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Issues involved: Interpretation of Rule 6(5) of the Cenvat Credit Rules, 2004 regarding availing Cenvat credit on 'Management, Maintenance or Repair Services' under Section 65(105)(zzg) of the Finance Act, 1994.
Summary: The appeal was filed against Order-in-Original No. 68/2012/C, dated 30-11-2012 passed by the Commissioner of Central Excise & Customs, Nagpur. The appellant, M/s. Indo Rama Synthetics (I) Ltd., Nagpur availed Cenvat credit of Service Tax paid on 'Management, Maintenance or Repair Services' for their factory. The dispute arose when the department demanded recovery of proportionate Cenvat credit for electricity supplied to Maharashtra State Electricity Board (MSEB). The case was adjudicated, and the demand was confirmed along with interest and penalties. The appellant argued that as per Rule 6(5) of the Cenvat Credit Rules, 2004, credit of the whole Service Tax paid on specified services shall be allowed even if the service is used partly in relation to the manufacture of exempted goods. Citing relevant case laws, the appellant contended that they are eligible for credit as the electricity was consumed in the manufacture of dutiable and exempted goods. The Revenue reiterated the findings of the adjudicating authority, but the Tribunal found merit in the appellant's contention. The Tribunal noted that Rule 6(5) allows availing credit even if the service is used partly in relation to exempted goods. Referring to a similar case, the Tribunal held that the appellant is entitled to take credit on 'Management, Maintenance or Repair Services' as provided under Rule 6(5) of the Cenvat Credit Rules, 2004. Accordingly, the impugned order was set aside, and the appeal was allowed. The stay petition was also disposed of.
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