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2022 (10) TMI 1073 - AT - Central ExciseImproper availment of credit of tax paid - input service - rental of lease-hold land - Period between August 2010 and January 2015 - HELD THAT - It is seen from the records that the appellant had availed credit of tax paid on input service deployed in rendering of output service but had utilized the credit for discharge of duty on output cleared by them. The decision of the Hon ble High Court of Bombay in Deepak Fertilizers Petrochemicals Corporation Ltd v. Commissioner of Central Excise, Belapur 2013 (4) TMI 44 - BOMBAY HIGH COURT does not appear to have been considered either by the original authority or the first appellate authority. It would, therefore, be appropriate for the ascertainment of relevance of these decisions to the specific facts of the dispute. To enable this, the impugned order is set aside and the matter is remanded back to the original authority for subjecting the facts to the test of law as settled by the decision of the Hon ble High Court of Bombay that has thereafter been relied upon in the decisions of the Tribunal. The matter is remanded.
Issues:
Recovery of tax under CENVAT Credit Rules, 2004, interest under Central Excise Act, 1944, and penalty for improper availment of credit on rental of lease-hold land. Analysis: The appeal contested the recovery of tax, interest, and penalty by M/s Rashtriya Chemicals & Fertilizers Ltd for allegedly improperly availing credit on the rental of lease-hold land between August 2010 and January 2015. The dispute revolves around the tax charged on rent billed by the lessor and taken in the CENVAT credit account during the period in question. The appellant claimed entitlement to credit of the tax as an 'input service' under the CENVAT Credit Rules, 2004, arguing that even if the premises were not included in the factory registration, they should still be eligible for credit utilization. The appellant relied on a decision by the Hon'ble High Court of Bombay to support their position, emphasizing the broad definition of 'input service' and the inclusive nature of the rule. The contention was further supported by references to decisions by the Tribunal in other cases. However, the Authorized Representative argued against cross-utilization of CENVAT credit for goods manufactured at separate registered premises, asserting that the lease of the storage tank and land had no connection with the goods' manufacture for which the credit was taken. The records indicated that the appellant had availed credit on 'input service' but used it for discharging duty on 'output' cleared by them. The original and appellate authorities did not consider the High Court's decision, leading to the order being set aside and the matter remanded for a reassessment in light of the legal principles established by the High Court and relied upon in Tribunal decisions. In conclusion, the judgment remanded the case back to the original authority for a thorough examination of the facts in accordance with the legal precedents cited, particularly the interpretation of 'input service' and the applicability of CENVAT credit in the context of the dispute. The decision highlighted the need to align the factual findings with the legal framework to determine the validity of the appellant's claim regarding the credit on the rental of lease-hold land and its utilization for duty discharge.
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