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2017 (10) TMI 843 - AT - Central ExciseCENVAT credit - input services for job-worker - Job Work Godown Rent/Electricity Charges - Diesel Purchase for Genset - Diesel Purchase for Job Work purposes - DG Gen Set Hire Charges - denial on the ground that these are input services for the job-workers and not for appellants (principal manufacturer) and on the ground that job-work manufacturers are exempt under N/N. 25/2012-ST, dated 20.06.2012 - Held that - Rule 3(1) of CCR, 2004 specifically allows credit of service tax paid on input services used in the manufacture of intermediate products by a job-worker availing the benefit of exemption under N/N. 214/86-CE, dated 25.03.1986 and received by the manufacturer for use in or in relation to manufacture of final product - Reliance placed in the case of MRF LTD. Versus COMMISSIONER OF C. EX. & ST. (LTU), CHENNAI 2014 (1) TMI 822 - CESTAT CHENNAI , where it was held that principal manufacturer is entitled to avail credit on services used by job worker manufacturing goods on behalf of the principal manufacturer availing exemption under N/N. 214/96-CE, dated 25.03.1986. CENVAT credit - Godown Maintenance - Held that - The denial of credit in respect of these services on the ground that the service is provided outside the godown is not sustainable, as, input services need not necessarily be provided within the factory/godown, as held by the Hon ble Bombay High Court in the case of Deepak Fertilizers & Petrochemicals Corpn- Ltd. Vs. Commissioner of Central Excise, Belapur 2013 (4) TMI 44 - BOMBAY HIGH COURT - credit allowed. CENVAT credit - Photography Service - ISD invoice - Held that - even after 01.04.2011 the Photography Services have to be considered as part and parcel of Advertisement, Brand Promotion and Sales Promotion Services and, therefore, credit of service tax paid thereon is admissible. Appeal allowed - decided in favor of appellant.
Issues involved:
- Denial of Cenvat credit of service tax on various expenses related to job work - Denial of credit on Loading & Unloading Charges - Denial of credit on service tax paid on Godown Maintenance and Photography Service - Interpretation of Rule 3(1) of Cenvat Credit Rules, 2004 - Applicability of Notification No.25/2012-ST - Precedent judgments supporting the entitlement of principal manufacturer to avail credit on services used by job workers - Application of section 5A(1A) of the Central Excise Act, 1944 to service tax provisions Analysis: The judgment by the Appellate Tribunal CESTAT Chennai, delivered by Member Archana Wadhwa, addressed multiple issues related to the denial of Cenvat credit of service tax on various expenses incurred in job work. The appellant's credit was rejected on grounds that the expenses were considered input services for job workers and not the principal manufacturer. Additionally, the denial extended to Loading & Unloading Charges at job-workers' premises, Godown Maintenance outside the factory premises, and Photography Service without a proven nexus to the manufacturing process. The appellant argued that job charges and reimbursable expenses were invoiced together with service tax paid by job workers, justifying the credit claim. The appellant relied on Rule 3(1) of Cenvat Credit Rules, 2004, which allows credit on input services used by job workers for manufacturing intermediate products for the principal manufacturer. The appellant cited precedent judgments, including Commissioner of Central Excise, Delhi-III Vs Interface Microsystems and MRF Ltd Vs Commissioner of Central Excise & Service Tax, supporting the entitlement of principal manufacturers to such credits. Furthermore, the appellant contended that once service tax was paid by job workers, even if not required, the principal manufacturer should not be denied Cenvat credit. The appellant referenced judgments like YG1 Industries (India) P. Ltd. Vs Commissioner of Central Excise, Mumbai-III and Multi Organics Pvt Ltd. Vs Commissioner of Central Excise, Nagpur to support this argument. The appellant also highlighted the absence of a provision similar to section 5A(1A) of the Central Excise Act, 1944, in service tax provisions, emphasizing that such provisions were not applicable to service tax laws. The appellant's case-specific arguments included the admissibility of credit on job-charges and reimbursable expenses, Godown Maintenance, and Photography Service based on previous favorable decisions by the Commissioner. In the judgment, Member Archana Wadhwa noted that all issues had been previously addressed by Tribunal precedent decisions and that the Commissioner had ruled in favor of the appellant regarding Photography Service without any appeal from the revenue department. Consequently, the impugned order was set aside, and all three appeals were allowed with consequential relief granted to the appellants. The decision was pronounced in open court on 01.08.2017.
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