2022 (1) TMI 1123 - AT - Central Excise

Recovery of the ineligible credit with the interest and imposed penalties - commissioning and installation services - as a sequel to notices issued for the preceding period time to time, Statements of Demands (SODs) to recover ineligible credit were issued - service eligible to credit or not - HELD THAT - In para-2 of the statement of demand, it is clearly stated that facts and circumstances leading to the statements of demand are identical to the earlier SCNs. This being so, the authorities below ought to have applied the decision of the Tribunal and allowed the credit. Instead, the adjudicating authority has held that the invoice has been issued in the name of the Head office of the appellant company and that services are rendered at Ambattur plant (Chennai). There is no law which restricts or prohibits the invoice being issued in the name of the Head office which has Centralized Registration. The purpose of taking centralized registration is to help the manufacturer for availment of credit as well as distribution of credit. The disallowance of credit raising such an issue which is not alleged in SCN cannot sustain. The disallowance of credit is without any legal or factual basis - Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of cenvat credit on commissioning and installation services deemed ineligible under Rule 2(l) of CCR 2004.
- Confirmation of demand for recovery of ineligible credit, interest, and penalties by adjudicating authority.
- Appeals filed by the appellant before Commissioner (Appeals) against the orders upholding the demand.
- Argument by the appellant citing a previous Tribunal decision in their favor on the same issue.
- Support of findings in the impugned orders by the authorized representative.
- Examination of the issue by the Tribunal in the appellant's previous case.
- Observations and decision of the Tribunal in the appellant's previous case.
- Allegations and findings in the statement of demand and earlier show cause notices.
- Applicability of the previous Tribunal decision to the current case.
- Legal and factual basis for disallowance of credit.

Analysis:
The case involved the appellant, engaged in manufacturing steel furniture, availing cenvat credit on commissioning and installation services, which were deemed ineligible under Rule 2(l) of CCR 2004. The adjudicating authority confirmed the demand for recovery of the ineligible credit, along with interest and penalties, leading to the appellant filing appeals before the Commissioner (Appeals). The appellant argued that a previous Tribunal decision favored them on the same issue, highlighting that the facts and circumstances leading to the statements of demand were identical to earlier show cause notices. The authorized representative supported the findings in the impugned orders, leading to a detailed examination by the Tribunal.

In the appellant's previous case, the Tribunal had observed that the main allegation against the appellant was that the credit was ineligible due to the assembling/installation activity being considered a post-manufacturing activity. However, the Tribunal had ruled in favor of the appellant in the earlier periods, citing that the mere findings recorded in the order without specific allegations were not sufficient to deny the credit. The Tribunal emphasized that the facts and circumstances leading to the statements of demand were identical to the earlier show cause notices, indicating that the authorities should have applied the previous Tribunal decision and allowed the credit.

The Tribunal further noted that the disallowance of credit lacked a legal or factual basis, emphasizing that the invoice being issued in the name of the appellant's Head office, which had centralized registration, did not restrict the credit availability. The Tribunal highlighted that the purpose of centralized registration was to facilitate credit availment and distribution, and disallowing credit based on an issue not alleged in the show cause notice was unsustainable. Consequently, the Tribunal set aside the impugned orders, allowing the appeals with any consequential relief as per law.