2022 (10) TMI 795 - AT - Central Excise

CENVAT Credit - input service distribution - whether input service distributed by ISD have been rightly disallowed without invocation of Rule 14 of CCR, 2004? - HELD THAT - Rule 14 of CCR have not been invoked in either of the show cause notices. In this view of the matter, there are no disallowance of the CENVAT credit can be made save and except by resorting to the provision of Rule 14 of CCR. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
- Disallowance of input service distributed by ISD without invoking Rule 14 of CCR, 2004.

Analysis:

Issue 1: Disallowance of input service without invoking Rule 14 of CCR, 2004
The appellant, a company with a Head Office and manufacturing units, claimed input service credit for services like property management, security services, and car parking services. The audit revealed that these services were used for renting immovable property and not attributable to the manufacturing units. The appellant distributed the credit to the manufacturing units based on the turnover proportion. The appellant argued that disallowance without invoking Rule 14 of CCR was incorrect. The Tribunal noted that Rule 14 of CCR was not invoked in the show cause notices. Without invoking Rule 14, the Tribunal held that no disallowance of Cenvat credit could be made. Consequently, the Tribunal allowed the appeals, setting aside the impugned orders, and granted the appellant consequential benefits in accordance with the law.

This judgment emphasizes the importance of following procedural requirements, such as invoking relevant rules, before disallowing credits. It highlights the significance of adherence to statutory provisions in tax matters to ensure fair treatment for taxpayers.