2016 (8) TMI 629 - AT - Service Tax

Full service tax credit - eligibility - service tax paid on crushing charges to the job worker - Held that - there is no allegation that the services are not availed by the appellant. The denial of a part of credit is only on the ground that the quantity of crushed ore received by the appellants is less than the quantity of lump ore on which the crushing charges were paid. As pointed out by the appellant, the very same issue has been decided by the Tribunal s various decisions. One such decision, is on the same set of facts. Therefore, by considering the same i.e. Indian Steel and Power Pvt. Ltd. Versus CCE, Raipur 2015 (12) TMI 1491 - CESTAT NEW DELHI , there is no justifiable reasons for denial of part of credit of service tax availed by the appellants. - Decided in favour of appellant

Summary

Issues:
Eligibility for full service tax credit on crushing charges paid for crushing lump ore to powder.

Analysis:
The case involved an appeal against the orders of the Commissioner (Appeals) regarding the denial of part of the service tax credit on crushing charges paid by the appellants for converting lump ore to powder. The appellants, engaged in the manufacture of Sponge Iron, were availing service tax credit on the crushing charges. The Revenue sought to deny the credit on the grounds that the services were not used as input services in the manufacturing process due to the reduced quantity of ore received after crushing. The appellant argued that they had paid service tax for the full quantity of crushed ore received and there was no diversion of ore from the job worker. They cited previous decisions in similar cases to support their claim.

The Tribunal examined the appeal records and focused on the eligibility of the appellant for full service tax credit on the crushing charges paid. It was noted that there was no dispute regarding the appellant availing the services, and the denial of credit was solely based on the reduced quantity of crushed ore received compared to the lump ore on which the charges were paid. The Tribunal considered the appellant's argument, along with previous decisions, including one involving Indian Steel and Power Pvt. Ltd., where the denial of credit was not justified in similar circumstances. Based on the settled position and precedents, the Tribunal found no justifiable reason to deny part of the service tax credit to the appellants. Consequently, the impugned orders were set aside, and the appeals were allowed.

In conclusion, the Tribunal ruled in favor of the appellants, allowing them full service tax credit on the crushing charges paid for converting lump ore to powder. The decision was based on the lack of justification for denying the credit due to the reduced quantity of crushed ore received, as established by previous Tribunal decisions and the appellant's compliance with service tax payments for the services availed.