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2019 (12) TMI 1496 - AT - Central ExciseCENVAT Credit - allegation is that input services received for use in or in relation to the final Products, cannot be utilized by the appellant for dis-charging its Service Tax liability - HELD THAT - This Bench of the Tribunal in M/S VEDANTA ALUMINIUM LTD. VERSUS COMMR. OF CENTRAL EXCISE, CUSTOMS S. TAX, BBSR II 2018 (5) TMI 2060 - CESTAT KOLKATA had decided in favour of the appellant-assessee. The Tribunal held that 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 - decided in favor of appellant.
Issues:
1. Disallowance of Cenvat Credit on input services. 2. Upholding of Adjudication Order by Lower Appellate Authority. 3. Utilization of Cenvat Credit for discharging tax liabilities. 4. Interpretation of Cenvat Credit Rules regarding cross-utilization. Analysis: 1. The case involved the disallowance of Cenvat Credit amounting to ?5,52,532/- on input services during the period 2010-11. The Show Cause Notice alleged that the input services lacked a nexus with the output service rendered by the appellant, leading to the disallowance of the credit by the Adjudicating Authority. The demand for Service Tax along with interest and penalty was confirmed. 2. The Lower Appellate Authority upheld the Adjudication Order, resulting in the appellant filing an appeal before the Tribunal challenging the decision. The appellant argued that the Cenvat Credit was utilized for discharging tax liabilities and Central Excise Duty, maintaining that the credit availed on input or capital goods was used for tax liabilities, supported by various decisions of the Tribunal. 3. The Tribunal referred to a previous decision in favor of the appellant-assessee, highlighting the permissibility of cross-utilization of Cenvat Credit. The Tribunal emphasized that the appellant maintained a common account/register for availing Cenvat Credit on inputs, capital goods, and input services. The utilization of the credit from the common pool account for discharging excise duty and service tax on output services was deemed eligible based on the interpretation of the Cenvat Credit Rules. 4. The Tribunal's analysis focused on the provisions of Rule 3(1) of the Cenvat Credit Rules, emphasizing the admissibility of credit on various duties including service tax. The decision highlighted that cross-utilization was not prohibited, and the Tribunal found no substantial question of law in the appeal. Ultimately, the Tribunal set aside the impugned order, allowing the appeal filed by the appellant with consequential benefits if any. In conclusion, the judgment revolved around the disallowance of Cenvat Credit on input services, the interpretation of Cenvat Credit Rules regarding cross-utilization, and the Tribunal's decision in favor of the appellant based on maintaining a common pool account for utilizing the credit.
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