2015 (1) TMI 446

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..... The appellants are engaged in the manufacture of 'Poly Resin' falling under Chapter 39. During the relevant, they were enjoying the SSI Notification. As they were also providing certain services and were paying service tax for the same, they were availing the Cenvat credit on service tax paid on the input services so utilized by appellants on the outward services. W.e.f. February, 2010, they cross .....

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..... as an input credit for the services being provided by them and as such was available for utilization towards service tax payable on the output services. Ld. Advocate clarifies that after utilizing the credit for payment of output service tax, there was balance to the tune of Rs. 3,76,758/- which they transferred to their excise credit. In my view, the said transfer of credit which was availed whe .....

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..... t have any nexus with the goods being produced by the appellants at present and also they have adduced no such evidence. It is in this context that the contention of the appellants that there is no need to establish the one to one co-relation between the inputs or input services with the final product, fails the test of merit and the legal requirement. For application of the aforesaid principle, t .....

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..... pellants in their defence are not relevant to their case. Thus, I find no reason to differ with the findings of the adjudicating authority on this count. Further, regarding imposition of penalty, I find that the appellants had utilized the credit knowingly for payment of duty involved in the clearance of final product though it had no relevance with the manufacture of the goods. Thus they are liab .....

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..... rity for fresh decision in the light of the observations made here in above. The appellants plea of limitation would also be considered by the adjudicating authority, including the appellants plea that the issue being a bonafide interpretation of the provision of law does not call for any imposition of penalty. 5. Appeal is thus allowed by way of remand. (Pronounce in the open Court on)
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