2015 (9) TMI 624 - AT - Central Excise

Denial of CENVAT Credit - nexus with manufacturing activity - Held that - For the nexus of the services impugned, I find that the respondent paid service tax on lending of DLF office Chandigarh, maintenance charges Mumbai office, brokerage and commission paid to the agent for obtaining office building at Bombay, insurance, plant and machinery, security charges of Chandigarh office, house keeping charges at Chandigarh, Medical and accident insurance of employees, maintenance / rent charges of Bangalore office, insurance of office at Chandigarh and Mumbai. As these service has been availed by the respondents in the course of their business of manufacturing. In these circumstances, as held by the Hon ble Bombay High Court in the case of Ultratech Cement (2010 (10) TMI 13 - BOMBAY HIGH COURT), I hold that appellant are entitled to take Cenvat credit. - Decided against the revenue. Although they have taken the Cenvat credit in the absence of invoices which were not found during the course of audit, but thereafter no efforts have been made by the appellant to produce original invoice. In these circumstances, I do not find infirmity in the order of imposition of penalty on the respondent. In these circumstances, I do not find any infirmity in the impugned order, same is upheld - Decided against the assessee.

Summary

Issues:
1. Whether the respondents are required to be registered as Input Service Distributor as per Rule 2 (m) of the Cenvat Credit Rules, 2004?
2. Whether the inputs service availed by the respondent have nexus in the business of manufacturing of final product of respondent?

Analysis:

Issue No. 1:
The Tribunal analyzed Rule 7 of the Cenvat Credit Rules, 2004, which states that an assessee must be registered as an input service distributor if they have more than one manufacturing unit. In this case, the respondent only has one manufacturing unit. Citing the decision of Durferrit Asea Pvt. Ltd., the Tribunal determined that the respondent is not required to be registered as an Input Service Distributor under Rule 2(m) of the Cenvat Credit Rules, 2004.

Issue No. 2:
Regarding the nexus of the services availed, the Tribunal examined the various services for which the respondent claimed Cenvat credit, such as maintenance charges, insurance, security charges, and more. The Tribunal found that these services were utilized by the respondent in the course of their manufacturing business. Relying on the decision of the Hon'ble Bombay High Court in the case of Ultratech Cement, the Tribunal concluded that the respondent is entitled to take Cenvat credit for these services.

Furthermore, the Tribunal addressed the issue of penalty imposed on the respondent for availing Cenvat credit without invoices. While acknowledging that the invoices were not found during the audit, the Tribunal noted that the respondent failed to produce the original invoices subsequently. Consequently, the Tribunal upheld the penalty imposed on the respondent.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue and disposed of the cross objection accordingly, upholding the impugned order in favor of the respondent.