2024 (12) TMI 466 - AT - Central Excise

CENVAT Credit - denial of credit alleging that the input services in question were not received by the Paharpur unit., and therefore, it cannot be said that the input services were used directly or indirectly or in or in relation to the manufacture of final goods by Paharpur unit - HELD THAT - In appellant s own case 2024 (6) TMI 761 - CESTAT KOLKATA , this Tribunal has observed that ' For the period from 01.04.2012 to 31.03.2013, the appellants have claimed that they have taken the credit for the Service Tax paid by the Head Office for the services rendered to their Paharpur unit only. Thus the conditions set w.e.f. 01.04.2012 under Rule 7 of the Cenvat Credit Rules also have been fulfilled. However, without going into the factual details to ascertain this claim of the appellant, since we have already observed above that the proceedings are not sustainable on account of lack of jurisdiction, we hold that the confirmed demand in respect of the period April 2012 to March 2013 is also liable to be set aside on this count itself and we do so.' As the issue has already been settled in favour of the appellant in their own case for the earlier period, therefore, the issue is no more res integra. Therefore, the proceedings against the appellant are not sustainable as the appellant has availed the Cenvat credit on the invoices issued by the I.S.D.(HO) without challenging at the end of the I.S.D.(HO). There are no merit in the impugned orders, the same are set aside - appeal allowed.

Summary

Issues:
- Denial of Cenvat credit based on input services not received by the manufacturing unit.
- Jurisdictional authority to question the eligibility of Cenvat credit taken by the Input Service Distributor (ISD).
- Application of Rule 7 of Cenvat Credit Rules for distribution of credit by ISD.
- Applicability of previous Tribunal decisions in similar cases.

Analysis:
The judgment revolves around the denial of Cenvat credit to the appellant based on the allegation that input services were not received by the manufacturing unit, but by other units. The Department issued Show Cause Notices for various periods, seeking to deny the Cenvat credit taken by the appellant. The Tribunal observed that the issue was previously settled in favor of the appellant for an earlier period, where it was held that the Cenvat credit cannot be denied. The Tribunal emphasized that the ISD distributing Head Office could distribute the Cenvat credit to the manufacturing unit even if the services were used by other units until the relevant Rule was amended. The confirmed demand for the earlier period was set aside based on this reasoning.

Regarding the jurisdictional authority to question the eligibility of Cenvat credit taken by the ISD, the Tribunal cited various case laws and held that the officials with whom the ISD Returns are filed have the jurisdiction to question the Cenvat availment. The Tribunal concluded that the proceedings initiated against the appellant were without jurisdiction, and therefore set aside the impugned order and allowed the appeal on merits.

The judgment also delved into the application of Rule 7 of the Cenvat Credit Rules for the distribution of credit by the ISD. It was noted that the conditions specified in Rule 7 were fulfilled by the appellant, and the confirmed demand for a specific period was set aside due to lack of jurisdiction, without delving into the factual details of the claim made by the appellant.

In conclusion, the Tribunal found that the proceedings against the appellant were not sustainable as the appellant had availed the Cenvat credit on the invoices issued by the ISD without any challenge at the end of the ISD. The impugned orders were set aside, and the appeals were allowed with consequential relief, if any, as per law.