Custom, Excise & Service Tax Tribunal
M/S. Shyam Dri Power Ltd vs Commissioner Of Central Excise, ... on 18 May, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.E/432/2010
(Arising out of Order-in-Appeal No.08/CE/B-II/2010 dated 24.03.2010 passed by the Commissioner(Appeals) of Central Excise, Customs & Service Tax, Bhubaneswar)
FOR APPROVAL AND SIGNATURE
HONBLE DR. CHITTARANJAN SATAPATHY, TECHNICAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s. Shyam DRI Power Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Customs & Service Tax, BBSR-II
Respondent (s)
Appearance:
Shri S.K.Mohanty, Advocate for the Appellant (s) Shri A.K.Sharma, Authorised Representative(JDR) for the Respondent (s) CORAM:
Honble Dr. Chittaranjan Satapathy, Technical Member Date of Hearing:- 18.05.2011 Date of Pronouncement :- 18.05.2011 ORDER NO.
Per Dr. Chittaranjan Satapathy.
1. Heard both sides.
2. The facts of the case are that the Appellants are receiving iron ore and coal in their factory for manufacture of sponge iron. At the material time there was no duty on iron ore and coal and hence no credit of duty in respect of these inputs were taken. However, credit of Service Tax paid by the Appellants in respect of G.T.A. Services utilized for transporting these inputs to their factory has been taken. It is not in dispute that the entire quantity of iron ore and coal have been utilized by the Appellants crushing the same to the desired size of 5-18 mm required for manufacture of sponge iron. In the process, some quantity of fines have been generated which have been sold by the Appellants. The case of the Department is that since part of the inputs have been cleared outside the factory, proportionate amount of Service Tax credit should be reversed.
3. S.K.Mohanty, learned Advocate appearing for the Appellants states that there is no provision for reversal of the Service Tax credit in a case like this. There is only provision for reversal of credit in respect of inputs and capital goods cleared as such. Even in cases where inputs and capital goods have been cleared, the Tribunal and the High Court have held that the Service Tax credit taken on G.T.A. Services for bringing such inputs and capital goods is not required to be reversed. In this connection, he cites the following decisions :-
(a) Chitrakoot Steel & Power Pvt.Ltd. v. CCE Chinnai 2008 (10) S.T.R. 118 (Tri.-Chennai)
(b) Bansal Alloys & Metals Ltd. v. CCE, Chandigarh 2010 (250) E.L.T. 529 (Tri.-Del.)
(c) Commissioner of C.Ex., Chandigarh v. Punjab Steels 2011 (21) S.T.R. 5 (P & H)
4. Learned Departmental Representative supports the impugned order passed by the lower appellate authority.
5. After hearing both sides and perusal of the case records including the cited case law, I find that precedent decisions of the Tribunal as well as of Honble Punjab & Haryana High Court are against the Department. Moreover in this case the entire inputs have been taken into use and subjected to crushing. Only the resultant fines have been sold outside. It cannot be said that the inputs have been cleared as such. Therefore, this case is is on a better footing than those decided by the Tribunal and the Honble High Court earlier. In any case there is no provision for reversal of CENVAT Credit of Service Tax paid on transportation of inputs or capital goods. Hence, the impugned orders passed by the authorities below cannot be sustained and the same are set aside and Appeal is allowed.
(Pronounced and dictated in the open court.) Sd/ (CHITTARANJAN SATAPATHY) TECHNICAL MEMBER sm 3 Appeal No.E/432/2010