2013 (7) TMI 432 - AT - Central Excise

Cenvat Credit on GTA Service - transportation of sugar cane - The adjudicating authority has found a nexus between the said service and the generation of electricity in the captive power plant maintained by the appellant. It is the case of the Revenue, that as the bagasse generated as waste in the manufacture of sugar from sugar cane was used as fuel for generating steam, which was, in turn, used to turn turbine for generating electricity, which, in turn, was partly used captively for running the sugar manufacturing plant and partly sold outside, there was no nexus between the said input service and the manufacture of sugar and, therefore, the CENVAT credit taken on that service was not admissible to the appellant. - Held that - prima facie the view taken by the adjudicating authority is not sustainable - stay grated.

Summary

Issues:
1. Denial of CENVAT credit on GTA service used for transportation of sugar cane to the sugar factory.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore involved a case where the appellant was facing an impugned demand of Rs.13,35,159 arising from the denial of CENVAT credit on GTA service used for transporting sugar cane to the sugar factory. The adjudicating authority had found a nexus between the service and the generation of electricity in the captive power plant maintained by the appellant. However, the Revenue contended that there was no nexus between the input service and the manufacture of sugar, leading to the reversal of the credit sought by the adjudicating authority.

Upon reviewing the records and hearing both sides, the Tribunal found a prima facie case for the appellant against the impugned demand. The Tribunal held that the view taken by the adjudicating authority was not sustainable on facts or in law. Consequently, the Tribunal granted waiver of predeposit and stay of recovery concerning the duty amount, interest, and penalty imposed on the appellant. The judgment was pronounced and dictated in open court by the Member (Judicial) of the Tribunal.

This detailed analysis of the judgment highlights the key issues of denial of CENVAT credit on GTA service for transporting sugar cane and the Tribunal's decision to grant relief to the appellant based on the lack of nexus between the input service and the manufacture of sugar as argued by the Revenue.