In a major relief to the Indian Oil Corporation, the CGST Commissioner allowed the CENVAT Credit on input services used for procurement of Crude Oil.
The Indian Oil Corporation is engaged in receiving as well as providing various taxable services under various categories viz. Goods Transport Operators, Business Auxiliary Services, Consulting Engineer, Maintenance or Repair Service Technical Testing and Analysis, Inspection and Certification, Erector Commission and Installation, Management Consultants, Banking and Financial, Credit Card Related Services, Renting of Immovable Property Services, Commercial Training and Coaching and Supply of Tangible Goods.
They are hailing Service Tax back along with a copy of bill enlisting the charges of electricity consumed over and above the supply made to the grid by them through windmills. They further stated that in the rare eventuality when they draw less from the grid than the subject credit is being reversed by them by resorting to rule 6(3) of the Cenvat Credit Rules, 2004.
The Commissioner, Sunil Singh Katiyar observed that the plea of the party is tenable as electricity produced by the windmill is supplied back to their pipeline network through the grid and therefore the claim of the party that electricity is consumed captively by the mis admissible and consequently the credit is also admissible to them. In any case, the reversal, if necessary, under rule 6(3) is also being made.
The Commissioner further held that Credit on input services used in the manufacture and clearance of dutiable goods upto place of removal i.e., upto terminals /depots in case of domestic clearances and port of export in case of exports is admissible to them and same is available for distribution under input service distribution and party has rightly availed Cenvat credit on various such services on the basis of invoices issued by other offices under the ambit of input service distribution.
“Credit on input services used for procurement of input like crude oil from port of landing to the manufacturing units are also admissible to them and available for distribution under input service distribution as envisaged in Rule 7 of Cenvat Credit Rules, 2004. Accordingly, the CENVAT Credit amounting to Rs 507,65,40,042/- proposed to be denied in Show Cause Notices is available to them and demand of the said amount is not sustainable,” the commissioner added.
The commissioner found that provisions of interest and penalty under rule 14 and 15 of Cenvat Credit Rules 2004 read with section 11 AA and 11 AC of Central Excise Act, 1944 are not applicable on them as the demand is found not sustainable.Subscribe Taxscan AdFree to view the Judgment
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