2013 (11) TMI 22 - AT - Central Excise

Cenvat Credit - Requirement of Maintaining Separate Account for credit to be utilized in payment of Service Tax and / or Central excise duty - Held that - There is no need for maintaining separate accounts and the credit of service tax paid by the contractors and utilized for payment of excise duty by the appellant allowed - Following CCE Coimbatore Vs Lakshmi Technology and Engineering Industries Ltd. 2011 (2) TMI 1275 - CESTAT, CHENNAI - no separate account is required for credit of duty taken on inputs and input services and the assessee was allowed the benefit Decided in favour of Assessee.

Summary

Issues:
Whether separate accounts are required for maintaining CENVAT credit of service tax paid by subcontractors and utilized for payment of excise duty by the manufacturer.

Analysis:
The appellant, engaged in manufacturing Intelligent Data Devices used in Telecom Towers, utilized subcontractors who paid service tax. The appellant claimed credit for this service tax in a common pool account for inputs/capital goods. The original adjudicating authority agreed with the appellant, but the Commissioner (Appeals) allowed the department's appeal, leading the appellant to approach the Tribunal seeking waiver of predeposit and stay.

Upon hearing both parties, the judge noted that the issue had been settled by two precedent decisions of the Tribunal, making it no longer res integra. The judge decided that there was no need to consider the stay application and postponed the matter for final hearing. Consequently, the requirement of predeposit was waived, and the appeal was taken up for a final decision.

The judge referred to previous Tribunal cases, including Commissioner of Central Excise, Chennai Vs Areva T&D India Ltd., and Commissioner of Central Excise Coimbatore Vs Lakshmi Technology and Engineering Industries Ltd., where it was held that no separate account is necessary for the credit of duty taken on inputs and input services. As the issue was already settled by these precedents, the judge allowed the appeal in favor of the appellant, granting any consequential relief deemed appropriate.

Overall, the judgment clarified that manufacturers are not obligated to maintain separate accounts for CENVAT credit of service tax paid by subcontractors and used for excise duty payment, as established by previous Tribunal decisions, providing relief to the appellant in this case.