The Customs, Excise & Service Tax Appellate Tribunal, Bangalore, ruled that the mining activity amounts to manufacture.
The tribunal observed that the appellate order relied upon by the Original Authority have been set aside by the Tribunal holding that the mining activity amounts to manufacture and the input services were eligible, the refund claims filed by the appellant for the unutilised CENVAT credit is to be allowed.
Facts
The appellant, M/s. Mineral Enterprises Ltd., are engaged in the extraction of iron ore from the mines falling Chapter 2601 of Central Excise Tariff Act (CETA), 1985.
They had filed six refund claims under Notification issued under Rule 5 of CENVAT Credit Rules, 2004.
The appellant had exported iron ore fines and lumps after undertaking processes like mining, processing, crushing, grinding, screening and washing.
These processes were not considered as a manufacturing activity and hence, inputs utilised in the above goods which were exported were not eligible for refund.
Hence, the refund claims were rejected which was upheld by the Commissioner (Appeals) in the order.
Submissions
Counsel on behalf of the appellant submitted that the appellant is a 100% EOU engaged in the manufacture and export of iron ore lumps and fines classifiable under Chapter 2601 of the CETA, 1985.
It is submitted that the process of extraction of iron ore amounts to manufacture of excisable goods in terms of Section 2(f) of the Central Excise Act, 1944.
The appellant received various input services on which Service Tax was paid and availed CENVAT credit of the same in terms of Rule 2(l) of the CENVAT Credit Rules, 2004. Since there were no Domestic Tariff Area (DTA) clearances and they undertook only exports, the CENVAT credit could not be utilised and hence, sought for the refund of unutilised CENVAT credit.
It was also submitted that for the earlier period October 2006 to December 2007, the Commissioner (A) vide Order-in-Appeal No.138/2008 dated 31.10.2008 rejected their refund claims on the ground that the processes undertaken by them did not amount to manufacture.
The Authorised Representative (AR) reiterating the findings of the Commissioner (Appeals) submitted that the order rightly held that the input service credit is not admissible as they are neither exporting the output services nor finished goods manufactured from dutiable inputs.
Conclusion
The tribunals set aside the orders and allowed the appeals with consequential relief, if any, as per law.
Case Details
Case Name: M/s. Mineral Enterprises Ltd. V/S The Commissioner of Customs
Citation: Service Tax Appeal No. 2728 of 2010
Court: CESTAT Bangalore
Judge: Mrs R Bhagya Devi, Member
Decision Date: 14/08/2024
