DOSHION LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD

JUDGEMENT

(1.) THE facts of the case, in brief, are that the appellants were engaged in manufacturing of water treatment plant, water treatment chemicals as well as providing taxable services under the category of maintenance or repair services; erection, commissioning and installation and were registered with the Central Excise and Service Tax respectively. During the course of audit it was observed that the appellant has availed service tax credit during 1 -9 -2003 to 10 -9 -2004, on input services of travel agent, custom house agent, tour operation, telephone, insurance, courier, testing services etc. and paid the service tax from the Cenvat credit towards the payment of service tax liability for providing output services of repair, operation & maintenance, erection and commissioning. Where as it was noticed that as per provision of Rule 2(c) of CCR, 2002 Input service means any taxable service received and consumed by a service provider in relation to rendering of output services and as per Rule 4(1) ibid the service tax credit availed on input services may be utilised for payment of service tax on the output services. Thus it appeared that the services, for which service tax credit availed and utilised, have not been utilised in relation to rendering the output services.

(2.) ACCORDINGLY a show cause notice was issued to initiate proceedings for recovery of wrongly availed Cenvat credit which has culminated in confirmation of the demand for the same and with interest and penalty under Sections 76 and 78 of Finance Act, 1994.

(3.) HEARD both the sides.