AI Drafter 
TaxTMI 
TaxTMI 
2024 (6) TMI 1010
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....payment of duty. The Appellants were taking Cenvat Credit for the services utilized for provision of transportation of gas through pipelines. This amounts to taking credit commonly for both exempted goods and the taxable service. Accordingly, the demand of Rs.11,12,41,507/- was raised based on the total turnover of exempted goods and calculating the Excise Duty @ 6% under Rule 6(3A) of the Cenvat Credit Rules, 2004. (2) The second demand was on account of Cenvat Credit of Rs.5,27,86,789/- taken by the Appellant for various services used for laying the pipeline which ultimately was used for supply of the CBM gas. 2. After due process, the Adjudicating Authority dropped the demand amount of Rs.11,12,41,507/- holding that the provisions of Rule 6 of the Cenvat Credit Rules, 2004 has been mis-interpreted in the Show Cause Notice. Being aggrieved, the Revenue has filed their Appeal before the Tribunal. 3. The Adjudicating Authority after due process disallowed the Cenvat Credit of Rs.5,27,86,789/-. Being aggrieved, the assessee is in Appeal before us. 4. The Ld.Chartered Accountant appearing on behalf of the Appellant submits that the activities undertaken by them is o....
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....l. From the Sales register submitted by M/s. Essar Oil Limited, it is noticed that they did not supply CBM to IOCL, BPCL & HPCL during the last five years They are supplying CBM mainly through pipeline to various parties for industrial use. They are paying Service Tax against transportation of gas through pipeline. M/s. Essar Oil & Gas has cited exemption Notification No.12/2012-CE dated 17.03.2012 claiming that their product did not meet the criteria to be classified as CNG. They depressurized their CBM before delivery to their clients. They only undertook compression for the purpose of transportation. They cited general Circular No.14/2001 dated 04.06.2001 for this purpose. It is seen that M/s.Essar Oil & Gas apply pressure of maximum 225 PSI which is equivalent to 15.819075 Kg/Cm2, a prerequisite for the natural gas to become dutiable as mentioned in the Board's letter F.No.B.1/3/2001-TRU dated 21.05.2001. Natural Gas is not chargeable to Duty of Excise as per Chapter 27 Sl.No.84 of General Exemption under Notfn. No.12/2012-CE, dated 17.03.2012 as amended. In view of the above, instant case proceedings initiated against M/s. Essar Oil Limited, Village/....
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....rt that the said noticee was also liable for registration under Rule 9 of the Central Excise Rules, 2002, for being engaged in the manufacture of such goods. In this regard the notice has contended that they extract CBM Gas from the gas wells and for transporting the gas over long distances, the gas is compressed by them by applying maximum 200-225 psi of pressure for enabling seamless transportation of the same. The compression that they undertake on the gas is by applying very low pressure that is upto 200-225 psi. This compression does not result in the CBM gas being marketable as Compressed Natural Gas (CNG for short) since for marketing a gas as CNG, the same is required to be compressed at 2900-3600 psi of pressure. They have further contended that the undisputed and admitted position is that the compression that is undertaken by them on the CBM gas is only for the limited purpose of facilitating the transportation of the same through pipeline. The compression is not for the purpose of marketing the CBM gas as CNG." 8. Therefore, considering the Conclusion Report C.No.II(8) 89/AE/Essar Oil/CE/BOL/2017/1540 dated 20.03.2018 with the decision of the Department to treat the i....
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....rmed demand for the extended period is not sustainable for the following reasons:- (1) The Appellants are duly registered with the Service Tax Department. (2) They have been taking Cenvat Credit and reflecting the same in the ST-3 Returns. (3) They were also under the bona fide belief that they are eligible for the Cenvat Credit which is being used for the provision of the output servies. (4) They were under the bona fide belief that the compression of CBM gas would not amount to manufacture and no manufacturing activity has taken place. (5) He relies on the case law of Sterlite Telelink Ltd. vs. Commissioner of Central Excise, Vapi [2014 (312) E.L.T. 353 (Tri.-Ahmd.)], wherein it has been held that when the monthly ST-3 Returns are filed, still the same are required to be scrutinized as per the Instruction given under the CBEC Manual. 11. In view of the above submissions, the Ld.Consultant takes the stand that the confirmed demand of Rs.5,27,86,789/- is not sustainable for the demand pertaining to the extended period. 12. He extends the same arguments in respect of the amount of Revenue's demand of Rs.11,12,41,507/- and submits th....
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....f building or civil structure. Similarly, sub-clause (b) of definition of works contract service contained in sub-clause (zzzza) of Section 65(105) of the Finance Act, 1994 is also noteworthy in this regard which is reproduced as under :- "(b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purpose of commerce or industry." 9. If one goes through the above provisions, the contention of the appellant that 'construction of a pipeline or conduit' is distinct from the service of 'construction of a building or a civil structure or part thereof' is not without merits. Wherever the Legislature wanted to include the construction of a pipeline or conduit, it has been specifically mentioned separately in the definition. This itself would indicate that erection/construction of pipeline or conduit cannot be considered as part of 'construction of building of civil structure or part thereof'. ................. 11. In the said judgment, the credit availed of service tax paid on construction services for laying pipeline was held to be admissible. A plain reading of the definitions noticed abov....
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.... case of Oberoi Mall Ltd. Vs. Commissioner of Service Tax, cited supra, the Mumbai Bench of the Tribunal has held as under:- "7. The submission made by the ld. C.A. has strong force inasmuch, there is no dispute, that the appellant has constructed various malls and rented the same to various parties and discharge of service tax on rent received is also not disputed. The availment of Cenvat credit on various input services for the construction of the malls and subsequent utilization, we find that in the case of Navaratna S.G. Highway Properties (P) Ltd. (supra), (wherein one of the member of this Bench Shri M.V. Ravindran was presiding) this Tribunal held in favour of the assessee by recording as under : "3.2 The definition of 'inputs' is limited to the definition of 'input services' as can be seen from the definition given above. Credit of duty paid on inputs is available when the inputs are used for providing an 'output service'. Therefore, there is a need to say that the inputs have been used for providing an 'output service'. In the case of 'input service' the definition includes input services used by a provider of taxable service for providing an output servi....