2021 (11) TMI 13 - AT - Central Excise

CENVAT Credit - input services - Works Contract Service - structuring materials - services used for construction of Road - services used for setting up of New Mill house - HELD THAT - In the case of M/S KELLOGS INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX, TIRUPATHI GST 2020 (7) TMI 414 - CESTAT HYDERABAD , learned Hyderabad Bench of CESTAT has considered an almost identical issue insofar as it relates to the denial of cenvat credit availed on Works Contract Service, denial of cenvat credit availed in respect of services used for Construction of Road within the factory premises and denial of cenvat credit availed on the services used for setting up of new Mill House within the factory premises and the same has been answered in favour of the taxpayer therein. Denial of cenvat credit availed on structuring materials like Channels, Angles, Joists, HR Coil/sheet, etc., - HELD THAT - The learned Mumbai bench of CESTAT has considered the very same issue and vide its order reported in 2020- TIOL-530-CESTAT-MUM. in the case of M/S JSW STEEL COATED PRODUCTS LTD. VERSUS COMMISSIONER, GST CENTRAL EXCISE, NAGPUR-II 2020 (4) TMI 144 - CESTAT MUMBAI has held that the denial of cenvat credit was bad. The denial of cenvat credit in this case cannot sustain. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Irregular availment of cenvat credit on Works Contract Service
2. Irregular availment of Cenvat Credit on structuring materials
3. Availment of inadmissible Cenvat credit for construction of Road
4. Availment of inadmissible Cenvat Credit for setting up of New Mill house

Analysis:

Issue 1: Irregular availment of cenvat credit on Works Contract Service
The Revenue alleged irregular availment of cenvat credit amounting to ?16,13,835. The adjudicating authority confirmed a demand of ?39,28,489 along with interest and penalty. The appellant appealed, citing precedents where denial of cenvat credit on similar issues was settled in favor of the taxpayer. The Tribunal concurred, referring to the case of M/s. Kellogg India Pvt. Ltd. where denial of cenvat credit on Works Contract Service was rejected. The Tribunal set aside the impugned order, allowing the appeal with consequential benefits.

Issue 2: Irregular availment of Cenvat Credit on structuring materials
The appellant was accused of irregularly availing Cenvat Credit on structuring materials, involving a significant amount. The Tribunal applied the precedent set by the Mumbai bench of CESTAT in the case of M/s. JSW Steel Coated Products Ltd., where denial of cenvat credit on similar items was deemed incorrect. Relying on this decision and the previous judgments, the Tribunal held that the denial of cenvat credit in this case was unsustainable. Consequently, the impugned order was set aside, and the appeal was allowed with any applicable benefits.

Issue 3: Availment of inadmissible Cenvat credit for construction of Road
The case involved the availment of inadmissible Cenvat credit for the construction of a Road within the factory premises. Citing relevant precedents, including the decision in M/s. Kellogg India Pvt. Ltd., the Tribunal concluded that denial of cenvat credit for such services was not justified. The Tribunal set aside the impugned order, emphasizing that denial of cenvat credit on these grounds could not be upheld.

Issue 4: Availment of inadmissible Cenvat Credit for setting up of New Mill house
The appellant faced allegations of availing inadmissible Cenvat Credit for setting up a New Mill house within the factory premises. Drawing on established legal principles and previous judgments, the Tribunal found that denial of cenvat credit for services related to setting up a plant was unjustified. Referring to the Hyderabad Bench's decisions, the Tribunal ruled in favor of the taxpayer, setting aside the impugned order and allowing the appeal with any consequential benefits as per the law.

In conclusion, the Tribunal found in favor of the appellant on all issues, setting aside the impugned order and allowing the appeal with any applicable benefits.