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2024 (6) TMI 761 - AT - Central ExciseIssues Involved: 1. Eligibility of Cenvat Credit based on ISD invoices. 2. Jurisdiction of Kolkata authorities to question the Cenvat Credit distributed by the Mumbai Head Office. Summary: 1. Eligibility of Cenvat Credit based on ISD invoices: The Appellant's manufacturing unit at Paharpur received Cenvat credit based on ISD invoices issued by their corporate office in Mumbai. The Department issued Show Cause Notices alleging that the input services were not received by the Paharpur unit and were used by units in Mumbai and Chennai, thus denying the Cenvat credit and demanding Rs. 38,06,03,169/-. The adjudicating authority confirmed a demand of Rs. 13,55,26,043/- for ineligible input services. The Appellant argued that the Show Cause Notice did not list ineligible services and that the adjudicating authority exceeded its scope by listing various ineligible services. 2. Jurisdiction of Kolkata authorities to question the Cenvat Credit distributed by the Mumbai Head Office: The Appellant contended that the Cenvat Credit was pooled and distributed by the Mumbai Head Office, which is registered as an ISD unit and files returns with Mumbai jurisdictional officials. They argued that any objections regarding the eligibility of Cenvat credit should be raised by Mumbai officials, not Kolkata officials. The Appellant cited case laws supporting that eligibility should be questioned at the ISD unit's end, not the recipient's end. Judgment: The Tribunal found that the Department erred in its stand that Cenvat credit could only be distributed for services used by the Paharpur unit. The rules until 31.03.2012 did not specify that the input service must be used by the unit taking the credit. Therefore, the confirmed demand for the period June 2005 to 31.03.2012 was set aside. Regarding jurisdiction, the Tribunal held that the Kolkata authorities had no jurisdiction to question the eligibility of Cenvat credit taken by the Mumbai unit. The Tribunal cited various case laws, including Nalco Water India Limited and Rallis India Ltd., which supported that the eligibility of Cenvat credit should be questioned by the jurisdiction where the ISD returns are filed. Consequently, the proceedings initiated by Kolkata authorities were deemed without jurisdiction, and the impugned order was set aside. For the period from 01.04.2012 to 31.03.2013, the Tribunal noted that the Appellant claimed compliance with the conditions set under Rule 7 of the Cenvat Credit Rules. However, since the proceedings were already found unsustainable due to lack of jurisdiction, the confirmed demand for this period was also set aside. Conclusion: The Appeal was allowed with consequential relief as per law. The judgment emphasized that the eligibility of Cenvat credit should be questioned at the ISD unit's end and that the Kolkata authorities lacked jurisdiction in this matter.
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