2015 (2) TMI 922 - AT - Central Excise

Denial of Cenvat credit on capital goods and rent a cab service - denial on the premise that the said service does not qualify as input service as per Rule 2(l) of Cenvat Credit Rules, 2004 - Held that - It is not in dispute that capital goods have not been received by the appellants and duty has not been paid by the appellant. Therefore, reliance on the decision of Hon'ble High Court of Punjab and Haryana in the cases of Stelko Strips Ltd.(2010 (3) TMI 68 - PUNJAB & HARYANA HIGH COURT) and Ralson India Ltd. (2005 (12) TMI 37 - HIGH COURT OF PUNJAB & HARYANA (CHANDIGARH)), the appellant is entitled to take Cenvat credit on the strength of original triplicate copy of invoices issued by the supplier. Further, I find that in appellants own case, the Hon'ble High Court of Bombay, any services availed by any manufacturer of excisable goods in the course of their business of manufacturing, appellant is entitled to take Cenvat credit. Therefore, the appellant is entitled to take Cenvat credit on rent-a-cab service as same has been used by them in the course of their business activity of manufacturing of excisable goods. In these circumstances, I hold that appellants are entitled to take Cenvat credit. Therefore, impugned order deserves no merits, hence set aside - Decided in favour of assessee.

Summary

Issues:
1. Denial of Cenvat credit on capital goods due to missing original invoices.
2. Denial of input service credit on rent-a-cab service.
3. Confirmation of demand of duty, interest, and penalty by the adjudication order.

Analysis:
1. The case involved the denial of Cenvat credit on capital goods and rent-a-cab service based on the absence of original invoices. The appellant, a cement manufacturer, faced a show cause notice for the denial of credit. The original copy of the invoices for the capital goods was missing, leading to the denial of Cenvat credit. However, the appellant reversed the credit initially but later obtained triplicate copies of invoices from the supplier. The appellant argued that Rule 9 of the Cenvat Credit Rules, 2004, allowed them to take credit based on supplier-issued invoices. Citing relevant judgments, the appellant contended they were entitled to the credit. The AR argued that as per Rule 11, without original invoices, the appellant couldn't claim the credit. The Tribunal found that the appellant, having received the capital goods and not disputed the duty payment, could claim Cenvat credit based on the triplicate invoices, as supported by legal precedents.

2. Regarding the denial of input service credit on rent-a-cab service, the appellant used the service for employee transportation and official purposes. The AR argued that since the invoices were not in the appellant's name, they were not entitled to the credit. The appellant, relying on a High Court decision, asserted their right to the credit. The Tribunal considered the usage of the rent-a-cab service in the manufacturing business and held that the appellant could claim the Cenvat credit for the service. The Tribunal found that any service availed in the course of manufacturing activities allowed for Cenvat credit. Therefore, the denial of credit on the rent-a-cab service was overturned.

3. The adjudication order confirmed the demand for duty, interest, and penalty, which was upheld by the Commissioner (Appeals). However, the Tribunal, after hearing both parties and considering their submissions, found in favor of the appellant. Given the entitlement to Cenvat credit on capital goods and rent-a-cab service as per relevant rules and legal precedents, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant.