2019 (11) TMI 54 - AT - Central Excise

Availment of CENVAT Credit - paints cleared by them to themselves only for the purpose of carrying out the services at the site of HPCL - HELD THAT - Admittedly, paint is one of the requisite input on which the appellant is entitled to avail the credit . If the appellant would have purchased the paint from any other source, they were entitled to avail the credit of the duty paid on the said input. Merely because the appellant themselves are the paint manufacturers and raised invoices in their own name but for HPCL site, they cannot be denied the Cenvat credit of duty paid by them. Admittedly, the appellant was acting in dual capacity i.e. as manufacturer and also service provider. As a manufacture he had cleared the goods on payment of duty and as a service provider, he has availed the credit, which is available for further utilisation for payment of service tax or for payment of duty of excise. No merits are found in the Revenue s contention raised otherwise. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Availment of credit for paints cleared by the manufacturer for providing maintenance and repair services.

Analysis:
The appellant, engaged in manufacturing paints and providing maintenance services, cleared paints for a contract with HPCL. They paid excise duty on the paints and availed credit for the duty paid. The dispute arose regarding the credit availed by the appellant for paints cleared to themselves for providing services at HPCL. The appellant argued that being paint manufacturers, they were entitled to credit even if they cleared paints to themselves. The Revenue objected, claiming that the credit was not exclusively used for service tax payment but also for excise duty on cleared paints. The appellant contended that once entitled to credit, no one-to-one correlation was required, citing various Tribunal decisions to support their position.

The Tribunal found that the appellant acted in dual capacity as a manufacturer and service provider. They cleared goods on duty payment as a manufacturer and availed credit for further use in service tax or excise duty payment. The Tribunal rejected the Revenue's contention and allowed the appeal, stating that the appellant's actions were justified. The impugned order was set aside, and the appeal was allowed with consequential relief. The decision was pronounced in open court on 20/09/2019.