2015 (4) TMI 34 - AT - Central Excise

Waiver of pre deposit - CENVAT Credit - input services - services have not been exclusively received by the appellant unit or for other premises - service received by the appellant for repair and maintenance of refrigerators warranty period - receipt of IPR service - Held that - on going through the agreement between Takecare India Pvt. Ltd. and the appellant company and M/s P.E. Electronics and the appellant company it is seen that these agreements are only in respect of the unit at Shajahanpur, Distt. Alwar. Similarly, the invoices by the respective service provider i.e. Takecare India Pvt. Ltd. and M/s.P.E. Electronics Pvt. Ltd. have also been issued to the appellant company unit at Shajahanpur, Distt. Alwar and similarly, the invoices issued by the advertisement service provider an also to appellant company at Shajahanpur, Dist Alwar. Thus prima-facie, we are of the view that the services, in question, have been received by the appellant company unit at Shajahanpur, Dist. Alwar and as such, there is no merit in the Departments contention that the services in question may have been used in respect of the products manufactured by other factories of the appellant company. It is also seen that the department does not dispute the appellant's contention that other units of the appellant company have entered into separate agreement for the same service providers M/s. Take care and M/s. P.E. Electronics Pvt. Ltd. - the appellant have strong prima-facie case in their favour. - Stay granted.

Issues:
1. Eligibility of Cenvat credit on repair and maintenance services received by the appellant for refrigerators sold during warranty period.
2. Eligibility of Cenvat credit on IPR service received for using the brand name 'Electrolux' on manufactured goods.
3. Eligibility of Cenvat credit on advertisement services received for promoting the brand name 'Kelvinator'.
4. Confirmation of Cenvat credit demand, interest, and penalty by the Commissioner.

Issue 1 - Repair and Maintenance Services:
The appellant's manufacturing unit received repair and maintenance services for refrigerators sold during the warranty period. The Department contended that these services might have been used for goods manufactured by other units of the company, thus challenging the eligibility of Cenvat credit amounting to Rs. 2.23 Crores. The appellant argued that the services were solely for the refrigerators manufactured by their unit, supported by agreements and invoices showing the services were specifically for the Shajahanpur unit. The Tribunal found in favor of the appellant, stating that the services were indeed utilized for the Shajahanpur unit, and hence, the appellant was eligible for the Cenvat credit.

Issue 2 - IPR Service for Brand Name 'Electrolux':
The appellant received IPR service from another company for using the brand name 'Electrolux' on their products. The Department disputed the eligibility of Cenvat credit amounting to Rs. 1.21 Crores, suggesting that the brand name might have been used on goods from other units as well. The appellant argued that the service was exclusively for their unit, as per the agreement and invoices. The Tribunal agreed with the appellant, noting that the services were directed only to the Shajahanpur unit, thus allowing the Cenvat credit.

Issue 3 - Advertisement Services for Brand Name 'Kelvinator':
Regarding the advertisement services for promoting the brand name 'Kelvinator,' the Department challenged the eligibility of Cenvat credit of Rs. 4.2 Lakhs, claiming it was not exclusively used for the products of the Shajahanpur unit. The appellant contended that the services were solely for the refrigerators manufactured by their unit, supported by the brand usage specifics. The Tribunal found in favor of the appellant, stating that the services were indeed utilized for the Shajahanpur unit, making them eligible for the Cenvat credit.

Issue 4 - Confirmation of Cenvat Credit Demand:
The Commissioner had confirmed a Cenvat credit demand of Rs. 3.49 Crores against the appellant, along with interest and a penalty. The appellant filed an appeal against this order, seeking a waiver of the demand, interest, and penalty. After hearing both sides, the Tribunal found that the appellant had a strong case in their favor. They noted that the services in question were specifically for the Shajahanpur unit, and thus, waived the requirements of pre-deposit, interest, and penalty for the appeal hearing, allowing a stay on recovery during the appeal's pendency.

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