2024 (8) TMI 1202 - AT - Central Excise

Denial of CENVAT credit under Rule 14 of Cenvat Credit Rules, 2004 with proposal to impose penalties and recover interest - denial on the ground that input service invoices did not have registration number of service provider - HELD THAT - In respect of cenvat credit of Rs.26,445/- there are allegations that registration number of service provider is not available. It is noted that there are no allegations that the services provided through the said invoices were not received by the appellant nor there are allegations that the said services did not suffer service tax. It is, therefore, held that the appellant was eligible for cenvat credit of Rs.26,445/-. It is further found that cenvat credit of Rs.60,776/- was denied to the appellant on the ground that the invoices were having the address of office and not that of factory - there are plethora of judgments of this Tribunal and higher courts that on such ground, cenvat credit cannot be denied so long as there are no allegations that the services or the goods were not received in the factory and the goods and services did not suffer service tax or central excise duty, as the case may be. In the present case, I find that there are no allegations that the goods and services did not suffer tax or duty. Therefore, the appellant was eligible to avail cenvat credit of Rs.60,776/-. CENVAT credit of Rs.4,68,680/- was availed of service tax paid on rent paid by the appellant after the year 2001 when they made application for inclusion of additional premises into the approved plan of the factory - the appellant was eligible for cenvat credit of Rs.4,68,680/-. It is further noted that the disputed cenvat credit of Rs.1,24,044/- also involved service tax or central excise duty on MS angles and electrodes. It is noted that learned AR has relied on ruling by Hon ble Bombay High Court in the case of MANIKGARH CEMENT VERSUS COMMISSIONER OF CUS. C. EX., NAGPUR 2017 (7) TMI 1117 - BOMBAY HIGH COURT wherein in the year 2018, it was held that central excise duty paid on welding electrodes used for repair and maintenance of plant and machinery is not admissible for availment of cenvat credit - the appellant was eligible for cenvat credit of Rs.1,24,044/-. Thus, the appellant was eligible for cenvat credit of Rs.26,445/-, Rs.60,776/-, Rs.4,68,680/- and Rs.1,24,044/- - appeal allowed.

Summary

Issues:
- Denial of cenvat credit on input service invoices lacking service provider's registration number.
- Denial of cenvat credit on input invoices with administrative office address instead of factory address.
- Denial of cenvat credit on service tax paid for factory rent not included in the approved plan.
- Denial of cenvat credit on items used for repair and maintenance like MS angles and electrodes.
- Interpretation of judgments by Hon'ble Bombay High Court and Hon'ble Supreme Court on admissibility of cenvat credit for welding electrodes.

Analysis:
1. The appellant, a manufacturer availing cenvat credit, faced denial of credit amounting to Rs.6,64,564 due to alleged inadmissible claims. The show cause notice issued under Rule 14 of Cenvat Credit Rules, 2004 led to penalties and interest imposition by the original authority.

2. The appellant challenged the denial of cenvat credit before the Commissioner (Appeals) on grounds of procedural lapses not justifying substantive benefit denial. However, the appeal was unsuccessful, prompting the appellant to approach the Tribunal for redressal.

3. The appellant's representative argued for the admissibility of cenvat credit amounts denied, citing specific reasons for each category of denial. The arguments included lack of allegations regarding non-payment of service tax, receipt of goods and services, and compliance with tax obligations.

4. The Assistant Commissioner, representing the Revenue, referred to a judgment by the Hon'ble Bombay High Court regarding the inadmissibility of cenvat credit on welding electrodes. A request for time to provide the citation of the case was made.

5. Subsequently, both parties submitted synopses and citations from the Hon'ble Bombay High Court and the Hon'ble Supreme Court regarding the admissibility of cenvat credit for items like welding electrodes used for maintenance and repair of plant and machinery.

6. After a thorough review of the case records, submissions, and relevant judgments, the Tribunal found in favor of the appellant on all disputed cenvat credit amounts. The Tribunal relied on various precedents and the specific findings of the Hon'ble Supreme Court in The Kisan Cooperative Sugar Factory Ltd. case to support its decision.

7. Consequently, the Tribunal held that the appellant was entitled to cenvat credit amounts previously denied, totaling Rs.26,445/-, Rs.60,776/-, Rs.4,68,680/-, and Rs.1,24,044/-, as detailed in the preceding analysis.

8. Based on the findings, the Tribunal allowed the appeal, setting aside the impugned order and ruling in favor of the appellant, thereby resolving the dispute regarding the denial of cenvat credit.

This comprehensive analysis outlines the issues, arguments presented by both parties, relevant legal precedents, and the final decision by the Tribunal, providing a detailed overview of the judgment.