2022 (6) TMI 859 - AT - Central Excise

CENVAT Credit - credit denied on the ground of nexus of input services with the manufacturing of the appellant final product - HELD THAT - The fact is not under dispute that this case is the genesis of the audit objection raised and proceedings were initiated against appellant s own unit and their other units in respect of same inputs services. As regard the other unit, the entire demand raised on the same input services have been dropped by the Learned Adjudicating Authority remaining by Tribunal CESTAT Mumbai. It is also submitted by the Learned Counsel that against the order of the Commissioner (Appeals) in the case of other unit department has accepted order with this status of the case in the present case also being involved same input services all the services are admissible input services and also following on various case laws submitted by the appellant including their own case 2014 (2) TMI 495 - CESTAT MUMBAI in respect of same services issue is no longer res-integra, and it is not only in the appellant s own case in respect of these services there are various other judgments, Wherein the issue of nexus of the said services with the manufacturing final product is decided in favour of the assessee. Appeal allowed.

Summary

Issues:
1. Denial of Cenvat Credit on input services due to lack of nexus with manufacturing of final product.

Analysis:
The case involved the appellant taking Cenvat Credit on ISD invoices for various input services, with the credit distributed to other units. The department issued a show cause notice proposing denial of Cenvat Credit based on the audit objection regarding the nexus of input services with manufacturing. The Adjudicating Authority confirmed part of the demand, leading to an appeal before the Commissioner (Appeals) and subsequently to the CESTAT against the disallowance of Cenvat Credit as per the impugned order.

The appellant's representative argued that a previous order against a similar show cause notice was accepted by the department, settling the issue to the extent the demand was dropped. Additionally, the appellant cited various judgments where Cenvat Credit was allowed on similar input services. The representative contended that the issue was no longer under dispute based on these judgments and the department's acceptance of previous orders.

The Learned Member considered the submissions and records, noting that the genesis of the case was an audit objection against the appellant's units for the same input services. The Adjudicating Authority and CESTAT Mumbai had dropped the demand for the other unit, and the department had accepted the order in that case. The Member agreed with the appellant's argument, supported by case laws, that the input services were admissible, as established in various judgments favoring the assessee. Consequently, the Member modified the impugned order and allowed the appeal, affirming the appellant's entitlement to Cenvat Credit for the input services in question.