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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, MADRAS
MS. JYOTI BALASUNDARAM, J.
Pallipalayam Spinners (P.) Ltd. -Appellant
Versus
Commissioner of Central Excise, Salem -Respondent
FINAL ORDER NO. 818/2010 APPEAL NO. ST/92/2010
Decided On : 26-07-2010
Ms. L. Maithili,T.H. Rao
1. Vide the impugned order, the Commissioner of Central Excise (Appeals) has upheld demand of Rs. 1,67,755 together with interest and penalty of Rs. 10,000, for failure on the part of the assessees to reverse CENVAT credit in respect of input services used both in the manufacture of exempted final products as well as dutiable final products and for providing both taxable and exempted services.
2. I have heard both sides. The lower appellate authority has extended credit of Rs. 3,23,168 on ‘Management Consultancy Services’, ‘Security Agency Service’, ‘Scientific or Technical Consultancy Service and Management’ and ‘Maintenance or Repair Services’ which are specified as eligible for credit in rule 6(5) of the CENVAT Credit Rules, 2004. He has, however, upheld the disallowing of credit of ‘Business Auxiliary Service’, ‘Courier Service’, ‘Insurance Service’, ‘Port Service’, ‘Transport of Goods by Road Service’ and ‘Telephone Service’ on the ground that they are not covered in rule 6(5) of the CENVAT Credit Rules. The assessees contend that these services were utilised only in connection with the manufacture of dutiable final products/for providing taxable services and were not common for both dutiable as well as exempted products and taxable and exempted services and, therefore, they are entitled to credit of the amount in dispute. The above submission goes to the root of the matter and is therefore to be considered afresh, for which purpose, I set aside the impugned order and remit the case to the adjudicating authority for fresh decision after extending a reasonable opportunity to the assessees of being heard in their defence.
3. The appeal is thus allowed by the way of remand.
