Custom, Excise & Service Tax Tribunal
M/S. National Aluminium Co. Ltd vs Commissioner Of Gst, Central Excise & ... on 1 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.E/77021/2017
(Arising out of Order-in-Appeal No.04/CE/RKL-GST/2017 dated 14.09.2017 passed by the Commissioner (Appeals) of GST, CX & Customs, Bhubaneswar)
M/s. National Aluminium Co. Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of GST, Central Excise & Customs, Bhubaneswar
Respondent (s)
Appearance:
Shri S.C.Mohanty, Advocate for the Appellant (s) Shri D.Haldar, AC(AR) for the Respondent (s) CORAM:
Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing/Decision:- 01.01.2018 ORDER NO.FO/75149/2018 Per Shri P.K.Choudhary
1. Briefly stated the facts of the case are that the appellant is engaged in the manufacture of Aluminium Metal. They availed Cenvat Credit on Inputs, Input Services and Capital goods used in its manufacturing unit and captive power plant at Andul under the provisions of Cenvat Credit Rules, 2004. A Show Cause Notice dated 30.12.2013 was issued proposing to deny the Cenvat Credit as availed irregularly. The Adjudicating authority disallowed the Cenvat Credit of Rs. 5,14,104/- along with interest and imposed penalty of equal amount of Cenvat Credit. By the impugned Order the Commissioner (Appeals) upheld the Adjudication Order and rejected the appeal filed by the appellant. Hence, the appellant filed this appeal.
2. Heard both the sides and perused the records.
3. I find that the Show Cause Notice was issued alleging abatement of the ineligible Input Credit of Rs. 5,29,199/-. The Adjudicating authority allowed the credit of Rs. 15,095/-. The appellant reversed the amount of Rs. 2,94,371/- relating to construction service S&P Cabin building relating to modification of the Rail Transport system. The appellant disputed the demand of Rs. 2,34,888/- against the availment of the Cenvat Credit on the services like Photography service, cleaning of Boiler and Condenser, Manpower and Sprinkling of water in approach road inside CPP Plant. The Learned Counsel argued the matter at length. It is submitted that the Input services were used in relation to manufacture of final product i.e. Aluminium Metal. The Learned Counsel referred the decision of the Honble Supreme Court in the case of Ramala Sahakari Chinni Mills Vs. CCE, Meerut, [2016 (334) ELT-3 (SC)].
4. I find that both the authorities below denied the credit on the ground that the said services have no nexus either directly or indirectly, in or in relation to the manufacture of final products. The Honble Supreme Court had discussed the expression include in Rule 2(l) of the Rules, 2004.
It is well settled by the various decisions that there must be a nexus with the services and the manufacture of the final products. There is no material available on record to substantiate the nexus of the services with the manufacture of the final products directly or indirectly and therefore there is no fault in the denial of Cenvat Credit.
5. However, I agree with the submission of the Learned Counsel in respect of imposition of penalty. It is seen that the appellant had reversed the credit in respect of portion of the demand used for construction of service. It is a case of eligibility of Input Service Credit under the provision of the Rules, 2004. Therefore, it cannot be called a case of availment of Cenvat Credit by a fraudulent manner. Such imposition of penalty under Section 11AC of the Central Excise Act, 1944 is not warranted.
6. In view of the above discussion, the impugned Order is modified in so far as the imposition of penalty is set aside. The appeal filed by the appellant is disposed off.
(Operative portion of the order already pronounced in the open court) S/d.
(P.K.Choudhary) MEMBER (JUDICIAL) ss 3 Appeal No.E/77021/2017