Relief to JSW Steel: CESTAT Quashes Disallowance of CENVAT Credit of Service Tax on input services on ground of Non-violation of rule 2(l) of CCR [Read Order]
![Relief to JSW Steel: CESTAT Quashes Disallowance of CENVAT Credit of Service Tax on input services on ground of Non-violation of rule 2(l) of CCR [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/10/Relief-to-JSW-Steel-CESTAT-Quashes-Disallowance-of-CENVAT-Credit-Service-Tax-on-input-services-on-ground-Non-violation-of-rule-2l-CESTAT-Service-Tax-EXCISE-CUSTOMS-Disallowance-of-CENVAT-Credit.jpg "Relief to JSW Steel: CESTAT Quashes Disallowance of CENVAT Credit of Service Tax on input services on ground of Non-violation of rule 2(l) of CCR [Read Order]")
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to JSW Steel by quashing the disallowance of CENVAT credit of service tax on input services rendered by the assessee on the ground of non-violation of rule 2(l) of the CENVAT Credit Rules (CCR), 2004. JSW Steel Ltd, the appellant assessee was engaged in the business of ‘iron and...
The Mumbai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) granted relief to JSW Steel by quashing the disallowance of CENVAT credit of service tax on input services rendered by the assessee on the ground of non-violation of rule 2(l) of the CENVAT Credit Rules (CCR), 2004.
JSW Steel Ltd, the appellant assessee was engaged in the business of ‘iron and steel products’ and, among the inputs services utilized by them had taken credit of tax discharged on ‘goods transport agency services deployed for the transportation of the finished products to the customers’ premises which thus claimed as on ‘free-on-rail’ (FOR) terms.
The assessee appealed against the order passed by the Commissioner of Central Excise for directing the recovery of Rs. 6,79,48,192/- under rule 14 of CENVAT Credit Rules(CCR), 2004 along with applicable interest while imposing a penalty of like amount under rule 15 CENVAT Credit Rules.
Karthik Dedhia, the counsel for the assessee contended that in the case of Commissioner of Central Excise, Belgaum v. Vasavadatta Cements Ltd, the court held that the manufacturer and clearance of final products up to the place of removal are eligible to avail CENVAT credit.
Xavier R Mascarenhas, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee was not eligible to avail of the CENVAT credit and the disallowance was as per the law and liable to be sustained.
The Bench observed that the service tax paid on the transportation of the final product from the place of removal up to the first point, whether it is the depot or the customer had to be allowed for CENVAT credit.
The two-member bench comprising Ajay Sharma (Judicial) and C J Mathew (Technical) quashed the disallowance of CENVAT credit of service tax while allowing the appeal filed by the assessee.
To Read the full text of the Order CLICK HERE
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