2018 (10) TMI 1546 - AT - Central Excise

CENVAT Credit - input services - services used in their windmill situated at a site near Belgaum, which is at a distant place outside the factory - Held that - This issue is settled in favour of the assessee by various decisions of the Tribunal - reliance placed in the case of CCE vs. V. S. Lignite Power Ltd. 2018 (4) TMI 1082 - CESTAT NEW DELHI , where it was held that the assessee-Respondents will be entitled to the credit of Service Tad paid on such mining and transportation upto the point of weigh bridge - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellant is eligible to avail CENVAT credit of service tax paid on input services used in the manufacture of electricity generation plant situated far off from the manufacturing unit building, and whether the extended period is invokable.

Analysis:
The appeal was against the order passed by the Commissioner (A) rejecting the appellant's appeal regarding the availment of ineligible CENVAT credit. The appellants are engaged in the manufacture of sponge iron and availing CENVAT credit under CENVAT Credit Rules, 2004. The issue arose when it was observed during a departmental audit that the appellants availed ineligible CENVAT credit of input services used in their windmill situated at a distant place outside the factory. A show-cause notice was issued demanding the ineligible CENVAT credit, which was confirmed by the Assistant Commissioner in the Order-in-Original. The appellant then filed an appeal before the Commissioner (A), who also rejected the appeal, leading to the present appeal before the Tribunal.

During the hearing, the appellant's counsel argued that the issue of availing credit on input services used for a captive power plant situated outside the factory has been settled in favor of the assessee by various decisions of the Tribunal. The counsel cited specific cases where similar issues were decided in favor of the appellant. On the other hand, the Assistant Commissioner defended the impugned order.

After considering the submissions of both parties and reviewing the decisions cited by the appellant, the Tribunal held that the issue is settled in favor of the assessee based on the previous decisions of the Tribunal. The Tribunal found that the impugned order was not sustainable in law and set it aside, allowing the appeal of the appellant. The operative portion of the order was pronounced in open court on 24/10/2018.

In conclusion, the Tribunal allowed the appeal of the appellant, holding that they were eligible to avail the CENVAT credit of service tax paid on input services used in the manufacture of the electricity generation plant situated far off from the manufacturing unit building. The Tribunal also found that the extended period was not invokable in this case, based on settled decisions in favor of the assessee by various Tribunal judgments.