TaxTMI 
TaxTMI 
2020 (2) TMI 1441
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....epartment visited the assessee's premises, collected records, recorded statements of the personnel of the appellant and investigated the matter. After investigation, they came to the conclusion that the appellant had short paid service tax of Rs. 1,37,12,690/- (including CESS) under the head of 'Storage & Warehousing Services' for Soya Bean Meal, for the period 2004-05 to 2008-09 in respect of the services which they rendered. They also came to the conclusion that they had, in violation of the provisions of Rule 6(3)(c) of CCR, 2004, utilized Cenvat credit to the extent of 100% in respect of common input services while they should have utilized only 20% of this credit as per the rules prevalent during the period. Accordingly, a show cause notice was issued : (a) Demanding service tax amounting to Rs. 1,37,12,690/- for the period 2004-05 to 2008-09 along with interest, under Section 75 of the Finance Act, 1994. (b) Proposing to impose penalties under Sections 76 & 78. (c) Seeking to deny and recover an amount of Rs. 49,69,486/- being the irregularly utilized Cenvat credit in cash under....
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....bsp; Arrange export of the goods including customs clearances. For these services, the appellant got paid handling rates as follows : "Stevedoring, Cargo Handling and Storage Charges : Stevedoring and Cargo Handling charges shall be paid by TIA to TINNA as under on shipment (B/L) for SBM, Ricebran and other commodities : FOR to FOB handling S. No. SCOPE OF WORK HANDLING RATES OF DELIVERY BY IN CASE NET FOR NET (bags to be returned to supplier) GROSS for NET IN JUTE BAGS GROSS FOR NET IN PP BAGS 1. Where cargo is received by rail, unloaded in Warehouse and then shipped 375.00 227.00 355.00 2. Where cargo is received by road, unloaded in Warehouse and then shipped 305.00 157.00 285.00 3. Where cargo is received by rail and directly taken to port for shipment 325.00 177.00 305.00 4. Where cargo is received by road and directly taken to port for shipment 255.00 107.00 235.00 Notes : (i) Above rates are inclusive of one month free storage and for tween decker vessel. Rebate of Rs. 25/- pmt will be ava....
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....d take us through the definition of 'Storage and Warehousing' which reads as follows : "Storage and warehousing" includes storage and warehousing services for goods including liquids and gases but does not include any service provided for storage of agricultural produce or any service provided by a cold storage." 8. He would submit that agricultural produce has specifically been excluded from the scope of storage and warehousing. Soya Bean Meal being an agricultural produce, cannot be charged to service tax under storage and warehousing service. He would, therefore, urge that no service tax can be charged under either of the heads on their activity in dispute. 9. With respect to the second issue of irregular utilization of Cenvat credit, he would submit that it is true that they had utilized Cenvat credit to the extent of 100% during the relevant period on the common input services utilized by them. Rule 6(3)(c) of CCR, 2004 as it read during the period (up to 1-4-2008) was as follows : "Rules 6 of Cenvat Credit Rules as on 1-6-2007 (1) The Cenvat credit shall not be allowed on such quantity of input or input service which is used in ....
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.... of Cenvat credit could have been used subsequently or it would lapse forever. With respect to this issue, he would rely on the order of this Bench in the case of Duraflex Services & Construction Technologies Limited v. Commissioner of Customs, Central Excise & Service Tax, Visakhapatnam-I as reported in [2019 (25) G.S.T.L. 226 (Tri. - Hyd.)] in which it was held that a plain reading of Rule 6(3)(c) would show that this is only utilization of Cenvat credit which is restricted and not its availment itself. Post 1-4-2008, that restriction has been removed and Rule 6(3) has been recast. There is no provision in the amended Rule 6(3) which indicates that the unutilized portion of the Cenvat credit for the past period would lapse. Therefore, the unutilized portion of the Cenvat credit could have been utilized after 1-4-2008. Since sufficient time has now passed, even though they had utilized Cenvat credit in excess during the relevant period, instead of paying service tax in cash, the same could have been used post 1-4-2008. Therefore, by now, the entire exercise is revenue neutral. 11. Per contra, Ld. DR supports the impugned order and asserts that the adjudicating authority ha....