(i)

I hereby disallow the Cenvat Credit of Rs. 26,19,63,369/-

(25,43,33,368/- Service Tax + Rs. 50,86,667/- Education

Cess+ Rs. 25,43,334/- Higher Education Cess ) ( Total

Rupees Twenty Six crore nineteen lakh sixty three

thousand three hundred sixty nine only) wrongly availed

during the period from January 2015 to March 2015 and

order recovery of disallowed Cenvat Credit of Rs.

26,19,63,369 under the provisions of Rule 14 of the

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Cenvat Credit Rules 2004 read with Section 73(2) of the

Finance Act, 1994 from M/s JSW Jaigarh Port Limited, 24,

Kunbiwadi, At – Nandiwade, Jaigad, Ratnagiri;

(ii)

I order M/s JSW Jaigarh Port Limited to pay interest at

appropriate rate on aforesaid disallowed Cenvat Credit

amount mentioned at St. No. (i) above under the

provisions of Section 75 of the Finance Act, 1994 read

with Rule 14 of Cenvat Credit Rules, 2004.

(iii)

I impose penalty of Rs. 26,19.63,369/- (Rupees Twenty

Six crore nineteen lakh sixty three thousand three

hundred sixty nine only) on M/s JSW Jaigarh Port Limited,

24, Kunbiwadi, At- Nandiwade, Jaigad, Ratnagiri under

the provisions of Section 78 of the Finance Act, 1994 read

with Rule 15(3) of the Cenvat Credit Rules, 2004. 1

further give option to JSW Jaigarh Port Limited, to pay

the amount of wrongly availed Cenvat Credit along with

interest plus 25% penalty within the period of thirty days

from the receipt of this order, then penalty liable to be

paid them shall be twenty five percent.

27. With this, the show cause notice issued under F. No.

V(JSW)15-68/A-II/ Pune/Tech/2017 dated 14.02.2017 stands

disposed off.

28. This order is passed without prejudice to any other action

that may be initiated against M/s JSW Jaigarh Port Limited under

the Finance Act, 1994 or Rules made there under or any other

law for the time being in force within the Republic of India.

29. This order passed is protected vide Section 174 of the

Central Goods and Services Act, 2017.”

2.1

The Appellant is engaged in the business of rendering port

services from the Jaigarh port at Dhamankhol Bay, Maharashtra.

For this purpose, the Appellant had entered into a concession

agreement dated 24.06.2008 in terms of which, the Appellant

was granted a license by the Maharashtra Maritime Board

("MMB") for designing, financing, constructing, operating,

maintaining and managing the port complex during the license

period of 50 years. The Appellant (i.e. licensee) was entitled to

render port services and recover charges from importers,

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exporters and shipping lines. In lieu thereof, the Appellant was

liable to discharge license fees to the MMB.

2.2

As per the above concession agreement, the Appellant

constructed the port complex and began commercial operations

on 20.01.2010. The Appellant was duly discharging service tax

on the port services rendered by it from this date onwards.

2.3

During the period 2010-2015, the Jaigarh port was not

capable of handling cape-size vessels (i.e. bigger vessels having

greater size and capacity). The Appellant, with a view to be able

to cater to cape-size vessels as well, initiated the process of

dredging the navigation channel around the port to 18.5 meters.

One of the Appellant's clients, JSW Steel Ltd. to whom they were

rendering port services, entered into a contract with the

Appellant obliging it to complete the dredging activity and

further maintain the depth to 18.5 meters for a period of 15

years from 01.04.2015. JSW Steel Ltd. entered into this contract

to ensure that it could bring in cargo on cape-size vessels as well

and the Appellant also envisaged earning revenue by handling

cape-size vessels at the existing berths at Jaigarh port.

2.4

For the above purpose appellant engaged M/s Boskalis

Smit LLP for providing the dredging services and against the

invoices raised by the service provider they availed the CENVAT

credit of Rs 26,19,63,369/-. Revenue objected to the said credit

and issued a SCN on the count that the dredging service is not

required