with interest under rule 14 of the rules read with sections 73 and 75 of the Finance Act, 1994. It was submitted that in the entire show cause notice, there is no ground as to whether the services used by the assessee would qualify as "input service" and as to whether the capital goods were used in providing "output service" of the type ....