Tata Steel Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
CESTAT Kolkata allowed Tata Steel Ltd.’s appeal against an order confirming CENVAT credit demand of ₹2,50,14,451, along with interest and equivalent penalty, relating to input services used during modernisation of its Joda East Iron Mines.
Tata Steel manufactures iron ore concentrates at its Joda East Iron Mines, which are stock transferred to its Jamshedpur Steel Plant for manufacture of steel. Owing to expansion of the Jamshedpur plant, Tata Steel undertook modernisation at Joda East Iron Mines to increase production of iron ore concentrates. The projects included a Dry Circuit Material Handling Plant, Material Handling System, Rapid Loading Stations, Direct Entry Railway Siding, Iron Ore Slime Dam and Rain Water Harvesting Project.
The appellant received various input services in connection with the modernisation and availed CENVAT credit during the period from 1 April 2011 to 31 March 2014. The credit was reflected in its monthly ER-1 returns.
The Department issued a show cause notice dated 8 April 2016 proposing recovery of CENVAT credit of ₹4,64,18,240 under Rule 14 of the CENVAT Credit Rules, 2004, along with interest and penalty. The Department’s case was that, with effect from 1 April 2011, services relating to “setting up” of a factory had been removed from the definition of “input service” under Rule 2(l).
