Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO. 1
EXCISE Appeal No. 13661 of 2013-SM
(ARISING OUT OF OIA-RJT-EXCUS-000-APP-314-316-13-14 DATED- 30.07.2013 PASSED BY COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX-RAJKOT( APPEAL))
SANGHI INDUSTIRES Ltd
VERSUS
C.C.E. & S.T.-RAJKOT
WITH
EXCISE Appeal No. 13662 of 2013-SM
(ARISING OUT OF OIA-RJT-EXCUS-000-APP-314-316-13-14 DATED- 30.07.2013 PASSED BY COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX-RAJKOT( APPEAL))
SANGHI INDUSTIRES Ltd
VERSUS
C.C.E. & S.T.-RAJKOT
AND
EXCISE Appeal No. 13663 of 2013-SM
(ARISING OUT OF OIA-RJT-EXCUS-000-APP-314-316-13-14 DATED- 30.07.2013 PASSED BY COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX-RAJKOT( APPEAL))
SANGHI INDUSTIRES Ltd
VERSUS
C.C.E. & S.T.-RAJKOT
APPEARANCE:
Shri. R. Subramanya, Advocate for the Appellant
Shri. Prakash Kumar Singh, Superintendent (Authorised Representative) for the Respondent
CORAM: HON’BLE MR. SOMESH ARORA MEMBER (JUDICIAL)
Final Order No. A/ 10775-10777 /2023
SOMESH ARORA
DATE OF HEARING: 31.03.2023 DATE OF DECISION:31.03.2023
In the three appeals, the period involved in the first show cause notice is March 2005 to February 2006, in the second show cause notice is June 2007 to December 2007 and in the third show cause notice is January 2008 to December 2008.
1.1 The appellants are registered separately for their two units for the purpose of Central Excise as a clinker unit and grinding unit though under the same umbrella company. From 21.02.2008, the appellants got themselves registered as an input distributor for the whole company. Bulk of the dispute pertains to period prior to that barring the period in the third show cause notice which has an overlapping period after they were registered as an input distributor from 21.02.2008 to December 2008. The learned advocate for the appellant has relied on the decision in their own case as reported in 2019 12 TMI 528 of the Division Bench of this Tribunal and also on 2017 8 TMI 1425 (Guj. High Court) in the matter of Commissioner vs Reliance Industries Limited, to emphasize that various services i.e. Dredging services at Nalia Port, Maintenance and Repair Service, Manpower Supply Service at power plant, Man Power supply Service received in grinding unit, Rent a Cab services, Advertising Services and Rental Charges etc. for which credit has been sought to be disallowed are covered under inputs used in relation to business, as given in the findings of the two decisions cited by them. Therefore, he emphasized that following the ratios of these two decisions, the benefit should be granted to them.
- Learned authorized representative, on the other hand, puts on record the status ofthe order relied upon by the learned advocate in the matter of
M/s Sanghi Industries Limited, clinker unit and emphasized that the department is agitating further in the matter. He also relies upon the order of the Commissioner (Appeals) to emphasize that Commissioner (Appeals) has correctly held that when the two units are segregated and are registered separately under the Central Excise Regime, they have to be treated differently barring the treatment which those may receive as per the provisions when they get registered as input distributor for their head office. He emphasized that this point, in decision was adequately considered by the learned Commissioner while giving his order, as also that the learned Commissioner pointed out that unlike the earlier order, the dredging services were provided at the port of different party and therefore, could not have entitled the present appellants in this matter.
- From the order of M/s Sanghi Industries Limited vs CCE as reported in 2019 12 TMI 528 CESTAT Ahmedabad, it appears that the Division Bench of this Tribunal had elaborately discussed various services and after treating same as input services, had come to the conclusion that the same were in relation to business and therefore, the input credit was permissible. Also the decision quoted of Hon’ble Gujarat High Court in the matter of Commissioner vs Reliance Industries Limited as relied upon by the Advocate brings Dredging Services within the encompass of input service. Apart from this on merits, however it is found that the learned Commissioner (Appeals) did not have the benefit of going through the decision of this Hon’ble Tribunal as well as the scope of dredging service and whether input credit of same will be permitted only, when the same is supplied at the jetty of the appellants or even at other points, where such service is charged from them. Therefore, there is enough ground to remit the matter to Commissioner (Appeals) to apply the decisions to the facts of the case, while keeping his own observations of separate registrations existing for the two units for most of the period barring from February 2008 to December 2008,
which may call for a differential treatment, even if separate registrations were existing earlier. Also the learned Advocate has brought on record the decision of Surya Pharmaceuticals Limited vs Commissioner of Central Excise, Chandigarh reported in 2016 (43) STR 479 (Tri-Chennai) as well as on 2014 (308) ELT 535 (Tri-Ahm) in Alembic Limited vs CCE Vadodara-II to emphasize that if the exercise is Revenue neutral and input credit is otherwise permissible then penalty cannot be imposed and extended period cannot be invoked while allowing the Cenvat credit to be taken however, interest for intervening period is chargeable. The Learned Commissioner (Appeals) while considering the matter will also consider the scope of this decision. As learned Authorized Representative has pointed out that the matter in the earlier decision of Sanghi Industries is pending before the Hon’ble High Court of Gujarat, though, no stay has been brought on record before this court, it is also directed that the learned Commissioner (Appeals) may consider the outcome of the decision in case same is available at the time of taking decision, in this remand proceedings. Matter is accordingly, remanded to Commissioner (Appeals). Appeal allowed by way of remand.
(Dictated and pronounced in the open court)
NEHA
(SOMESH ARORA) MEMBER (JUDICIAL)
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