2020 (6) TMI 255 - AT - Central Excise

CENVAT Credit - input services - Advertisement service and Storage/Ware housing service which are used for end product i.e. paint - appellant manufactures intermediate chemicals Phthalic Anhydride for their own another unit - HELD THAT - There is no dispute that the appellant is engaged in manufacture of intermediate Chemicals namely Phathalic and the same was used in the manufacture in their own another unit therefore, the common service i.e. advertisement and storage and Ware housing can be attributed to both i.e. paint manufacturing as well as intermediate product i.e. chemical manufacturing therefore, the appellant have rightly taken the proportionate credit in respect of Advertisement service Storage and ware housing service. The appellant have rightly taken the credit - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether the appellant is entitled to Cenvat Credit for Advertisement service and Storage/Warehousing service used for manufacturing intermediate chemicals for their own unit producing paint.

Analysis:
The main issue in this case is whether the appellant can claim Cenvat Credit for services like Advertisement and Storage/Warehousing, which are used in the production of intermediate chemicals for their own unit manufacturing paint. The department argued that since these services are used only for paint production, the appellant is not eligible for the credit. However, the appellant contended that as they manufacture intermediate chemicals used in their own paint production, they are entitled to proportionate credit for common services. The appellant cited previous judgments to support their claim, including a Chennai Tribunal case involving a similar issue.

The Tribunal examined the facts and arguments presented by both parties. It was noted that the appellant manufactures intermediate chemicals that are used in their own paint production, making the common services attributable to both the paint manufacturing and chemical manufacturing units. The Tribunal referenced a Chennai bench judgment in the appellant's own case, which supported the appellant's position. The Tribunal highlighted that the rules governing Cenvat Credit do not impose additional restrictions beyond those explicitly stated, and therefore, the appellant was entitled to the credit in this case.

Based on the settled legal position and the Chennai Tribunal's previous ruling, the Tribunal concluded that the appellant had rightfully claimed the credit for the services in question. As a result, the impugned orders were set aside, and the appeals were allowed. The requirement of predeposit was waived, and the appellant's position was upheld, leading to a favorable outcome for the appellant in this case.