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TMI Blog2024 (10) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of right to use natural resources of the government.' - As issue has already been settled by the decision of this Trbunal for water supply by Government of Odisha, the appellant is not liable to Service Tax. Therefore, issue is no more res-integra and appellant is not liable to pay Service Tax. Re-availment of Cenvat Credit subsequent to change of option under Rule 6(3) of the Cenvat Credit Rules, 2004 - HELD THAT:- The appellant has intimated to the Department vide letters dated 01.12.2016 and 12.01.2017 and which were in well knowledge of the Department. Therefore, no suppression can be alleged against the appellant. Therefore, no demand can be raised against the appellant for re-availment of credit subsequent to change of option under Rule 6(3) of the Cenvat Credit Rules, 2004. Therefore, the demand of Rs. 183,09,57,095/- is set aside. Cenvat Credit availed on invoice after one year of the issuance - HELD THAT:- The same has been shown by the appellant in the ER-1 return which was filed on 12.01.2017 and which has well within the knowledge of the Department in 2017 itself, therefore, no suppression of facts can be alleged against the appellant. Therefore, Cenvat credit ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) of the Finance Act, any service provided by the Government to Business entities are taxable and further as per serial no. 59 of the mandate Notification No. 25/2012-ST dated 20.06.2012 only the assignment of natural resources to an individual farmer for the purpose of farming is exempted from the levy of Service Tax. Therefore, supply of water by Government of Odisha to appellant is liable to Service Tax. 2.4. On that account, the Service Tax was demanded to the tune of Rs. 2,21,57,352/-. Further, the appellant has re-availed the Cenvat Credit subsequent to change of option under Rule 6(3) of Cenvat Credit Rules, 2004. The sequence pertaining to the said dispute are explained here below: M/s Indian Oil Corporation Limited ('Appellant) is a Public Sector Undertaking under the administrative control of Ministry of Petroleum Natural Gas and is engaged in the activity of operating and supplying petroleum products to entire India through its multiple refineries located across India, including the one at Paradip. 2. Audit was conducted on 07.01.2020 and 11.02.2020 and the underlying Show Cause Notice dated 23.11.2020 was issued proposing to demand Rs. 186,76,11,276/- along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015- 16) 7. The sequence of events pertaining to the dispute surrounding Rule 6(3) of the CCR are explained below (a) 10.05.2016 and 29.06.2016 The Appellant intimated the department of reversal of credit amounting to Rs. 183,09,57,095/-on LPG and SKO supplied for PDS supplies, viz. exempt supplies, by applying the formula under Rule 6(3A) for reversal of CENVAT credit for the FY 2015-16. (b) 01.12.2016 - The Appellant intimated to the Department regarding change of option for the entire FY 2015-16, for reversal of credit from Rule 6(3A) to Rule 6(3)(i) of the CCR, viz. 6% of the value of exempted goods. (c) 06.01.2017-Since the Department did not raise any objections against the letter dated 01.12.2016, the Appellant determined the ineligible credit as per Rule 6(3)(1) and paid the same along with interest, totaling to Rs. 27,07,77,857 by way of Challan dated 06.01.2017. (d) 12.01.2017 - The payment as per Rule 6(3)(i) vide Challan dated 06.01.2017 and further re-availment of already reversed credit amounting to Rs. 183,09,57,095/- since the Appellant has fulfilled Rule 6(3) by opting for Rule 6(3)(i) was intimated to the Department. It is pertinent to note that even at this point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empt on the basis of their end-use terms as per Sl. No. 81 and Sl. No. 72 of the Notification No. 12/2012 CE dated 17.03.2012 respectively. 9. It is his submission that it is a settled law that when the assessee manufactures dutiable products and a small portion of the same is also cleared without payment of duty based on some end-use exemption notification, the provisions for reversal of ineligible credit is not applicable. To support this contention, he relied on the decision of the Hon‟ble Madras High Court in the case of Commissioner of Central Excise, Thirunelveli v. DCW Ltd. -2011 (274) E.L.T. 183 (Mad.) and the said decision has been affirmed by the Hon‟ble Supreme Court in the case of Union of India v. Hindustan Zinc Ltd. -2014 (303) E.L.T. 321 (S.C.). He further submitted that the provisions of Rule 6(3) are not applicable to LPG being cleared without duty based on an exemption certificate. 10. It is further submitted that LPG and SKO are by-products during the process of refining of crude oil. Therefore, provisions of Rule 6(3) of the CCR are not applicable for by-products. To support this contention he relied upon the decision of Nayara Energy LTd. v. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legation for invoking extended period of limitation. As the sole finding in the Show Cause Notice is that it is not for the audit, if it is not for the audit the facts of the case would have not been unearthed. It is his submission that such allegation is in vain business and cannot be the reason for invoking extended period of limitation. 20. As the Revenue has failed to show positive efforts of suppression to know extended period of limitation, it is further submitted that the appellant being a PSU, under Ministry of Petroleum and Natural Gas, Government of India, possibility of conducting any clue of suppression and representation, does not arise. 21. It is further submitted that as appellant being PSU and agreement with the Government of Odisha, in that circumstances on the supply of water by Government of Odisha to appellant cannot be held that there is suppression of fact on behalf of the appellant to invoke extended period of limitation. For re-availment of Cenvat Credit subsequent to change of option of the Rule 6(3) of the CCR, the appellant has intimated to the Department vide letter dated 01.12.2016 and 12.01.2017 regarding the change of option and re-availment of alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the appellant submits that the issue involved in this case stands settled by this Tribunal in the case of Sasan Power Limited Vs. Commissioner of CGST Excise, Jabbalpur vide Final Order No.55672/2024 dated 30.04.2024. Therefore, the impugned order is to be set aside. 4. On the other hand, the Id.A.R. for the Revenue, reiterated the findings of the adjudicating authority. 5. Heard both the parties and considered the submissions. 6. We find that the issue involved in this matter is whether the appellant is liable to pay service tax in terms of Section 65B (44) of the Finance Act, 1994 under the category of allocation/auction of natural resources or not? The said issue has been examined by this Tribunal in the case of Sasan Power Limited (supra), wherein this Tribunal has observed as under : 16. Section 40 of the Madhya Pradesh Irrigation Act, as noticed above, deals with supply of water for industrial, urban or other purposes and it provides that the charges shall be as agreed upon between the State government and the company and fixed in accordance with the rules made under the Act. Rule 71A also provides that water may be supplied with the prior permission of the State g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above observations, we set aside the impugned order and allow the appeal with consequential relief, if any. 26. As issue has already been settled by the decision of this Trbunal for water supply by Government of Odisha, the appellant is not liable to Service Tax. Therefore, issue is no more res-integra and appellant is not liable to pay Service Tax. 27. With regard to the issue of re-availment of Cenvat Credit subsequent to change of option under Rule 6(3) of the Cenvat Credit Rules, 2004, the appellant has intimated to the Department vide letters dated 01.12.2016 and 12.01.2017 and which were in well knowledge of the Department. Therefore, no suppression can be alleged against the appellant. Therefore, no demand can be raised against the appellant for re-availment of credit subsequent to change of option under Rule 6(3) of the Cenvat Credit Rules, 2004. Therefore, the demand of Rs. 183,09,57,095/- is set aside. 28. With regard to Cenvat Credit availed on invoice after one year of the issuance as the same has been shown by the appellant in the ER-1 return which was filed on 12.01.2017 and which has well within the knowledge of the Department in 2017 itself, therefore, no su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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