TaxTMI 
TaxTMI 
2016 (5) TMI 271
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.... Customs & Service Tax, Lucknow. 2. The appellant availed Cenvat credit on the duty paid on inputs and capital goods and service tax paid on input services. The appellant regularly filed ER-I returns. During the period in dispute February, 2011 to August, 2011, the appellants have procured inputs for their distillery unit, being molasses, the main raw material. For procurement of the same, they have incurred service charges. The service provider charged service tax which was paid and Cenvat credit taken. SCN was issued as it appeared to revenue that credit on such is not allowable, accordingly, it was proposed to disallow the amount of Rs. 8,22,146.50+ Rs. 30,07,188/-. The SCN was adjudicated on contest and the proposed demand confirmed ....
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....ich it is required. Sub-section (2) provides on receipt of an application under sub-section (1) and after making such inquiry in the matter as he may think fit, the Controller may make an order under section 8 subject to considerations like, (i) the general availability of molasses ; (ii) various requirements of molasses ; (iii) the better utilization to which molasses may be put in the public interest ; (iv) the extent to which the requirements of the applicant are geneuine ; (v) reasonable likelihood or otherwise of the molasses that may be obtained by the applicant being diverted to purpose other than those specified in the application and where the application is rejected in whole or in part, he shall record reasons therefor. ....
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....d such direction shall be binding on the occupier of the sugar factory. Sub-rule 8 (2) further provides that No molasses produced or stored in a factory in a particular molasses year shall be mixed with any molasses of the previous molasses year without the previous permission of the Controller in writing. Further Rule 21 of the said Rule provides for the prohibition of transferring use of molasses for the purposes other than that for which allotted. Further Rule 22 provides The molasses produced in a sugar factory shall be sold or supplied only to distilleries or other persons bonafidely requiring it for purposes of industrial development. Further Rule 25 provides that No molasses including the molasses for captive consumption, shall be ....
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....e Cenvat credit. The same is input service being in the nature of "procurement of inputs". The ld. Counsel have also taken through sample allotment orders by the State Excise Authority/Controller of Molasses, which specifically shows allotment in favour of the appellant of certain quality of molasses from their sugar factory to transfer to the distillery unit through the pipeline. In another instance, molasses which have been allotted from one, M/s Govind Sugar Mills Ltd. to the appellant, vide allotment order dated 21/2/11, to be transported through road by truck/tanker. 4.4 The ld. Counsel also relies on the ruling of the Division Bench of this Tribunal in the case of ITC Ltd. versus CCE, Hyderabad : 2010 (17) STR 146 wherein the asses....