2018 (5) TMI 194 - AT - Central Excise

Reversal of CENVAT credit - Oxygen Gas cleared for medical purposes - whether the appellant are required to discharge 5%/6% of the value of the exempted products i.e. Oxygen Gas cleared for medical purposes? - Held that - the appellant have adduced sufficient evidences viz the Chartered Accountant s Certificate and a communication from the buyer which established the fact that they have not utilized the manpower supply service in selling/ clearing oxygen for medical purposes. Tribunal in the case of M/s Aims Industries Ltd. Versus C.C.E. And S.T. Vadodara-i 2018 (5) TMI 93 - CESTAT AHMEDABAD , has already taken a view that in the event credit on input service viz. manpower supply service was not used in providing the service for clearing Oxygen Gas for medical purposes, there was no requirement of payment of 5%/6% of the value of the Oxygen cleared for medical purposes under Rule 6(3) of CCR 2004. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Whether the appellant is required to discharge 5%/6% of the value of exempted products, specifically Oxygen Gas cleared for medical purposes.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved an appeal against an order passed by the Commissioner (Appeals) Central Excise, Vadodara. The central issue was whether the appellant was obligated to discharge 5%/6% of the value of Oxygen Gas cleared for medical purposes. The appellant argued that since they did not avail CENVAT credit on the input service used for supplying Oxygen Gas for medical purposes, Rule 6(1) of the Cenvat Credit Rules, 2004 did not apply to them, and thus, there was no requirement to discharge the said percentage of the exempted product. The appellant cited a previous Tribunal order that supported their position. They provided a Chartered Accountant's Certificate and a certificate from the purchaser of Oxygen Gas, demonstrating that the manpower supply service on which credit was availed was not utilized in clearing the Oxygen for medical purposes. However, the lower authorities did not consider these certificates. On the other hand, the Revenue supported the findings of the lower authority.

The Tribunal noted that a previous order had determined that if credit on the input service (manpower supply service) was not used for providing the service of clearing Oxygen Gas for medical purposes, then there was no obligation to pay the 5%/6% value under Rule 6(3) of the Cenvat Credit Rules, 2004. In the present case, the appellant presented substantial evidence, including the Chartered Accountant's Certificate and communication from the buyer, proving that they did not utilize the manpower supply service for selling or clearing Oxygen for medical purposes. The Revenue did not provide any contradictory evidence. Consequently, the Tribunal set aside the impugned order and allowed the appeal with any consequential relief as per the law.

In conclusion, the judgment favored the appellant based on the evidence provided and the interpretation of the relevant rules regarding the discharge of the value of exempted products, specifically Oxygen Gas cleared for medical purposes, when credit on input services was not utilized for the said purpose.