2019 (5) TMI 370 - AT - Central Excise

CENVAT Credit - input services - services used in the manufacture of electricity generation plant situated far off from the manufacturing unit building - extended period of limitation - HELD THAT - This issue is settled in favour of the assessee by various decisions of the Tribunal - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, AURANGABAD VERSUS ENDURANCE TECHNOLOGY PVT LTD 2015 (6) TMI 82 - BOMBAY HIGH COURT - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility of the appellant to avail CENVAT credit on input services for electricity generation plant
- Applicability of the extended period for invoking CENVAT credit

Analysis:

Issue 1: Eligibility of the appellant to avail CENVAT credit on input services for electricity generation plant

The appellant, engaged in the manufacture of Sponge Iron, was found to have availed ineligible CENVAT credit on input services during a specific period. The dispute revolved around whether the appellant could claim CENVAT credit for service tax paid on input services used in the manufacture of an electricity generation plant located away from the manufacturing unit building. The appellant argued that this issue had been settled in favor of the assessee by various Tribunal decisions, including CCE vs. V. S. Lignite Power Ltd., CCE vs. Jindal Aluminium Ltd., and others. The counsel contended that the availment of credit for input services used for a captive power plant situated outside the factory had been consistently upheld in previous rulings.

Issue 2: Applicability of the extended period for invoking CENVAT credit

The appellant challenged the impugned order passed by the Commissioner (A), which rejected the appeal and confirmed the demand for CENVAT credit, interest, and penalty. The learned counsel for the appellant argued that the issue of eligibility to avail CENVAT credit on input services for the electricity generation plant had been conclusively settled in favor of the assessee by Tribunal decisions. The appellant's position was supported by citing relevant case laws and a final order in their own case. The learned AR, on the other hand, defended the impugned order.

In delivering the judgment, the Judicial Member noted that the issue at hand had been resolved in favor of the assessee by various Tribunal decisions cited by the appellant. After considering the submissions of both parties and the precedents relied upon, the Judicial Member concluded that the impugned order was not sustainable in law. By following the principles established in the referenced decisions, the Judicial Member set aside the impugned order and allowed the appeal of the appellant. The operative portion of the order was pronounced in open court on 03/05/2019.