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TMI Blog2024 (7) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... required under Rule 6(2) of the Cenvat Credit Rules, 2004 they have paid an amount equal to 6% of the value of exempted goods cleared by them, as provided under Rule 6(3)(i) of Cenvat Credit Rules, 2004. With regard to the question whether the appellant is entitled to avail Cenvat credit of the service tax paid by the job worker for the activity which amounts to manufacture and thus falls beyond the scope of definition given for Business Auxiliary Service. It is found that the matter has already been decided by the Hon ble Gujarat High Court in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD-III VERSUS NAHAR GRANITIES LTD. [ 2014 (5) TMI 57 - GUJARAT HIGH COURT ] - In view of the above judgment, it can be seen that on both the counts i.e. on the issue of availment of exemption Notification No. 44/2001-CE (NT) dated 26.06.2001 by the supplier and also where even if the duty is not payable by the supplier but the same was paid, Cenvat credit cannot be denied at the recipient end. Consequently, the personal penalty on Shri Omdev R. Mishra is also not imposable. Accordingly, the impugned orders are set-aside and the appeals are allowed. It is held that it is matter of record that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re specifically excluded from the definition of Business Auxiliary Service. The department is of the view that that the availment of Cenvat credit by the appellant amounting to Rs. 55,77,605/- during the period from 2008-09 to 2012-13 on the basis of invoices issued by M/s. Zebra Marketing, is legally not correct and therefore the show cause notice demanding reversal of Cenvat credit under Rule 14 of Cenvat Credit Rules, 2004 read with Section 11A(1) of the Central Excise Act, 1944 was issued which has been adjudicated by the impugned order-in-original dated 21.08.2014 whereunder all the charges as invoked in the show cause notice have been confirmed by the Adjudicating Authority. 2. The learned advocate appearing for the appellant submits that they have availed Cenvat credit of service tax reimbursed by them to their job-workers. It has further been mentioned by the appellant that they have been following the procedure prescribed under Rule 6(2)(i) of the Cenvat Credit Rules, and paying equal to 6% of the value of exempted goods in respect of clearances affected by them availing the exemption from payment of Central Excise duty as per Notification No. 6/2006-CE dated 01.03.2006. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the activity which amounts to manufacture and thus falls beyond the scope of definition given for Business Auxiliary Service. We find that the matter has already been decided by the Hon ble Gujarat High Court in the case of CCE, Ahmedabad vs. Nahar Granites Limited reported under 2014 (305) ELT 9 (Guj.). The relevant extract of the decision is reproduced below:- 7. Rule 3 of the Cenvat Credit Rules, 2004 allows a manufacturer or producer of final product or a provider of taxable service to take Cenvat credit of the duty of excise specified in the First Scheduler to the Excise Tariff Act. Rule 4 of the Cenvat Credit Rules, 2004 lays down the conditions for allowing Cenvat credit. Sub-rule (1) thereof provides that Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Proviso to sub-rule (1) puts certain limitations on such immediate availability of Cenvat credit. We are however, not concerned with the proviso. 8. In terms of Rules 3 and 4 of the Cenvat Credit Rules, 2004, a manufacturer would be entitled to avail the Cenvat credit in respect of the inputs used f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Authorization for duty free import of inputs, they got the same invalidated and obtained invalidation letters in favour of certain domestic suppliers for duty free supply of the inputs. However, domestic suppliers instead of supplying the inputs duty free in terms of Notification No. 44/2001-C.E. (N.T.), dated 26-6-2001 supplied those inputs on payment of duty. The appellant took Cenvat credit of that duty. The Department s contention is that the domestic suppliers in whose favour the invalidation letters had been obtained by the appellant from DGFT for duty free supply, should have supplied the inputs without payment of duty, but since they have paid the duty on these inputs, the amount paid towards duty cannot be treated as Central Excise duty and hence the appellant would not be eligible for its Cenvat credit. We find that this very issue has been considered at length of the Tribunal in the case of M/s. Oleofine Organics (India) Pvt. Ltd. M/s Fine Organics (India) Pvt. Ltd. v. CCE, Thane-I (supra) and the same stands decided in the favour of the appellant. Not only this, as held by the Apex Court in the case of CCE CUS v. MDS Switchgear Ltd. (supra), while considering availabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 2004 duty cast on the appellant that they have to verify supplier of the goods (in case of 100% EOU) that EOU has manufactured the goods supplied to the appellant by using indigenously manufactured inputs which the appellant have failed to do so. In that circumstance, the appellant is not entitled for 100% EOU credit. 5. Heard the parties and considered the submissions. 6. In this case the payment of duty under Serial No. 3 of Notification 23/2003 is not disputed by the parties. The duty cast on the appellant is to verify that the 100% EOU has paid duty under Sr. No. 3 of the said notification when the duty has been paid under Sr. No. 3 of Notification 23/2003-C.E., the same is sufficient to entitlement to the credit to the appellant. In that circumstance, I hold that the appellant has correctly availed the Cenvat credit. Therefore, the impugned order deserves no merits, hence set aside. Consequently, the appeal is allowed with consequential relief, if any. 6. In view of the above judgments, it can be seen that on both the counts i.e. on the issue of availment of exemption Notification No. 44/2001-CE (NT) dated 26.06.2001 by the supplier and also where even if the duty is not pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 6/2006-CE ibid during the period from 2008-09 (January 2009) to 2012-13 (upto December 2013), Exhibit 'A' also explains that some of the input service credit taken by them for various types of work such as Maintenance and Management of dumpsite, Sand Rows and unloading/stacking of coated pipes carried out by the job worker i.e. M/s. Zebra Marketing. (d) They submitted that since they have availed credit on common input services which have been used both in the manufacture of dutiable and exempted goods and have not maintained separate accounts with respect to dutiable and exempted final products as mandated in Rule 6(2), they were duty bound to have followed Rule 6(3), which have been duly complied by them. They have, as provided in Rule 6(3)(i), paid an amount equal to 6% of the value of the exempted goods cleared by them as envisaged in Rule 6(3)(i). The respondent/assessee M/s. Welspun Corp. Limited in their cross-objection has mentioned that cement coated pipes obtained from M/s. Zebra Marketing were being cleared by the assessee M/s. Welspun Corp. Limited on payment of appropriate duty of excise as well as the same were also cleared to SEZ without payment of duty. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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