M/S. CROSSWORD AGRO INDUSTRIES Vs. CCE RAJKOT

JUDGEMENT

(1.) THIS is an appeal filed by the appellant against order in appeal No. 280/2012/COMMR(A)/RBT/RAJ, dt. 23.05.12 under which the order in original dated 9.1.12 with respect to credit taken on the services with respect to certain trading goods was upheld by Commissioner (Appeals). Aggrieved by the impugned order appellant filed this appeal on the ground that as per CBEC circular No. dated 13.12.96 the credit taken on utilised services with respect to traded goods is admissible. Appellant also relied upon the judgment of CESTAT Mumbai in the case of Flat Products Equipments (I) Ltd. -, 2011 (272) ELT 104 (Tri. - Mum.). None appeared on behalf of the appellant during the hearing fixed but they filed the written submission dated 28.3.13 and relied upon TIOL news service that as per CESTAT Mumbai Bench decision reported in 2013 -TIOL -297 CESTAT -MUM the issue is settled in their favour. On the other hand ld. A.R. relied upon the following judgments in support of the fact that services in relation to trading activity are not eligible for taking cenvat credit under Rule 4 of the cenvat Credit Rules.

(2.) THE issue involved in this case is admissibility of cenvat credit on the services related to the inputs which are not used in the manufacture of goods which are exported. The inputs received by the appellants are exported as such without being used in the manufacturing activity. The point for consideration is whether the inputs which do not go in the stream of manufacture will be eligible for cenvat credit or not. Appellant has relied upon the judgment of CESTAT Mumbai in the case of Flat Products Equipments (I) Ltd. (supra). It is observed from this judgment that the bought out items received by the appellant were used in the manufacture of excisable goods the value of which was also included in the total sale price of the goods. Similarly their reliance placed by the appellant on CBEC circular No. 283/117/96 -CX dated 13.12.96 the situation covered those inputs which were also used in the manufacture of the finished goods and at times are also exported under bond for which it was clarified that such inputs can be exported under bond without any reversal of credit. However in the present case of the appellant the bought out items exported by the appellants are never used in the manufacture of the finished excisable goods as per the claim of the department. In this regard ld. A.R. has rightly relied upon the judgment of Ford India Pvt. Ltd. Vs. CCE Chennai - : 2007 (214) ELT 40 (Tri. - Chennai) where the clarification dated 13.12.96 relied upon by the appellant was also considered. After considering all the aspects of the case it was held by Chennai CESTAT bench that credit, with respect services utilised only in the activity of trading of components, no cenvat credit is available on such components. On the same analogy the services used with respect to traded items will not be admissible when the services are utilised only for export of such traded items which are net used in the stream of manufacture. Based on the above view, the appeal filed by the appellant is accordingly dismissed.