9911796707
TMI Blog2014 (7) TMI 895X X X X Extracts X X X X X X X X Extracts X X X X ..... credit. The respondent also is registered with service tax authorities for rendering commission agents service which is taxable under the category of "Business Auxiliary Service" (BAS). They were availing the benefit of cenvat credit on inputs, capital goods, input services and discharging appropriate duty of excise on the final products manufactured by them. From 1.6.2006, they had opted to avail the benefit of exemption under the above notification and they are liable to reverse cenvat credit of duty paid on the inputs. They have reversed the credit attributable to the inputs lying in stock, contained in work in progress and finished goods as on 31.3.2006. Even after the reversal of credit, they had the balance of credit in their cenvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot for providing output service and the said inputs credit cannot be utilized for payment of service tax towards output service. He relies on Rule 2(k)and Rule 3(3) which prohibits utilization of cenvat credit availed on goods for payment of service tax for output services. 5. The learned advocate for the respondent reiterates the findings of the Commissioner (Appeals) in the impugned order and submits that the appellate authority has rightly allowed the appeal. He submits that there is no allegation by the department on the admissibility of cenvat credit and once the admissibility of credit is not under dispute, there is no bar on utilization of credit for payment of service tax on output services. He also submits that as per Rule 3(4) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods but also the provider of output services and both the activities are carried out in the same premises. 8. Apparently there is no dispute on admissibility of the cenvat credit availed by the respondents as the Commissioner (Appeals) in the impugned order has decided in favour of respondents, which is not contested in the appeal by Revenue. Once it is held that the respondents are eligible for availment of input credit, they can utilize the cenvat credit available with them either for payment of excise duty on the final products or for payment of service tax on the output services as stipulated in the sub-rule (4) of Rule 3 of CCR 2004. The restrictions on utilization of cenvat credit stipulated in the CCR relates only for specific typ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct as also service tax on any output service (other situations also covered under the said sub-rule, which are not relevant in the present case). Thus, we find that Rule 3 of the CENVAT Credit Rules, 2004 does not stipulate maintaining separate account as a manufacturer and as a service provider. Third proviso to sub-rule (4) of Rule 3, provides that no credit of the additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act, shall be utilized for payment of service tax on any output service. Similar restrictions are in other proviso. We also note that there are certain restrictions on the utilization of particular type of duties which are elaborated in sub-rule (b) of Rule 7 of the CENVAT Credit Rules. These res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer should maintain two separate accounts one in respect of credit attributable to inputs, capital goods and services meant for excisable goods and credit attributable to capital goods, inputs and services attributable to the service provided by them. Common CENVAT Credit Rules have been framed in terms of powers conferred by Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. Rule 3(1) enables a 'manufacturer' or a 'provider of taxable service' to take credit of specified duties and utilize them to discharge duty liability under Rule 3(4) of the CENVAT Credit Rules. A credit can be utilized for payment of any duty of excise on any final product or for payment of service tax on any ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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