Order date – 23 November 2022

 Facts –

• The Respondent, M/s Chemex Oil Pvt. Ltd., Barotiwala, at the time of receipt of capital goods as well as at the time of their installation in the factory, had informed its intention to use them in the manufacture of exempted goods.
• The Revenue submitted that Cenvat credit was allowed by Hon’ble Tribunal on the capital goods installed by the Respondent for manufacturing of exempted goods holding that the Show Cause Notice dated 13.07.2010, issued for recovery of wrongly taken “CENVAT Credit”, was not within the period of limitation.
• The Revenue also alleged that Learned Commissioner has erred in holding that the respondent/assessee would fall under the category of “Business Auxiliary Service/Business Support Service” rather than “Renting of Immovable Property”.

Issue –

• Whether the Adjudicating Authority is righty allowed the Cenvat credit and rightly classified the service of respondent?

Order –

• The Hon’ble High Court observed that the Show cause notice could have been issued within one year from the last date of filing of ST-3 Returns, whereas, the show cause notice had been issued beyond the period of limitation on 13.07.2010. Hence, the Adjudicating Authority rightly came to the conclusion that the Show Cause Notice dated 13.07.2010 was barred by limitation.
• The Hon’ble High Court relied the case of S.T. Cottex Exports Private Limited’s case, wherein it was held that an assessee could not claim the benefit of “Cenvat Credit” under Rule 6(4), in case, the capital goods had been used in manufacture of exempted goods. Since in the present case, the capital goods in question had never been used for any manufacturing activity, the learned Tribunal rightly held that the respondent/ assessee was entitled to avail “CENVAT Credit” on the goods in question.
• It also finds that the Adjudicating Authority gave a finding of fact that the service provided by the respondent/assessee to Hindustan Liver Limited was a composite service and would not fall within the definition of “Renting of Immovable Property”. The services provided by the respondent/assesse under the “Wet Lease Agreement” were in the category of “Business Support Services”, which was a taxable service with effect from 01.05.2006.
• The manufacturing aspect in relation to the plant and machinery had been taken over by Hindustan Liver Limited and the respondent/assessee had become a service provider and its activity relating to manufacture had ceased.
• Hence, in view of the facts and circumstances of the case, held that no substantial question of law arises in this case, warranting interference. Accordingly, the appeal is dismissed