9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 1047 - AT - Central ExciseEntitlement of Cenvat credit - Security services, Fettling Contract Services and Architectural Services - Services not received in the registered unit - Held that - Cenvat Credit in respect of the input service cannot be denied merely for the reason that the services were received and used outside the registered premises. There is no prohibition for availing the Cenvat Credit in such cases, the Cenvat Credit on input service is admissible so long the services are used in or in relation to the manufacture of final product or for providing output service irrespective of the location where the services were received and used by applying the ratio of Tribunal decision in the case of M/s. Aurobindo Pharma Ltd. Vs. Commissioner of Central Excise, Chennai-III - 2015 (3) TMI 1186 - CESTAT, CHENNAI . Therefore, the appellant is entitled for the Cenvat Credit in respect of Security Services, Fettling Contract Service & Architectural Services used outside the factory of the appellant in their own Hinjewadi & Wai unit. - Decided in favour of appellant
Issues Involved:
1. Whether the appellant is entitled to Cenvat Credit for services received at unregistered units. 2. Whether the demand is time-barred. Issue-wise Detailed Analysis: 1. Entitlement to Cenvat Credit for Services Received at Unregistered Units: The appellant, M/s. Hardik Founders and Engineers (P) Ltd., operates three units located at Hinjewadi, Pirangut, and Wai. The appellant availed Cenvat Credit for services received at the Pirangut and Wai units but took the credit in the Hinjewadi unit. The lower authorities disallowed the credit, arguing that the services were not received at the Hinjewadi unit, which is the only registered unit and the only one paying excise duty or service tax. The appellant contended that the services received at the Hinjewadi unit were used in job work under Rule 4(5)(a) of the Cenvat Credit Rules 2004, and thus, deemed to be used in the manufacture of the final product. For the Wai unit, which is a newly set-up unit, the architectural services were part of the appellant company's business activities. The appellant argued that all expenditures were booked in the company's accounts, and the credit should not be denied merely because the services were received at unregistered units. The appellant relied on several judgments, including M/s. Aurobindo Pharma Ltd. Vs. Commissioner of Central Excise, Chennai-III, and others, to support their claim. The Tribunal found that all three units are part of one entity, M/s. Hardik Founders and Engineers (P) Ltd., and thus, should not be treated differently. The services received at the Hinjewadi unit were part of the manufacturing process, and the services received at the Wai unit were related to the business activity of the appellant company. The Tribunal held that there is no prohibition against availing Cenvat Credit for services used in or in relation to the manufacture of the final product, regardless of the location where the services were received and used. The Tribunal cited the Karnataka High Court judgment in Commissioner of Central Excise, Bangalore-I Vs. ECOF Industries Pvt. Ltd., which supports the transfer of credit by an Input Service Distributor (ISD) from one unit to another within the same company. 2. Time-Barred Demand: The appellant argued that the demand was time-barred as the show cause notice was issued beyond one year. The appellant regularly filed ER.1 monthly returns, showing the Cenvat Credit availed, and thus, there was no suppression of facts. The appellant relied on judgments such as Collector of Central Excise Vs. Chempur Drugs and Liniments and Commissioner of C. Ex. Coimbatore Vs. Precot Mills Limited to support their claim. However, since the appeal was decided on merit, the Tribunal did not address the issue of time-bar. Conclusion: The Tribunal allowed the appeal, setting aside the impugned order. The appellant was entitled to Cenvat Credit for Security Services, Fettling Contract Service, and Architectural Services used at the Hinjewadi and Wai units. The Tribunal emphasized that genuine credit earned by one unit should not be disallowed for set-off against the liability of another unit within the same company, provided there is no prohibition by law. The appeal was pronounced in court on 22/3/2016.
|
