2017 (3) TMI 1433 - AT - Central Excise

CENVAT credit - stock transfer - Held that - the appellants has different units in different parts of the country where different products are manufactured - In the instant case, dutiable goods were manufactured in Ahmedabad or Mumbai, where Cenvat credit on the input service was already availed. When these goods have come to Jaipur, they were called under the heading of the trading goods . But fact remains that Cenvat credit pertaining to service has already been availed on the goods at Ahmedabad or Mumbai. When it is so, then again Cenvat credit cannot be provided at Jaipur. In other words, it would amount to double benefit. Thus, the Cenvat credit again cannot be allowed to the appellant - appeal dismissed - decided against appellant.

Summary

Issues:
- Claim for Cenvat credit on input services related to stock transfers between manufacturing units.

Analysis:
The case involved two appeals against Order-in-Original No. 20-21/2011 and No. 63-2011. The appellants, manufacturers of aerated beverages, sourced finished goods from their other units on a stock transfer basis to meet market demand. The appellants claimed credit on input services for storage, distribution, and other services related to the transferred goods. The department denied input service credit on services attributable to the traded goods, leading to the filing of the appeals.

The appellant's counsel argued that the Commissioner did not apply Rule 3 but acknowledged that Rule 6 was not applicable. They contended that since necessary Cenvat credit was already availed in the units where goods were originally manufactured, credit on transferred goods in Jaipur should also be allowed. The counsel cited relevant case laws to support their argument and requested setting aside the impugned order.

On the other hand, the department's representative supported the impugned order, highlighting the invocation of Rule 3 in the Show Cause Notice. They emphasized that the demand was made under Rule 14 of Cenvat Credit Rules and Section 11A of the Central Excise Act. The department argued against allowing credit on input services for final products not manufactured in the appellant's factory but in another unit.

After hearing both sides and reviewing the case details, the Tribunal noted that the appellant had already availed Cenvat credit on input services in the units where goods were originally manufactured. Therefore, providing credit again in Jaipur would result in double benefit, which is not permissible. The Tribunal held that since duty was already paid on the goods in the original units where credit was availed, no additional credit could be granted in Jaipur. The Tribunal found no legal basis or precedents cited by the appellant's counsel to support claiming Cenvat credit on services twice.

Consequently, the Tribunal upheld the impugned order and dismissed both appeals filed by the appellants.