2022 (5) TMI 1241 - AT - Central Excise

CENVAT Credit - input services - credit denied on the ground that input services were not received at the factory of Appellant but at External Warehouse having separate First Stage Dealer registration certificate - period from October, 2013 to October, 2014 - HELD THAT - Basing on the decision in VAKO SEALS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI-V 2015 (7) TMI 544 - CESTAT MUMBAI had allowed the appeal filed by the present appellant before him for the period from November, 2014 to November, 2016, where it was held that It is kept in mind that service is not tangible unlike inputs or capital goods. Scope of service is not limited within the four corner of factory, even if same services are received by the appellant at any place directly or indirectly related to manufacture of activity or related to business activity of the assessee irrespective whether it is provided within the factory or out side the factory, credit is admissible. Therefore in my considered view so long as rental premises in the present case is used for manufacturing activity of factory unit, credit is admissible. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of CENVAT credit on input services not received at the factory but at External Warehouse with separate registration certificate.

Analysis:
The Appellant, a manufacturer of Turbo Charger Engines, faced denial of CENVAT credit by the Commissioner of Central Excise & Service Tax, Pune-I on input services not received at the factory but at an External Warehouse with a separate registration certificate. The Appellant's amalgamation with the Warehouse was sanctioned by the Bombay High Court, and all service providers invoiced the Appellant post-integration. The Audit report did not suggest non-reversal of CENVAT credit, but a show-cause notice was issued alleging non-receipt of input services at the factory. The Appellant argued that the denial was erroneous, citing Tribunal decisions and the reversal of credit proportionate to trading activity. Notably, the Department accepted findings of previous Orders-in-Appeal, acknowledging the eligibility of CENVAT credit for input services. The Appellant referenced various judicial decisions and sought to set aside the Commissioner's order.

The Authorized Representative for the Respondent-Department supported the Commissioner's order, emphasizing the rationale behind the decisions on the admissibility of CENVAT credits for subsequent periods. The Tribunal reviewed the case record, documents, and precedent set by previous decisions. Following the judicial precedent and in alignment with the findings in the Order-in-Appeal for the subsequent period, the Tribunal allowed the appeal and set aside the Commissioner's Order-in-Original dated 07.12.2015. This decision was pronounced in open court, ultimately favoring the Appellant in the dispute over the denial of CENVAT credit on input services received at an External Warehouse.