2019 (10) TMI 1033 - AT - Central Excise

CENVAT Credit - input services being used outside their factory premises i.e. at the place of job workers - whether the Appellant are eligible to avail Cenvat Credit of Service Tax paid on input services namely on the supply of tangible services used in the premises of job workers in relation to conversion of raw material sent by the Appellant following Rule 4(5) (a) of Cenvat Credit Rule 2004? HELD THAT - The issue is no more res-integra as decided in the case of M/S. TATA MOTORS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE JAMSHEDPUR 2016 (9) TMI 1240 - CESTAT KOLKATA where it was held that the appellants are the receiver of the services rendered by the 3rd party job worker and the said services have been used directly or in directly in or in relation to the manufacture of motor vehicles chassis. Hence the appellants are entitled to credit of service tax paid on the input services. There is no merit in the impugned order to the extent of confirming recovery of credit and penalty on input services used in the job workers premises . Consequently the same is set aside - amount of Cenvat Credit of 9491/- pertaining to outdoor catering services being not disputed is accordingly upheld - appeal allowed in part.

Summary

Issues:
1. Admissibility of Cenvat Credit on input services used at job workers' premises.
2. Denial of credit for outdoor catering services.

Analysis:

Issue 1: Admissibility of Cenvat Credit on input services used at job workers' premises:
The appeal was filed against an Order-in-Original passed by the Commissioner of Central Excise, Mumbai II, regarding the admissibility of Cenvat Credit on Service Tax paid on input services used at job workers' premises. The Appellant, engaged in manufacturing Heavy Engineering Equipments, availed Cenvat Credit on services rendered at job workers' premises. The Revenue alleged inadmissibility of the credit as the services were used outside the factory premises. The Appellant argued that the issue was settled and cited previous Tribunal judgments, including Larsen & Toubro Ltd cases and others like Tata Motors Limited and MRK Ltd. The Appellant accepted the denial of credit for outdoor catering services and reversed the amount. The Tribunal considered the submissions and previous judgments, concluding that the Appellant was eligible to avail Cenvat Credit on input services used at job workers' premises. The Tribunal set aside the recovery of credit and penalty on such services, upholding only the recovery related to outdoor catering services without imposing a penalty.

Issue 2: Denial of credit for outdoor catering services:
The Appellant did not contest the denial of credit for outdoor catering services and accepted the reversal of the amount. The Tribunal acknowledged this acceptance and upheld the recovery of the credit amount related to outdoor catering services. However, the Tribunal clarified that no penalty would be imposed for taking the said credit. The appeal was partly allowed, with the Tribunal ruling in favor of the Appellant regarding the admissibility of Cenvat Credit on input services used at job workers' premises while upholding the recovery of credit for outdoor catering services without imposing a penalty.