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2016 (10) TMI 32 - AT - Central ExciseReversal of Cenvat credit - Whether the appellant is liable to reverse the proportionate CENVAT Credit taken on service tax paid in respect of GTA service utilized for transportation of sugar cane on the ground that a portion of GTA service involved is attributable to sugar cane used for manufacture of bagasse which is in turn is used for generation of electricity - Held that - the issue involved is no more res integra in terms of the decision of Hon ble Allahabad High Court in the case of Balrampur Chini Mills Ltd Vs UOI 2013 (1) TMI 525 - ALLAHABAD HIGH COURT wherein the Board Circular No. 904/24/2009-CX dated 28/10/2009 requiring reversal of credit or payment of amount in terms of Rule 6 stands quashed. Therefore, by following the same, the impugned order is set aside. - Decided in favour of appellant
Issues:
1. Liability to reverse proportionate CENVAT Credit on service tax paid for GTA services used in transportation of sugar cane due to generation of electricity. Analysis: The appeal in question challenged the Order-in-Appeal dated 12.12.2012, which partially upheld the order-in-original concerning the availing of CENVAT credit on service tax paid for GTA services used in transporting sugar cane. The appellants, manufacturers of sugar and related products, utilized bagasse waste for generating electricity, a portion of which was sold during a specific period. A show-cause notice was issued for demanding proportionate CENVAT Credit on input services wrongly availed towards electricity sold outside. The Assistant Commissioner confirmed the demand, imposed a penalty, and the Commissioner (Appeals) upheld the order but reduced the penalty. The central issue was whether the appellant should reverse the proportionate CENVAT Credit due to the generation of electricity from bagasse, which was used in manufacturing excisable goods. During the hearing, the appellant cited legal precedents to support their case. They referred to the decision of the Hon'ble Allahabad High Court in the case of Balrampur Chini Mills Ltd Vs UOI, where the Board Circular requiring reversal of credit was quashed. Additionally, they highlighted other cases such as UOI Vs DSCL Sugar Ltd, Gularia Chini Mills Vs UOI, and CCE Vs Shree Datta SSK Ltd, where similar issues were settled in favor of the assessee. Relying on the precedents and the legal principles established in those cases, the Judicial Member concluded that the issue was squarely covered in favor of the appellant. Consequently, the appeal was allowed, setting aside the impugned order with any consequential relief that may apply. This judgment provides clarity on the liability to reverse CENVAT Credit on service tax paid for GTA services used in transporting sugar cane for the generation of electricity. By referencing relevant legal precedents, the Judicial Member established a clear legal basis for allowing the appeal and overturning the previous decisions. The decision underscores the importance of legal principles and precedents in resolving complex tax matters and upholding the rights of the appellant in availing CENVAT Credit in accordance with established legal interpretations.
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