Case Law Details
JSW Steel Ltd Vs Commissioner of Central Excise (CESTAT Mumbai)
Introduction: The case of JSW Steel Ltd vs. Commissioner of Central Excise, decided by the CESTAT Mumbai, addresses an important issue related to the eligibility of CENVAT credit for services used in manufacturing and clearing final products. In this case, JSW Steel Ltd appealed against the disallowance of credit amounting to ₹6,79,48,192/- covering the period from 1st January 2005 to 31st March 2008. The appeal centered around the classification of services provided in connection with the transportation of finished products to customers’ premises. This article provides a detailed analysis of the case and its implications.
Detailed Analysis:
1. Background of the Case: JSW Steel Ltd, engaged in the iron and steel products business, claimed CENVAT credit for tax paid on “goods transport agency services.” These services were used to transport finished products to customers on “free-on-rail” (FOR) terms. Initially, the CENVAT credit was not availed, but it was claimed later due to the decision of the Larger Bench of the Tribunal in ABB Ltd vs. Commissioner of Central Excise & Service Tax, Bangalore. This decision affirmed the eligibility of credit for services related to outward transportation from the “place of removal.”
2. Objection by Central Excise Authorities: The jurisdictional central excise authorities contested the CENVAT credit claim. The Commissioner of Central Excise, Raigad, issued an order directing recovery of ₹6,79,48,192/- under Rule 14 of the CENVAT Credit Rules, 2004, along with applicable interest. A penalty of a similar amount was imposed under Rule 15 of the CENVAT Credit Rules, 2004.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
