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2017 (10) TMI 972 - AT - Service TaxCENVAT credit - operational charges of the windmill projects situated at Chitradurga - case of Revenue is that the credit availed by the respondent was regular on the ground that it is not pre-condition that input services must be received in the manufacturing premises for availment of CENVAT credit - Held that - the issue is squarely covered by the decision in the case of Parry Engg. & Electronics P. Ltd. Versus C.C.E. & S.T., Ahmedabad-I, II, III 2016 (1) TMI 546 - CESTAT AHMEDABAD , where it was held that Cenvat credit is eligible on maintenance or repair services of Windmills, located away from the factory - credit allowed - appeal dismissed - decided against Revenue.
Issues:
1. Denial of CENVAT credit on operational charges of windmill projects. 2. Interpretation of Rule 14 of the CENVAT Credit Rules, 2004. 3. Applicability of input services being received in manufacturing premises for CENVAT credit. 4. Appeal against the Order-in-Appeal passed by the Commissioner. Analysis: 1. The appeals were filed by the Revenue against the Order-in-Appeal passed by the Commissioner regarding the denial of CENVAT credit on operational charges of windmill projects. The respondent, a manufacturer of various aluminium products, had availed CENVAT credit on these charges paid for windmills located away from the manufacturing premises. The Revenue contended that the power generated was not directly supplied to the manufacturing premises, making the credit irregular and liable for recovery under Rule 14 of the CENVAT Credit Rules, 2004. The demands were confirmed by the Additional Commissioner, but the Commissioner allowed the respondent's appeal, stating that it is not necessary for input services to be received in the manufacturing premises for availing CENVAT credit. 2. The key issue revolved around the interpretation of Rule 14 of the CENVAT Credit Rules, 2004, concerning the recovery of irregularly availed credit. The Revenue argued that the operational charges of the windmill projects did not fulfill the requirement of usage of input services in or in relation to the manufacture of excisable goods. However, the Commissioner's decision favored the respondent, emphasizing that the location of receipt of input services was not a pre-condition for availing CENVAT credit. 3. The appeal before the Tribunal challenged the Commissioner's decision, highlighting that the power generated from the windmills was not supplied directly to the manufacturing premises but to a third party. The Revenue contended that this crucial point was not considered in the Order-in-Appeal, asserting that the input services should be used in or in relation to the manufacture of excisable goods, which was allegedly absent in this case. 4. After hearing both parties and examining the records, the Tribunal found that the issue was no longer res integra and was covered in favor of the respondent by previous decisions such as Parry Engg. & Electronics P. Ltd. vs. CCE, Endurance Technologies P. Ltd. vs. CCE, and Aluminium Powder Co. Ltd. vs. CCE. As the issue was squarely covered in favor of the respondent, the Tribunal dismissed the appeals of the Revenue and upheld the Order-in-Appeal passed by the Commissioner.
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