2018 (5) TMI 2060 - AT - Central Excise

Utilization of from the common pool account towards discharging their service tax liability - HELD THAT - The appellants are engaged in the manufacture of excisable goods and also providing various services for which they are also registered with the Service Tax Department. The appellant has availed cenvat credit on inputs, capital goods and also input services and maintained a common account/Register, while discharging excise duty on the clearance of finished goods also service tax on output service, they utilized the cenvat credit from the input common pool account. When the amount was utilized from the common pool account, then cenvat credit is eligible. Appeal allowed.

Summary

Issues:
Appeal against Order-in-Original regarding utilization of cenvat credit for service tax liability.

Analysis:
The appeal was filed against the Order-in-Original passed by the Commissioner of Central Excise, Customs & Service Tax. The appellant had availed cenvat credit on inputs, capital goods, and services during a specific period. The demand was confirmed for utilizing the cenvat credit from the common pool account towards their service tax liability, which was not allowed by the Department. The appellant contended that they maintained a common Cenvat Register and utilized the credit for discharging excise duty and service tax liabilities. The appellant relied on specific Tribunal decisions to support their case.

The Revenue justified the impugned order, leading to a hearing where both sides presented their arguments. The Tribunal noted a similar issue addressed by the Hon'ble High Court of Bombay, which clarified the admissibility of credit during the manufacturing process and cross-utilization of credits. The High Court observed that there were no restrictions on cross-utilization of credit on goods and services, as long as certain conditions were met. The Tribunal found that the appellant, engaged in manufacturing excisable goods and providing services, had utilized cenvat credit from the common pool account for discharging excise duty and service tax liabilities, which was deemed eligible based on the cited decision.

Considering the facts and circumstances, the Tribunal set aside the impugned order and allowed the appeal, concluding that the appellant's utilization of cenvat credit was in accordance with the relevant rules and decisions. The appeal filed by the appellant was thus allowed, indicating a favorable outcome for the appellant regarding the utilization of cenvat credit for service tax liability.