Denial of Credit of Service Tax Merely on Ground that Coal and Iron ore Mines Situated Away from Factory being Separate Entities is Invalid: CESTAT [Read Order]
![Denial of Credit of Service Tax Merely on Ground that Coal and Iron ore Mines Situated Away from Factory being Separate Entities is Invalid: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/07/Denial-of-Credit-of-Service-Coal-and-Iron-ore-Mines-Situated-Away-from-Factory-Coal-and-Iron-ore-Mines-CESTAT.jpg "Denial of Credit of Service Tax Merely on Ground that Coal and Iron ore Mines Situated Away from Factory being Separate Entities is Invalid: CESTAT [Read Order]")
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that denial of credit of service tax merely on the ground that coal and iron ore mines situated away from the factory are separate entities is invalid. M/s. Usha Martin Limited, the Appellant engaged in the manufacture of dutiable iron and steel products falling under Chapter 72 of the CETA. ...
The Kolkata Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that denial of credit of service tax merely on the ground that coal and iron ore mines situated away from the factory are separate entities is invalid.
M/s. Usha Martin Limited, the Appellant engaged in the manufacture of dutiable iron and steel products falling under Chapter 72 of the CETA. Iron ore and coal are essential inputs for the manufacture of the said dutiable final products.
The Appellant was awarded a Captive Coal Mines (Kathautia) and Captive Iron Ore Mines (Bokna) at Jamshedpur under mining leases dated 15 October 2007 and 16 August 2005 respectively granted by the Jharkhand State Government. The entire quantity of coal and iron ore mined at Kathautia and Bokna respectively were transferred to the said manufacturing facility for use in the manufacture of dutiable goods save and except iron ore rejects which were not compatible with processing at the manufacturing facility.
The manufacturing facility operated under the Cenvat Credit Scheme and, inter alia, availed full/proportionate credit, as the case may be in respect of services rendered at the two mines including the services required for transportation of coal/iron ore from the respective Captive Mines to the manufacturing facility. Such credit was availed either on the strength of invoices issued by the supplier of services or based on ISD invoices issued by the Bokna Iron Ore Mines.
A two-member bench comprising Shri P K Choudhary, Member(Judicial) and Shri K Anpazhakan, Member(Technical) held that “the denial of credit of service tax by the Commissioner in the instant case is unsustainable. We also find that the statutory ER-I returns were being filed along with a statement containing invoice-wise details of the credit taken and the ISD registration was obtained after disclosing all the relevant facts vide letter dated 25 April 2008 addressed to the Superintendent, Jharkhand Commissionerate.”
The CESTAT set aside the impugned order and penalty.
To Read the full text of the Order CLICK HERE
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