COMMISSIONER OF CENTRAL EXCISE Vs. HINDUSTAN ZINC LTD.

JUDGEMENT

(1.) THIS is an appeal filed by Revenue against Order -in -Appeal No. 230(KKG)CE/JPR -I/2010, dated 2 -6 -2010 passed by the Commissioner of Central Excise (Appeals), Jaipur -II. The brief facts of the case are that M/s. Hindustan Zinc Ltd. (respondents) are manufacturer of lead, zinc and other metal concentrates falling under Chapter 26 of the Central Excise Tariff. They have availed credit of Service Tax paid on freight for procurement of cement under Goods Transport Agency service. It was the view of the department that cement is not eligible input and therefore freight charges paid for inward transportation of cement cannot be treated as input service utilised for manufacture of final product and as such, credit availed by the respondent is not admissible. Accordingly, show cause notice was issued to the respondent proposing recovery of credit amounting to Rs. 2,68,576/ - and also proposing penalties on the respondent. Show cause notice was adjudicated by Deputy Commissioner vide order dated 16 -10 -2008 and Deputy Commissioner had demanded the Cenvat credit along with interest and also imposed equal amount of penalty on the respondent. The respondent filed appeal before the Commissioner of Central Excise (Appeals) who vide impugned order has allowed their appeal. Revenue has challenged the impugned order in the present appeal.

(2.) LD . D.R. appearing for Revenue submits that credit has been availed by the respondent in respect of Service Tax paid under GTA services for bringing cement inside their premises. He submits that cement is not an eligible input for the respondent in this case and therefore the Service Tax paid on transportation charges is not admissible to the respondent. He submits that Commissioner (Appeals) has not appreciated the Cenvat Credit Rules in proper prospective and has set aside the Order -in -Original. He submits that Order -in -Appeal is bad -in -law and needs to be set aside.