2010 (12) TMI 1145 - AT - Central Excise

Summary

Issues involved: Denial of input service credit u/s Certification of Pollution Level service.

Summary:

Issue 1: Denial of input service credit u/s Certification of Pollution Level service

The appellant appealed against the denial of input service credit by lower authorities on the grounds that the service availed by them, Certification of Pollution Level, was deemed non-taxable during the period in question. The appellant, a cement manufacturer, contended that they were entitled to the credit under Rule 3 of Cenvat Credit Rules, 2004, as they had paid service tax for the service and received invoices from the service provider. The appellant's advocate cited precedents such as CCE Chennai vs. Caborandum Universal Ltd. and Koch-Glitsch India Ltd. vs. CCE & Cus., Vadodara-I to support their claim that if the eligibility of credit is not questioned by the service provider, the appellant should not be denied the input service credit.

Issue 2: Adjudication and arguments

The appellant's advocate argued that the appellant had paid service tax on the services received and was entitled to take input service credit as per the rules. On the other hand, the Departmental Representative contended that since the service in question was not taxable, the denial of credit was justified under Rule 3 of CENVAT Credit Rules, 2004.

Judgment

After considering the arguments from both sides, the Tribunal found that the appellant had indeed paid service tax on the services and was entitled to take input service credit, regardless of the taxability of the service at the end of the service provider. Citing the precedent of Caborandum Universal Ltd., the Tribunal set aside the impugned order and allowed the appeal with consequential relief.