2017 (3) TMI 1912 - AT - Central Excise

CENVAT Credit - Cenvat Credit availed by the assessee-Appellants head office registered as an ISD and distributed to the assessee-Appellants unit denied on the ground that input services were used at the head office and cannot be distributed to the Bhiwadi Unit - required documents appearing as prove were not submitted - HELD THAT - It appears that the adjudicating authority in his order has observed that noticee have not even adduced any evidence to prove the Cenvat Credit was availed on the input services utilized in manufacture of final product or providing output service. There could have been input services used in providing output services which are not at all taxable, therefore, credit pertaining to such input services is not at all admissible, let alone distributable. During the course of arguments, the learned counsel submits that the necessary documents can be produced before the lower authorities to avail the benefit of the Cenvat Credit. She also assured full cooperation with the adjudicating authority. The matter remanded to the adjudicating authority for de novo adjudication in the light of the above observations but by providing a reasonable opportunity to the assessee-Appellants to present their case with liberty to file additional documents, if any, as per law - appeal allowed by way of remand.

Summary

Issues:
- Denial of Cenvat Credit by lower authorities to the assessee-Appellants' head office registered as an Input Service Distributor (ISD) and distributed to the unit.
- Disallowance of input service credit for discharge of Central Excise Duty.
- Lack of evidence provided by the noticee to prove the Cenvat Credit was availed on input services utilized in the manufacture of final products or providing output services.
- Remand of the matter to the adjudicating authority for de novo adjudication.

Analysis:
The judgment pertains to two appeals filed against the Order-in-Original No. 43 & 44/2012-CE dated 19.07.2012 passed by the Commissioner of Central Excise, Jaipur, covering the period from November 2006 to June 2009 and August 2009 to June 2010. The assessee-Appellants, engaged in manufacturing aluminum extruded products at their Bhiwadi Unit, also had an APP Division with centralized registration in Delhi as an Input Service Distributor (ISD). The head office in Delhi received common input services, transferred the input service credit to the Bhiwadi Unit, and was involved in fixing doors and windows manufactured by the Bhiwadi Unit. The lower authorities denied the Cenvat Credit availed by the head office, stating that input services used at the head office cannot be distributed to the Bhiwadi Unit and cannot be used for discharging Central Excise Duty. The appeals were filed against this denial.

During the proceedings, the adjudicating authority noted the lack of evidence provided by the noticee to prove that the Cenvat Credit was utilized on input services for manufacturing final products or providing output services. The learned counsel for the assessee-Appellants assured cooperation and the production of necessary documents to avail the Cenvat Credit benefit. Consequently, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for de novo adjudication. The assessee-Appellants were granted a reasonable opportunity to present their case and file additional documents, if required by law. As a result, the appeals filed by the assessee-Appellants were allowed by way of remand, providing them with a chance to substantiate their claim for Cenvat Credit in compliance with the observations made during the proceedings.