TaxTMI 
TaxTMI 
2026 (3) TMI 1444
X X X X Extracts X X X X
X X X X Extracts X X X X
....eir factory at MIDC, Waluj. The appellants are registered taxpayers holding Central Excise Registration No. AAACB3906FXM001 for manufacture of aforesaid finished products and for compliance with the central excise statute. The finished products manufactured by the appellants include both dutiable goods viz., Ciprofloxacin Injection USP, Ciprofloxacin I.P 100 ML, Metronidazole 100 ML USP, Mannitol Injection 20% IP; and exempted goods viz., Amino drip and preparations of minerals and their supplements. The registered office/head office of the appellants situated at Gurgaon, is separately registered with the Service Tax Department as an Input Service Distributor ('ISD') and during the disputed period covering July, 2007 to June, 2009, they had distributed the CENVAT credit to the respective manufacturing units of the appellants, including the appellants' unit situated at Waluj, Aurangabad. 3.1 Denial of CENVAT Credit of Service Tax paid on various input services is the subject matter of present dispute. In the course of EA-2000 audit conducted by the department on 25.10.2008 to 27.10.2008, upon scrutiny of details, documents on the basis of which CENVAT credit of service tax has be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....invoice Amount of credit (Rs.) July 2007 12,31,487 November 2007 32,83,024 March 2009 2,12,287 Total 47,26,798 He had also provided the service wise break-up of the aforesaid amount of CENVAT credit is as under: Sr. No. Category of input service Amount of credit (Rs.) 1 Interior decorator 2,371 2 Consulting Engineer services 10,920 3 Management Consultant 16,83,260 4 Security Agency 4,00,815 5 Scientific or technical consultancy 41,922 6 Banking and Financial services 8,481 7 Erection, Commissioning & Installation 1,66,750 8 Management, maintenance or repair 20,49,574 9 Technical testing and analysis 1,04,064 10 Technical Inspection & certification 2,12,077 11 Commercial & Industrial construction services 25,392 12 IT charges 21,173 Total 47,26,799 In respect of the aforesaid services, the learned Advocate submitted that since these input services are covered by taxable services specified in Rule 6(5) of CCR, 2004 and is not exclusively used in the manufacture of exempted goods, the appellants had properly availed cred....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowing case laws: (i) GHCL Ltd. Vs. CCE - 2009 (242) E.L.T. 468 (T) (ii) CCE Vs. V. M. Salgaonkar & Bros Pvt. Ltd. - 2008 (10) STR 609 (T) 4.4 Learned Advocate in explaining the eligibility of the individual input services had stated the following: (i) garden maintenance service is covered under the category of Management Maintenance and Repair service as the said category of service cover repair and maintenance of any movable or immovable property. (ii) car rental service is incorrectly mentioned & it is actually a service relating to maintenance of car parking. In other words, these services were also related to repair and maintenance of parking space in the factory. (iii) The clearing and forwarding services were exclusively used in relation to manufacture of dutiable goods or goods exported. (iv) EPABX, computer and lift maintenance are specifically covered under the category of Management maintenance and repair services. (v) The software development services are covered by consulting engineer service which is also a specified service under Rule 6(5) of the CCR of 2004. Therefore, he stated that the appellants....
X X X X Extracts X X X X
X X X X Extracts X X X X
....credit correctly availed, the imposition of penalty under Section 11AC of the CEA is incorrect and unsustainable. 5. Learned Authorised Representative (AR) appearing for the department, while reiterating the findings in the impugned order, submitted that the appellants did not opt for the optional payment under Rule 6(3A) of CCR of 2004 and did not submit proper documents for verification of the payment of CENVAT amount. Therefore, he claimed that the impugned order demanding 10% of the value of exempted goods along with interest and imposition of penalty is sustainable. 6. Heard both sides and perused the records of the case. We have also examined the submissions advanced by learned Advocate appearing for the appellants and the learned Authorized Representative of the Department. Further, we have also perused the additional written submissions in the form of paper books submitted by both sides along with citation of case laws mentioned in support of their case. 7. The issue involved in this appeal is to examine the eligibility to avail CENVAT credit on various input services taken and utilized by the appellants during the course of manufacture of dutiable finished goods a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taken on input services viz., (i) Rs.12,31,487/- being credit for input services procured in Waluj by the appellants during July, 2007; (ii) ISD credit of input services distributed through ISD invoice for Rs.32,83,024/- during November, 2007, and (iii) another ISD invoice for Rs.2,12,287/- during March, 2009, totally amounting to Rs.47,26,798/-. The input services which are interpreted by the department as ineligible on the ground that these services have been used commonly for both dutiable and exempted goods and no separate records were maintained, as mentioned at paragraph 2 of the SCN in specific terms are garden maintenance, car rental, clearing & forwarding, EPABX repairs & maintenance, computer maintenance, software development and lift maintenance. 8.3 Further, the appellants had agitated before the learned Commissioner that such CENVAT credit reversal attributable to input services used in or in relation to both dutiable and exempted final products for which the CENVAT credit was reversed by them should be considered under the provisions of Section 73 of the Finance Act, 2010, in getting the dispute settled. These aspects has been discusse....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rule 6 ibid for extending credit of whole of the service tax paid on seventeen specified input services mentioned therein, even though these were used commonly in or in relation to manufacture of dutiable as well as exempted goods, with the exception that such provision is not applicable for those input services used exclusively in relation to exempted goods. The extract of the said legal provision is quoted below: "Rule 6(5): Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as specified in sub-clauses (g), (p), (q), (r), (v), (w), (za), (zm), (zp), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act shall be allowed unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services." The aforesaid seventeen specified taxable services for which input credit of service tax used commonly in dutiable as well as exempted final product is eligible to be availed as CENVAT credit are the following: (i) consulting engineering service (ii) architect service (iii) in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of such Act/Rules. In Rule 6(5) of CCR of 2004, it has been provided that notwithstanding anything contained in the provisions of sub-rule (1), (2) and (3) of Rule 6 ibid, the provision of sub-rule (5) will have overriding effect, in extending the CENVAT credit of duty/tax paid on input/input service used in relation to both dutiable and exempted goods. Therefore, we find that the findings of the learned Commissioner in the impugned order for confirming the adjudged demands on the ground that the conditions prescribed in the provision of Rule 6(3) of the Rules of 2004 was not complied with by the appellants, does not stand the scrutiny of law. 9.3 It can be seen from paragraph 3 of the 'Discussion and Findings' recorded by the learned Commissioner in the impugned order that he had not accepted the reversal of proportionate CENVAT credit by the appellants for the reasons that they had not followed the procedures and conditions of sub-rule 3, 3A of Rule 6 of CCR, 2004 for determination and payment of amount and such deliberate contravention attract imposition of penalty on the appellants under Rule 15 ibid read with Section 11AC of the Central Excise Act, 1944. It can be seen from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inance Bill, 2010 or when the Finance Act, 2010 came into force. In the present case, the SCN was issued on 09.04.2010 and the said dispute was pending on the date of enactment of Finance Bill, 2010 on 08.05.2010. Thus, the payment of the amount along with interest made by the appellants during November/December, 2010 and submitted to the jurisdictional Commissioner along with requisite documents, Chartered Accountant's certificate could have been subjected to such processes provided therein. It is not the case of the department that they had considered the case of the appellants with respect to the above payment of the amount along with interest and rejected the case as not fulfilling the conditions as provided under Section 73 of the Finance Act, 2010. Therefore, the said procedural simplification measures introduced in the Budget, 2010 as a part of the Finance Act, 2010 in resolving the CENVAT disputes should have been addressed by the department as provided therein and the impugned order extending such proceedings cannot stand the judicial scrutiny. 10.4 In this regard, we find that the Co-ordinate Bench of the Tribunal in the case of Commissioner of Central Excise, Goa Vs V....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the present one. In this regard, we place reliance upon the observations made by the High Court of Gujarat at Ahmedabad in Shree Rama Multi Tech Ltd. v. Union of India, 2011 (267) E.L.T. 153 wherein also the inputs were used in dutiable and exempted goods. No separate accounts were maintained. There was proportionate reversal of credit in view of retrospective amendment in the Act, 2010. It was held that the petitioners were not required to move any application as contemplated under section 69 (2) of the Act, 2010 as they had been bonafidely prosecuting the remedy before the High Court. Reliance can also be placed upon Commissioner of Central Excise, Salem-I v. Burn Standard Co. Ltd., 2013 (294) E.L.T. 389 (Mad.) wherein the assessee used a common input namely, furnace oil in the manufacture of dutiable goods as well as non-dutiable goods, on which, cenvat credit had been taken. A show cause notice was issued against it by the revenue as no separate accounts in respect of exempted goods and dutiable goods were maintained. The assessee had reversed the duty amount on the inputs in the manufacture of exempted items and did not claim any cenvat credit on the inputs used in the manufac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....¦à¥€ जाती है जिससे कि यह अलग संकलन के रूप में रखा जा सके। Separate paging is given to this Part in order that it may be filed as a separate compilation. MINISTRY OF LAW AND JUSTICE (Legislative Department) New Delhi, the 10th May, 2010/Vaisakha 20, 1932 (Saka) The following Act of Parliament received the assent of the President on the 8th May, 2010, and is hereby published for general information :- THE FINANCE ACT, 2010 No. 14 OF 2010 [8th May, 2010.] An Act to give effect to the financial proposals of the Central Government for the financial year 2010-2011 .. BE it enacted by Parliament in the Sixty-first Year of the Republic of India as follows :- CHAPTER I PRELIMINARY 1. (/) This Act may be called the Finance Act, 2010. Short title and commence- ment. (2) Save as otherwise provided in this Act, sections 2 to 56 shall be deemed to have come into force on the 1st day of April, 2010. 73. (1) In the CENVAT Credit Rules, 2004, made by t....