2018 (4) TMI 760 - AT - Central Excise

CENVAT credit - input services - outward freight from factory gate to the port in case of export of goods - insurance policy - man Power Recruitment Service availed for doing job work - Held that - Cenvat credit of GTA service on transportation for export of goods from the factory gate to the port of export is allowable as in the case of export, the port of export is the place of removal - credit allowed. Insurance policy of working staff and services utilized in canteen - Held that - the same are covered in favour of the appellant by the ruling of Hon ble Bombay High Court in the case of Commissioner of Central Excise, Nagpur Versus Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT - credit allowed. Man Power Recruitment Service availed for doing job work - Held that - in case of job work, the goods manufactured by the appellant are normally taxable, but they were not subject to tax because of provisions of Notification No.214/86 as the principal manufacturer had undertaken to pay the duty, there is no case of clearance of exempted goods and accordingly I hold that the provisions of Rule 6 of Cenvat Credit Rules, 2004 are not attracted - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether Cenvat credit on certain input services is allowable or not.

Analysis:
The appellant, engaged in manufacturing and exporting M. V. Parts, availed Cenvat credit on duty paid inputs, capital goods, and input services. A Show Cause Notice was issued based on the Revenue's belief that the appellant was not entitled to Cenvat credit on outward freight for exports, insurance policy of staff, and other services. The appellant reversed the credit along with interest as proposed in the notice, which also suggested imposing penalties. The Additional Commissioner confirmed a lower demand amount, imposed penalties, and dropped a demand related to a goods transport agency service. The appeal to the Commissioner (Appeals) was rejected, leading to an appeal before the Tribunal.

The appellant argued that the Show Cause Notice was time-barred as all disputed transactions were recorded in the regular books of accounts without any misconduct. The appellant contended that disallowing Cenvat credit on certain services was unjustified. The Tribunal considered the arguments and evidence, ruling in favor of the appellant on various issues. Cenvat credit for GTA service for export transportation was allowed as the port of export was deemed the place of removal. The credit for insurance policy and canteen services was permitted based on precedents from the Bombay High Court and Karnataka High Court. The credit for Man Power Recruitment Service for job work was also upheld citing relevant rulings. The Tribunal noted that the goods manufactured were not taxable due to an agreement with the principal manufacturer, hence Rule 6 of Cenvat Credit Rules, 2004 did not apply.

In conclusion, the Tribunal allowed the appeal, set aside the impugned order, and granted the appellant consequential benefits in accordance with the law.