TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 495
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....nd Potassium (NPK), Phospho Gypsum, Sulphuric Acid and Phosphoric Acid, in their factory located at Paradeep, Odisha. During the period in dispute, the products DAP and NPK were subject to levy of excise duty at concessional rate of 1% ad-valorem, in terms of Notification No. 1/2011-CE dated 01.03.2011. The Appellant removed DAP & NPK on payment of duty at the concessional rate of 1% in terms of the Notification No. 1/2011-CE. Insofar as the other products are concerned, such as Phospho Gypsum, Sulphuric Acid and Phosphoric Acid, the same are removed from the factory on payment of appropriate duty of excise at the effective rate of 10.30% ad-valorem. 2.1. The Appellant availed CENVAT credit in respect of certain input services specified under Rule 6(5) of the CENVAT Credit Rules (CCR), 2004 such as maintenance or repair service, transport of goods by road service, security service, etc. The input service credit is admissible on the services specified in the sub-rule when the same are used for manufacture of both dutiable as well as exempted goods. The input service credit availed by the Appellant on the above services are meant for utilization towards payment of Central excise dut....
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....nput service used in connection with the manufacture of DAP & NPK; therefore they submit that there is no violation of the conditions prescribed under Notification No. 1/2011-CE. 4.1. Regarding the common input service credit taken under Rule 6(5) of the CCR, 2004, the appellant submits that they are eligible to avail the CENVAT Credit on the common input services specified under Rule 6(5), such as security charges, repair and maintenance charges, consultant service, etc. The submission of the appellant is that Rule 6(5) of the CCR has an overriding effect over the sub-rules (1), (2) and (3) thereof. As such, it is their contention that the only limitation prescribed in the said sub-rule (5) is that the specific services should not be exclusively used in or in relation to the manufacture of exempted goods. In the present case, they have utilized the said credit availed on the specified services only for payment of duty on other dutiable products such as Phospho Gypsum, Sulphuric Acid and Phosphoric Acid, which were removed by the Appellant on payment of Central Excise Duty at normal rate and thus, it is contended that the restriction under Rule 6(5) of the CCR is not applicable to....
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...., security service etc. It has an overriding effect over the sub-rules (1), (2) and (3) of Rule 6 of CENVAT Credit Rules, 2004. The only limitation prescribed in the said sub-rule (5) is that the specific services should not be exclusively used in or in relation to the manufacture of the exempted goods. In the present case, we observe that the appellant has utilized the said credit availed on the specified services only for payment of duty on other dutiable products such as Phospho Gypsum, Sulphuric Acid and Phosphoric Acid, which are removed by the Appellant on payment of Central excise duty at normal rate. Thus, we observe that the restriction mentioned in Rule 6(5) of the CENVAT Credit Rules, 2004 is not applicable to the Appellant. Accordingly, we hold that availment of CENVAT CREDIT of input services as provided under Rule 6(5) of the CENVAT Credit Rules, 2004 would not be a bar to avail the benefit of concessional rate of duty as provided under Notification No. 1/2011-CE. 7.3. This view has been held by the Tribunal, Mumbai in the case of Commissioner of C.Ex., Belapur v. Elder Pharmaceuticals Ltd. [2015 (37) S.T.R. 241 (Tri.-Mum.)] wherein it has been observed that the....
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....onsequently the penalty on the assessee is not warranted. Therefore, in result we pass the following order :- (a) We hold that the assessee is entitled to take Cenvat credit on the services covered under Rule 6(5) of the Cenvat Credit Rules, 2004 as prescribed in the manner in the said Rule. (b) The assessee is not entitled to take Cenvat credit on the services mentioned in Rule 6(5) of the Cenvat Credit Rules, 2004 which is attributable to their trading activity. (c) We hold that the extended period of limitation is not invokable. (d) The demands pertaining to the extended period of limitation are set aside. (e) No penalty is warranted. (f) The matter is remanded back to the adjudicating authority for requantification of demands, inadmissible credit on trading activity for the normal period of limitation." 7.4. The same view has been held by the Hon'ble Bombay High Court in the case of Oil & Natural Gas Corporation Ltd. v. Commissioner of C.Ex., S.T. & Cus., Raigad [2013 (32) S.T.R. 31 (Bom.)]. The relevant paragraph of the said decision is reproduced below: - "14. Now, in the present case, ONGC is a manufacturer both of dutiable and exempted products. Crude oil....