9911796707
TMI Blog2016 (10) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... s would be covered under input service. Utilization of CENVAT credit - Rule 3 (4) of the Cenvat Credit Rules, 2004 - whether the credits taken have been properly used for making payment of excise duty/service tax on output service? - Held that: - Cenvat credits properly taken may be utilized for payment of either excise duty on final products manufactured or service tax on output service rendered. The scheme of Cenvat credit does not require segregation of the credits availed in terms of whether such input/input services or utilized for the manufacture of final products are used for rendering output service. This specific issue has been clarified time and again by CBEC. The issue has been clarified by DGST in a FAQ raised and also by CBEC in Circular No. 381/23/2010/862 dated 30/03/2010 - similar views have been taken in the case of M/s Pipavav Shipyard Ltd. Versus Commissioner, Central Excise & Service Tax, Bhaavnagar [2015 (8) TMI 58 - CESTAT AHMEDABAD]. The credits have been properly availed on input services - restriction of the CENVAT credit to the service portion of the contract withheld - entire quantum of the service tax paid by the commission agent entitled as credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ratio of value of material supplied by the appellant to the value of services provided by the appellant under the supply and services agreements. 3. The appellant has challenged the impugned order on the following grounds : (1) the commission agent services as well as insurances services qualify within the definition of input service as defined in Rule 2 (l) of the Cenvat Credit Rules in as much as commission agent services are used by the appellant for manufacture and supply of final products as well as provision of taxable services. The insurance services were also used by the appellant for the purposes of security of the goods and services supplied and are in relation to its business activities and accordingly are squarely covered by the definition of input service. There is no legal basis for the Revenue to restrict the Cenvat credit to the extent of service portion of the contract executed by the appellant. There is no basis for the Department to hold that the services are not input services to the extent of cost of material supplied by the appellant; (2) Since the appellant is a manufacturer of goods as well as a service provider, they are entitled to take the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. 3 (Bom.) and (vii) Sumita Tex Spin Pvt. Ltd. vs. CCE ST, Rajkot reported in 2015 (39) S.T.R. 502 (Tri. - Ahmd.) 4. We have heard Shri B.L. Narsimhan, learned Advocate for the appellant as well as Shri Amresh Jain, learned DR for the Revenue. 5. In the impugned order, a part of the Cenvat credit taken on input services has been sought to be denied. To decide on the question whether this is proper or not we will need to examine : (i) whether the credit on such input services were properly taken and (ii) whether the credits taken as above have been properly used for making payment of excise duty/service tax on output service. The 'Input Service' is defined in Rule 2 (I) of the Cenvat Credit Rules as follows :- (i) 'input service means any service, - (i) used by a provider of taxable service for providing an output service ; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, And includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured or service tax on output service rendered. The scheme of Cenvat credit does not require segregation of the credits availed in terms of whether such input/input services or utilized for the manufacture of final products are used for rendering output service. This specific issue has been clarified time and again by CBEC. In the FAQ clarified by DGST it has been mentioned that Cenvat credit may be utilized for payment of service tax on output services in addition to discharging the Central Excise duty liability on finished products. On the question of gross utilization of credit on inputs and input services, CBEC in Circular No. 381/23/2010/862 dated 30/03/2010, has clarified that the Cenvat credits on inputs/ capital goods and input services which are used for manufacture of goods or for provision of services is available in a common pool and can be used for payment of excise duty and/or service tax. 8. The present issue has already been considered in several judicial pronouncements all of which lay down unambiguously that the common pool of Cenvat credit can either be used for excise duty payment or for service tax payment. The only caveat is that the input credit shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also on input service for payment of excise duty or service tax. Hence, we do not find any reason to deny the input service credit on the ground that it was shown in the ER-1 return . Similar views have also been held in the :- (i) CCE, Coimbatore vs. Lakshmi Technology Engineering Indus, Ltd. reported in 2011 (23) S.T.R. 265 (Tri. - Chennai); (ii) CCE, Chennai vs. Areva T D India Ltd. reported in 2011 (23) S.T.R. 33 (Tri. - Chennai) ; (iii) CCE, Salem vs. V. Thangavel Sons (P) Ltd, reported in 2015 (37) S.T.R. 144 (Tri. - Chennai) ; (iv) SS. Engineers vs, CCE, Pune - I reported in 2015 (38) S.T.R. 614 (Tri, - Mumbai) , (v) CCE, Pune - I vs, S.S. Engineers reported in 2016 (42) S.T.R 3 (Bom.) and (vi) Sumita Tex Spin Pvt. Ltd, vs. CCE ST, Rajkot reported in 2015 (39) S.T.R. 502 (Tri. - Ahmd.) 9. As discussed above, we find that the credits have been properly availed on input services. Hence, there is no legal basis in the impugned order to restrict the Cenvat credit to the extent of the service portion of the erection, commissioning and installation service contract executed by the appellant. There is no bifurcation in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
