2018 (8) TMI 1328 - AT - Central Excise

CENVAT Credit - common inputs services used for manufacture of both the excisable goods and trading of goods - Rule 6 of the CENVAT Credit Rules, 2004 - Held that - On a question from the Bench whether, the decision relied upon by the Learned Commissioner (Appeals) have been stayed or over ruled by any higher judicial forum, Learned DR for Revenue has answered the question negatively - the respondent should not be liable to pay the amount as provided under Rule 6 ibid - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Appeal against order of Commissioner of Customs, Central GST & Service Tax regarding availing of CENVAT credit for common inputs services used in manufacturing and trading activities.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI involved a dispute regarding the availing of CENVAT credit by the respondent for common inputs services used in both manufacturing of excisable goods and trading activities. The Department objected to the credit availed by the respondent, citing non-compliance with Rule 6 of the CENVAT Credit Rules, 2004. The Department contended that the respondent should have maintained separate records for input services used in manufacturing dutiable goods and trading exempted goods. The Department confirmed the CENVAT demand on the respondent due to non-compliance with Rule 6. However, the learned Commissioner (Appeals) set aside the adjudication order, ruling in favor of the respondent. The Commissioner held that the respondent did not avail the input services for trading activities and that the mere non-observance of Rule 6 procedures does not disentitle the assessee from availing CENVAT credit.

During the hearing, the Bench inquired whether the decisions relied upon by the Commissioner (Appeals) had been stayed or overruled by a higher judicial forum. The Revenue's representative responded negatively, indicating that the decisions remained valid. Consequently, the Tribunal upheld the Commissioner's decision based on judicial precedence, stating that the respondent should not be liable to pay the amount as per Rule 6. The Tribunal found no infirmity in the impugned order and dismissed the appeal filed by Revenue. The cross objection filed by the respondent was also disposed of in the same order.

In conclusion, the Tribunal's judgment affirmed the Commissioner (Appeals)'s decision, emphasizing that the respondent was not obligated to pay the amount under Rule 6 of the CENVAT Credit Rules, 2004. The Tribunal's decision was based on the legal principles established by previous judicial decisions and the absence of any contrary rulings from higher judicial forums.