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2019 (8) TMI 74 - AT - Central ExciseCENVAT Credit - duty paying documents - rejection on the ground that the invoices are in the name of head office whereas the CENVAT credit pertains to their Unit at Ramdurg - HELD THAT - It is found from the invoices that it is mentioned in the invoices name of the appellant and the reference of the Unit pertaining to which the said credit on input service pertains. Though, the address of the head office is mentioned in the invoice but the reference of the Unit to which it pertains is also mentioned. Tribunal in the case of Kemwell Biopharma Pvt. Ltd. 2016 (6) TMI 229 - CESTAT BANGALORE in an identical issue has held that CENVAT credit cannot be denied with regard to Service Tax paid on the invoice issued to the head office rather than the factory which has actually utilized the services so long as the input services are received and utilized by the appellant, this at best can only be termed as procedural violation which is not fatal to the right of the appellant - Thus, CENVAT credit cannot be denied on the ground that the invoices issued in the name of the head office. CENVAT credit - denial on account of nexus of raw material with finished goods - HELD THAT - The credit has been availed on the material used for cladding of equipment/pipes which fall under the category of repair and maintenance of manufacturing equipment and is integrally connected with the manufacturing process - credit allowed. CENVAT credit on remaining items - HELD THAT - The appellant did not contest that in the present appeal but he has confined his CENVAT credit only for an amount of ₹ 4,15,642/- and ₹ 1,15,259/- and with regard to the other credit, he has already reversed and he had also proved on record that he has not utilized the same but he has only availed and therefore he is not liable to pay the interest and the penalty. Appeal allowed in part.
Issues:
Appeal against rejection of CENVAT credit on ineligible items and verification of credit eligibility. Analysis: The appeal challenged the rejection of CENVAT credit by the Commissioner (Appeals) and remand for verification. The appellant, engaged in sugar and molasses manufacturing, availed credit on services for co-generation plant and items like jointing sheets, aluminium sheets, SS plates, and HDPE traptent. A Show Cause Notice (SCN) demanded credit repayment of ?6,43,298 with interest and penalty. The original authority confirmed the demand, leading to the appeal. The appellant argued that credit denial for invoices in the head office's name was unjust, citing precedents like CCE Vs Oerlikon Balzers Coating India Pvt. Ltd. The appellant also defended credit for materials used in cladding equipment/pipes, citing case laws like CCE Vs India Glycols Ltd. The appellant contended that the extended limitation period is inapplicable if credit is declared or based on records, supported by cases like CCE Vs Sanmar Speciality Chemicals Ltd. and others. Additionally, the appellant argued against interest payment when credit remains unused, referencing Rule 14 of the CENVAT Credit Rules, 2004. The AR defended the impugned order, but the Tribunal found in favor of the appellant. The Tribunal noted that denial of credit due to invoices in the head office's name was incorrect as long as services were received and utilized by the appellant, citing Kemwell Biopharma Pvt. Ltd. case. Regarding materials for cladding equipment/pipes, considered part of manufacturing equipment maintenance, the Tribunal found credit eligible based on case laws cited by the appellant. The Tribunal also noted that the appellant had reversed unused credit, making them not liable for interest or penalty. Consequently, the Tribunal set aside the order rejecting the CENVAT credit of ?4,15,642 and ?1,15,259, allowing the appeal. In conclusion, the Tribunal ruled in favor of the appellant, overturning the rejection of CENVAT credit on certain items. The decision highlighted the importance of proper utilization of services and materials in determining credit eligibility, referencing relevant case laws to support the judgment.
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