2017 (11) TMI 283 - AT - Central Excise

CENVAT credit - credit availed on the strength of CHA invoice - For some bills of CHA in respect of Ahmednagar factory, credit was availed by Kanjur Marg factory wrongly - Held that - If the data of the duty payment at Ahmednagar unit suggests that they were paying excise duty in cash, and were able to exhaust entire cenvat credit then the appellants plea would carry weight. However, if the same cannot be established then the innocence pleaded by the appellants cannot be taken on face value. In these circumstances, insofar as the issue relates to credit taken by the Kanjur Marg unit in respect of service availed in Ahmednagar unit is concerned, the issue of limitation and penalty is set aside and the matter is remanded to the original adjudicating authority to ascertain if the innocence pleaded by the appellants is justified by examining the data of duty paying and the cenvat credit availability at Ahmednagar unit - matter on remand. CENVAT credit - invoices issued in the name of CHA for the service availed by CHA in respect of imports made by them during the CHA - Held that - From the documents presented it is seen that the said documents are not addressed to the appellants. In few documents the name of appellant appears as consignee - The invoice, bills, challan etc. issued by different agency have not been produced before the Tribunal also and In these circumstances, credit of the said service received by the CHA and which are claimed to have been received in relation to appellants consignment cannot be permitted - appeal dismissed. Extended period of limitation - Held that - it is seen that the appellants have taken cenvat credit without the strength of any duty paying document in their name. In these circumstances, the invocation of extended period of limitation and imposition of penalty is fully justified. Appeal allowed in part.

Summary

Issues:
1. Denial of cenvat credit on certain services.
2. Cenvat credit taken on invoices issued in the name of CHA for services availed during imports.

Analysis:
1. The first issue involves the denial of cenvat credit on certain services by the appellants, who argued that a clerical mistake led to the credit being wrongly availed by one factory instead of being transferred to another. The appellants contended that as an Input Service Distributor (ISD), they could have legitimately transferred the credit. The tribunal noted that the credit was not admissible, but remanded the matter to the original authority to determine if the innocence claimed by the appellants was valid by examining the duty payment data at the relevant unit. The tribunal set aside the issue of limitation and penalty, remanding it for further investigation.

2. The second issue pertains to cenvat credit taken on invoices issued in the name of CHA for services related to imports. The appellants argued that the services were connected to their consignments, citing circulars and precedents. However, the tribunal observed that the documents did not explicitly mention the payment of service tax, as required by the Service Tax Rules. As a result, the tribunal dismissed the appeal concerning the service tax credit claimed for services received by CHA in relation to the appellants' consignments. The tribunal upheld the invocation of the extended period of limitation and the penalty imposed in this regard.

In conclusion, the tribunal partly allowed the appeal, remanding one issue for further examination while dismissing the appeal on the second issue due to insufficient documentation and non-compliance with service tax rules.