2009 (3) TMI 774 - AT - Central Excise

Summary

Issues:
1. Denial of Cenvat credit on services received by the appellant on Cement and Clinker unit.
2. Disallowance of credit on the ground of excess duty paid by the service tax provider.

Analysis:
1. The Appellate Tribunal addressed the issue of denial of Cenvat credit to the appellant amounting to Rs. 16,65,172 on services received for the Cement and Clinker unit. The Additional Commissioner had denied the credit, stating that the services were common between two units, and thus, credit should be availed by the respective units. However, the Commissioner (Appeals) set aside this order and remanded the matter for quantification. It was determined that credit should be allowed for services towards the final product Clinker, proportionately allowed for mixed services, and disallowed where there was no relationship with input services. The Tribunal noted that no quantification was done in the de-novo proceedings by the Additional Commissioner, making the amount not the subject matter of the stay application under Section 35F.

2. In addition to the above issue, the Tribunal examined the disallowance of credit amounting to Rs. 5,66,671 based on the grounds that the service tax provider had paid excess duty. It was acknowledged that the appellants had availed credit on the service tax paid by the provider, whose assessment had not been reopened or altered. The Tribunal emphasized the principle that assessments made at the service provider's end cannot be revisited at the service receiver's end. Given that the appellants had lawfully taken the credit for the tax paid by the provider, the Tribunal concluded that the credit availed by the appellants was in compliance with the law. Consequently, the Tribunal dispensed with the pre-deposit condition and granted the stay petition in favor of the appellants.

This comprehensive analysis of the judgment by the Appellate Tribunal CESTAT, Ahmedabad highlights the key issues of denial of Cenvat credit on services and disallowance of credit due to excess duty paid by the service tax provider. The Tribunal's detailed examination and application of legal principles resulted in a favorable decision for the appellants regarding the credit availed, providing clarity on the proper utilization of Cenvat credit in such scenarios.