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2016 (10) TMI 272 - AT - Central ExciseJob work - manufacture of excisable goods falling under Chapter 90 of Central Excise Tariff Act, 1985 - the job workers were paying the service tax and the Appellant was availing Credit of the service tax paid by the job worker - job worker was exempted from payment of service tax under Notification No.8/2005-ST, dt.01.03.2005 - whether the reversal of credit and imposition of penalty justified on the ground that job worker was exempted from payment of service tax? Held that - the decision in the case of Commissioner of Central Excise & Customs, Aurangabad Versus Laxmi Metal Pressing Works (P.) Ltd. 2009 (10) TMI 181 - CESTAT, MUMBAI apply where it was held that a notification issued under Section 93 would exempt a provider of taxable service from payment of Service tax leviable under Section 66. Where such exemption is available, it can be said that Service tax is not payable. But that would not detract from the settled legal position that Cenvat credit of Service tax paid by the service provider is available to the service recipient under Rule 3. Reversal of credit and imposition of penalty not justified - appeal allowed - decided in favor of appellant.
Issues:
Appeal against demand of CENVAT Credit and penalty imposed due to irregular availment of credit under Notification No.8/2005-ST. Analysis: The appeal was filed against the orders passed by the Commissioner (Appeals) regarding the demand of CENVAT Credit and penalty imposed on the Appellant for irregular availment of credit. The Appellant, engaged in manufacturing excisable goods falling under Chapter 90 of Central Excise Tariff Act, 1985, had received processed goods from job workers who paid service tax. The Appellant availed credit of the service tax paid by the job workers. However, it was alleged that since the job worker was exempt from paying service tax under Notification No.8/2005-ST, the Appellant's availment of CENVAT Credit amounting to ?4,40,000 was irregular. The Commissioner (Appeals) upheld the demand and penalty, leading to the present appeal. The Appellant argued that the issue was settled by the Tribunal in previous cases such as CCE Mumbai-III Vs DIL Ltd and CCE Aurangabad Vs M/s Laxmi Metal Pressing Works Pvt Ltd. The Authorised Representative for the Revenue reiterated the findings of the Commissioner (Appeals). The Tribunal examined the issue in light of the mentioned cases, particularly the decision in Laxmi Metal Pressing Works Pvt Ltd case. It was observed that CENVAT credit of service tax paid by the service provider is available to the service recipient under Rule 3 of the Cenvat Credit Rules, 2004, regardless of any exemption granted. The Tribunal concluded that the impugned order lacked merit in light of the settled legal position and set it aside. The appeal was allowed with consequential relief, if any, as per law. In conclusion, the Tribunal ruled in favor of the Appellant, setting aside the order of the Commissioner (Appeals) regarding the demand of CENVAT Credit and penalty imposed. The decision was based on the settled legal position that CENVAT credit of service tax paid by the service provider is available to the service recipient, as per Rule 3 of the Cenvat Credit Rules, 2004.
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