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2013 (11) TMI 1206 - AT - Central ExciseNexus between the manufacture of finished goods with Input as provided in Rule 2(k) of CC Rules 2004 - Waiver of Pre-deposit of Cenvat credit Penalty under Rule 15(2) of CC Rules r.w. Section 11AC of CE Act 1944 - Revenue was of the view that the duty paid on fixed facility charges cannot be available as Cenvat Credit to the applicant as the payment of duty Held that - Following COMMISSIONER OF C. EX., HYDERABAD V/s AUROBINDO PHARMA LTD. 2009 (3) TMI 908 - CESTAT BANGALORE - The appellant were charging as fixed facility charges - The appellant are receiving Oxygen gas from M/s. Goyal MG Gases (P) Ltd., a company situated within their own premises - For manufacture and supply of Oxygen, the applicant has provided certain facility to M/s. Goyal MG Gases (P) Ltd. in their factory premises - the applicant has not only availed Cenvat Credit on the amount of excise duty paid on the Oxygen gas, but also availed Cenvat Credit on the duty paid on fixed facility charges, as a part of the value of the Oxygen gas - Prima facie the applicant could able to make out a prima facie case for total waiver of pre-deposit of dues - stay granted.
Issues:
Application seeking waiver of pre-deposit of Cenvat Credit and penalty imposed under Rule 15(2) of Cenvat Credit Rules read with section 11AC of Central Excise Act, 1944. Analysis: The appellant, a public sector undertaking, entered into an agreement with M/s. Goyal MG Gases (P) Ltd. for the purchase of Oxygen gas. The Revenue contended that availing Cenvat Credit on the duty paid on 'fixed facility charges' by M/s. Goyal MG Gases (P) Ltd. was not permissible as it lacked nexus with the manufacture of finished goods. The appellant argued that the facility charges were linked to the sale or supply of Oxygen gas and cited the agreement's definition of 'fixed facility charges' to support their claim. They relied on precedents, including a judgment by the Bangalore Bench of the Tribunal, to establish the validity of claiming Cenvat Credit on fixed facility charges. The Revenue countered by highlighting that fixed facility charges were distinct from the sale of Oxygen gases, as evidenced by separate invoices. They argued that even in the absence of manufacturing or supply of Oxygen gases, the applicant was obligated to pay fixed facility charges as per the agreement. Referring to a Supreme Court judgment, the Revenue contended that since the value of fixed facility charges could not be included in the value of Oxygen, Cenvat Credit on such charges was not permissible. They sought to differentiate the present case from the Aurobindo Pharma Ltd. judgment, claiming discrepancies in the facts. Upon review, the Tribunal found that the appellant received Oxygen gas from M/s. Goyal MG Gases (P) Ltd. under the agreement and had availed Cenvat Credit on both the duty paid on Oxygen gas and fixed facility charges. Citing the Aurobindo Pharma Ltd. case, the Tribunal emphasized that if the supplier had discharged duty liability and the recipient used the input in manufacturing final products, availing Cenvat Credit was justified. The Tribunal noted the similarity between the facts of the present case and the Aurobindo Pharma Ltd. case, leading to a prima facie case for waiving the pre-deposit of dues adjudged. Consequently, all dues were waived, and recovery stayed pending the appeal. In conclusion, the Tribunal granted the waiver of pre-deposit based on the established nexus between the fixed facility charges, Oxygen gas supply, and the manufacturing process, aligning with legal precedents and the factual similarity to the Aurobindo Pharma Ltd. case.
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