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TMI Blog2020 (2) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... of steel or even refrigerators etc. are made up with metal which had originally come out as a product of mining of the ore. For that reason, all these cars, washing machines, refrigerators etc. do not become products of mining. Otherwise, everything that we use must be classified as a product of agriculture or mining or forests which is absurd. What is relevant is that activity which produces the goods in question which in this case is the oil mill. As far as the payment in question is concerned, the demand is on the entire amount which the appellant has received under the agreements - the appellant is also getting paid a separate amount for storage in their godown from their clients apart from the amounts which they receive for the stevedoring services. This is confined to cargo stored beyond a certain period. Undoubtedly, such service is in the nature of storage and warehousing service and is chargeable to service tax as such. In our considered view, the demand on the appellant has to be restricted to the extent the amounts which they have received towards godown rents separately for storage over and above the normal stevedoring charges. The appellant is not liable to pay servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g CESS) under the head of 'Storage & Warehousing Services' for Soya Bean Meal, for the period 2004-05 to 2008-09 in respect of the services which they rendered. They also came to the conclusion that they had, in violation of the provisions of Rule 6(3)(c) of CCR, 2004, utilized Cenvat credit to the extent of 100% in respect of common input services while they should have utilized only 20% of this credit as per the rules prevalent during the period. Accordingly, a show cause notice was issued : (a) Demanding service tax amounting to ₹ 1,37,12,690/- for the period 2004-05 to 2008-09 along with interest, under Section 75 of the Finance Act, 1994. (b) Proposing to impose penalties under Sections 76 & 78. (c) Seeking to deny and recover an amount of ₹ 49,69,486/- being the irregularly utilized Cenvat credit in cash under the proviso to sub-section (1) of Section 73 of the Finance Act, 1994, read with Rule 14 of CCR, 2004 along with interest. (d) Proposing to impose penalty upon them under Section 78 of the Finance Act, 1994 read with Rule 15 of CCR, 2004. 4. After following due process, the Ld. Commissioner, by the impugned order, has confirmed the demands alon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cargo is received by rail and directly taken to port for shipment 325.00 177.00 305.00 4. Where cargo is received by road and directly taken to port for shipment 255.00 107.00 235.00 Notes : (i) Above rates are inclusive of one month free storage and for tween decker vessel. Rebate of ₹ 25/- pmt will be available to TIA for bulk carriers. (ii) Further rebate of ₹ 10/- pmt will be available where quantity handling crosses 100,000 mts and additional ₹ 5/- pmt where quantity handled crosses 150,000 mts. It is understood that the rebate will be given only for the quantity exceeding the limits mentioned above." 6. The agreement also indicates that a godown rent will be charged @ ₹ 35/- per month or part thereof on weekly basis for shipment quantity stored in covered warehouse and ₹ 20/- per month or part thereof on weekly basis for shipment quantity weight for cargo stored in open. The appellant was forbidden in making any additional claims for expenses on any ground whatsoever. Ld. Counsel would submit that the text of the agreement would show that they had entered into a composite agreement for stevedoring and cargo handling. These act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the period (up to 1-4-2008) was as follows : "Rules 6 of Cenvat Credit Rules as on 1-6-2007 (1) The Cenvat credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or exempted services, except in the circumstances mentioned in sub-rule (2) : Provided that the Cenvat credit on inputs shall not be denied on job worker referred to in Rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that Rule. (2) Where a manufacturer or provider of output service avails of Cenvat credit in respect of any inputs or input services and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Per contra, Ld. DR supports the impugned order and asserts that the adjudicating authority has correctly confirmed the demands on storage and warehousing services and also has ordered recovery of the wrongly availed Cenvat credit. 12. We have considered the arguments on both sides and perused the records. As far as the demand of service tax under the head 'Storage and Warehousing Services' is concerned, we do not find any force in the argument of the Ld. Counsel that Soya Bean Meal is an agricultural produce. It is true that soya bean is an agricultural produce but once the soya beans reach the oil mill, they extract soya oil and what is left over is the soya bean meal. Soya oil and soya bean meal are two products of the oil extraction industry. It cannot be said that soya bean meal is an agricultural produce just as a cotton fabric or a cotton garment cannot be called as an agricultural produce simply by virtue of the fact that cotton which is the initial raw material was a crop. Similarly, articles of steel or even refrigerators etc. are made up with metal which had originally come out as a product of mining of the ore. For that reason, all these cars, washing mac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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