2017 (9) TMI 942 - AT - Central Excise

CENVAT credit - input service distributor - Held that - only two limitations are put for the distribution of credit by an input service distributor. Firstly, it cannot exceed the amount of service tax paid and secondly, the credit of service tax attributable to service used shall not be distributed in a unit exclusively engaged in the manufacture of exempted goods or providing of exempted services. There is nothing wrong in the impugned order allowing CENVAT credit to the assessee - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against Order-in-Original upholding CENVAT credit availed by the assessee based on documents from a non-input service distributor.

Analysis:
The case involved an appeal by the Revenue against an Order-in-Original upholding the CENVAT credit availed by the respondents for the period from August 2011 to December 2011. The respondents, engaged in cigarette manufacturing, had availed credit based on documents from a non-input service distributor, M/s. ILTD, Guntur. The Additional Commissioner had dropped the proceedings, stating that the services for which credit was sought were covered under the definition of input service, contrary to the Revenue's contention based on Rule 7(b) of the CENVAT Credit Rules, 2004 and Circular No.97/08/2007-ST. The Department appealed to the Commissioner (A), who, after considering various judgments, rejected the appeal, leading to the present appeal.

The Revenue argued that the impugned order failed to appreciate Rule 7(b) of the CENVAT Credit Rules, 2004 and Circular No.97/08/2007-ST. On the other hand, the respondent's counsel cited previous Tribunal judgments in the assessee's favor, emphasizing that the issue was no longer res integra and had been settled in favor of the assessee. The counsel referred to specific case laws in the assessee's case and highlighted the Tribunal's reliance on a judgment of the Hon'ble Karnataka High Court in a related matter.

The Tribunal, after hearing both parties and considering the submissions and judgments cited, upheld the impugned order allowing CENVAT credit to the assessee. The Tribunal found no infirmity in the order and dismissed the Revenue's appeal. The decision was based on the interpretation of the relevant provisions and the precedent set by previous judgments in the assessee's case, emphasizing the eligibility of the assessee to claim CENVAT credit based on the specific circumstances and legal framework involved.

In conclusion, the Tribunal's decision in this case reaffirmed the assessee's entitlement to CENVAT credit despite the Revenue's appeal challenging the availing of credit based on documents from a non-input service distributor. The judgment highlighted the importance of legal interpretations, precedents, and specific provisions in determining the eligibility of CENVAT credit claims, ultimately leading to the dismissal of the Revenue's appeal.