9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 117 - AT - Central ExciseAvailment and utilisation of CENVAT credit on input services and capital goods at Daman unit - respondent was a manufacturer or not - input services and capital goods have a nexus qua the process of manufacture or not - HELD THAT - In view of Rule 3 of CCR, the credit of either excise duty paid on input /capital goods or service tax paid on the input services have been termed as Cenvat credit and the said Cenvat credit is allowed to be availed by the manufacturer and service provider and utilised either for payment of excise duty or for payment of service tax. In the said provisions, there is no explicit condition that for manufacture and services provider separate account has to be maintained for availment of Cenvat credit and utilization of Cenvat credit. Therefore in the absence of any such restriction or prohibition, the assessee is free to maintain a consolidated Cenvat account and discharge the excise duty as well as the service tax. The CENVAT credit is kind of common kitty into which credit of duty paid on inputs and capital goods and credit of service tax paid on input services can be taken. Since the respondent is both a manufacturer and provider of output services from their Daman factory during the disputed period they are eligible for availment of Cenvat credit on input, capital goods and input services used for providing output services from the centralized service tax registration at the Daman factory and used for manufactured goods and for providing their output services. Further Cenvat being a beneficial piece of legislation, which was enacted for removing the cascading effect, the denial of credit citing procedural irregularities is unsustainable. It is a settled position that for availing the Cenvat credit the location from where the output service provided is not relevant. As long the service is provided by the service provider for which any input service is received and used for providing output service, the Cenvat credit on such input services shall be available and also for utilizing the said Cenvat credit for payment of service tax on the output service. Therefore, the location from where the service is provided and received is immaterial for availing the Cenvat credit on input services as well as for payment of service tax on the output services. Apex Court in the case of COMMISSIONER OF C. EX., AHMEDABAD VERSUS RAMESH FOOD PRODUCTS 2004 (11) TMI 103 - SUPREME COURT held that there is no requirement of one-to-one co-relation in availment of Cenvat. The impugned order is correct and legal which does not require any interference - impugned order upheld - appeal of Revenue dismissed.
Issues Involved:
1. Eligibility of CENVAT credit on input services and capital goods at Daman unit. 2. Nexus of input services and capital goods with the excisable goods manufactured at Daman. 3. Cross-utilization of CENVAT credit between manufacturing and service provision activities. 4. Validity of centralized service tax registration amendment and its effective date. Summary: 1. Eligibility of CENVAT Credit on Input Services and Capital Goods at Daman Unit: The respondent, engaged in manufacturing ATMs and other office machinery, availed CENVAT credit on input services and capital goods. The revenue contended that these credits did not have any nexus with the excisable goods manufactured at the Daman unit. The Tribunal found that the respondent was also providing various taxable services from its Daman factory, and the centralized billing for these services was shifted from Mumbai to Daman in January 2014. The Tribunal upheld that the respondent was eligible for CENVAT credit on input services and capital goods used for providing output services from the centralized service tax registration at the Daman factory. 2. Nexus of Input Services and Capital Goods with the Excisable Goods Manufactured at Daman: The revenue argued that the input services and capital goods did not have any direct or indirect nexus with the manufacturing of excisable goods at the Daman unit. The Tribunal, however, noted that the respondent was engaged in both manufacturing and providing taxable services, and there was no dispute about the genuineness of the transactions or the duty-paid documents. The Tribunal held that the input services and capital goods were used for providing output services and manufacturing activities, thus eligible for CENVAT credit. 3. Cross-Utilization of CENVAT Credit: The revenue contended that the respondent could not cross-utilize CENVAT credit between manufacturing and service provision activities. The Tribunal referred to Rule 3 of the CENVAT Credit Rules, 2004, which allows manufacturers and service providers to take credit of duties and taxes and utilize it for payment of excise duty or service tax. The Tribunal emphasized that there is no explicit condition requiring separate accounts for manufacturing and service provision, allowing the respondent to maintain a consolidated CENVAT account and utilize the credit accordingly. 4. Validity of Centralized Service Tax Registration Amendment: The revenue argued that the amendment of the centralized service tax registration from Mumbai to Daman was effective only from 20.08.2015, not from March 2014 as claimed by the respondent. The Tribunal, relying on judicial precedents, held that the amendment should be considered effective from the date of application, i.e., 14.01.2014. The delay in granting the amendment was attributed to the authorities, and the respondent could not be penalized for it. Conclusion: The Tribunal upheld the respondent's eligibility to avail and utilize CENVAT credit on input services and capital goods at the Daman unit, allowed cross-utilization of CENVAT credit, and recognized the centralized service tax registration amendment as effective from the date of application. The revenue's appeal was dismissed, and the impugned order was upheld as correct and legal.
|
