Anil Choudhary DECISION
Anil Choudhary, Member (J)
1. The issue in this appeal is whether the appellant have rightly taken credit of service tax on port charges etc. in the facts that they had purchased the goods from high sea seller and some of the invoices for port services etc. were in the name of high sea seller, but in fact have been paid by the appellant who have filed Bill of Entry for home consumption, and such Bill of Entry also mentioned the name of the original importer (who sold on high sea sale basis).
2. The appellant is a manufacturer of M.S. Billets, falling under Chapter sub-heading 72071920 of the Central Excise Tariff Act, 1985 and is registered with the Central Excise Range, Bharatpur, vide Registration No. AGCM5635GEM001. That the appellant was also availing the cenvat credit facility of input and input services, for the manufacture of their final product.
3. That the appellant had purchased 'melting iron scrap' on 'high sea sales' from high sea seller namely; (i) M/s. Utkal Steel Pvt. Ltd., Mumbai, (ii) Utkal Steel Intrade Pvt. Ltd., Mumbai, (iii) M/s. A.A. International, (iv) M/s. Rathi Industries Ltd., & (v) Sudama Exports Pvt. Limited.
4. Accordingly, the appellant has taken cenvat credit of Rs. 14,09,763/- during the period 2010-11 to 2012-13. In the course of audit it appeared to Revenue that the appellant have wrongly taken cenvat credit on the strength of improper document of input service, mainly for the reason that some of the invoices are not issued in their name but are issued in the name of the high sea seller who sold the goods to the appellant on high sea sale basis. On the demand made by the Superintendent pursuant to audit, the appellant took the stand vide their letter dated 16.10.2014, that they were eligible to take the credit disputed by the Revenue.
5. However, it appeared to Revenue that credit under dispute is in contravention of Rule 9(i) and (ii) of Cenvat Credit Rules and is recoverable. It further appeared that the appellant had not intimated to the Department the taking of credit on improper documents prior to discovery during audit, and accordingly extended period of limitation is invokable under the provisions of Section 11A/11A(4) of the Central Excise Act. Accordingly, show cause notice was issued proposing the recovery of the aforementioned amount with interest and penalty was also proposed.
6. The appellant contested the show cause notice inter-alia urging that they have purchased melting scrap for manufacture of M.S. billets which is an input and have accordingly availed cenvat credit on the input services used in bringing the raw material to the factory, as allowable under Rule 2(l) read with Rule 3 of Cenvat Credit Rules, 2004. It was further urged that the Revenue have earlier also conducted audit by internal Audit party, Central Excise Commissionerate on 19-20.09.2013. It was further urged that input is defined in Rule 2(k) of Cenvat Credit Rules, means - all goods used in factory by the manufacturer of the final product and further input services as defined in Rule 2(l) - includes all services used by the manufacturer for manufacture of dutiable goods. It was also urged that in the facts and circumstances, the appellant having purchased the input on high sea sale basis from the original importer (in whose name the bill of lading existed), all the documents cannot be in the name of the appellant, as it is practice in the trade that the various service providers for port charges, clearance charges, etc. raised the invoices for their services in the name of the party whose name appear in t........