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TMI Blog2023 (7) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... epted the payment of duty on Towers by considering them as excisable goods, the credit availed on the inputs used in manufacturing the excisable goods cannot be denied. Thus the Commissioner has rightly dropped the demand in the impugned order and the dropping of the demand is sustainable. ETR ETP transferred credit of Rs.6,68,37,663/- to the assessee through inter office memo called ATD/TED during the period 2005-06 and 2006-07 - HELD THAT:- The Appellant has fulfilled the two primary conditions of availing credit, one is that the input/capital goods/ input service is duty paid and the second is that those have been used in rendering of the said output service. Since, the Appellant satisfies the essential conditions for availing the credit, the Cenvat credit cannot be denied on account of procedural lapse, if any. Accordingly, the findings of the adjudicating authority that Cenvat credit availed on the basis of Invoice/bills issued through ATD/TED, by ETR and ETP, the two branches of the Appellant cannot be denied on the ground that they have not been registered as Input Service Distributor for transferring the credit, agreed upon. There is no substance in the allegati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of Rs.6,68,37,663/- to the assessee through inter office memo called ATD/TED during the period 2005-06 and 2006-07. It is alleged that the credit is not admissible as ETR ETP have not obtained registration as Input Service Distributor as required under Rule-7A of the said Cenvat Credit Rules and the documents on the basis of which credit has been availed are not the documents as prescribed under Rule 9 of the said Rules . It is also alleged that all the inputs, capital goods and input services received by ETR and ETP could not be said to have been used by the assessee, as, in reference to the addresses mentioned in the bills where the materials were installed, it was readily identifiable as used and installed in premises throughout Eastern India other than the premises of the assessee. It is further alleged that during the material period, the said ETR and ETP did not provide any taxable service and/or manufactured any dutiable final products, and, accordingly, in terms of Rule 7 of the said Cenvat Credit Rules, 2004, credit of Service Tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or provider of exempted services cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of Cenvat Credit by ETR and ETP and availed utilized by the assessee during the Financial Year 2005-06 2006-07 holding that a substantive benefit cannot be denied on any procedural or technical lapses. However, on perusal of the notice it appears that the allegations are not solely based on procedural or technical ground. In addition to the fact the ETF ETP are not registered as Input Service Distributor and that the credit has been availed on the basis of illegitimate documents. The notice referred to the fact that all the inputs, capital goods and input services on which credit was transferred by ETR and ETP had not been used by the assessee in rendering of the output service. The notice, in reference to the addresses mentioned in the bills where the materials were installed, alleged that those were readily identifiable as used and installed in premises throughout Eastern India other than the Premises of the assessee. The notice further contended that during the material period, the said ETR and ETP did not provide any taxable service and / or manufacturerd any dutiable final products. Accordingly, as per Rule 7 of the said Cenvat Credit Rules, credit of Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Rules is as under:- Towers and parts accessories o Towers are no doubt goods , for otherwise they would not have been excisable goods on which duty has been paid (and thus credit thereon is providing of output service have been specified as input for availing credit by the provider o the output service, there cannot be ay logic denying the same to the said assessee. I am, therefore, of considered opinion that demand of Rs. 90,54,251/- in consequent of denying credit of the same amount is not sustainable and deserves to be dropped. 7. From the above findings of the adjudicating authority, we find that the adjudicating authority has given a clear finding that Towers and parts accessories of Towers are goods on which central excise duty has been paid by considering them as excisable goods . We observe that a provider of output service is eligible for availing credit on duty of excise paid on capital goods , input and Service Tax paid on input service used in relation to providing of output service. Towers parts accessories of Towers are an essential ingredient for providing the said output service. Installed Towers are used for receiving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufactured any dutiable final products, and, accordingly, in terms of Rule 7 of the said Cenvat Credit Rules, 2004, credit of Service Tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or provider of exempted services cannot be distributed. ETR and ETP did not provide any taxable service and/or manufactured any dutiable final products, and, accordingly, in terms of Rule 7 of the said Cenvat Credit Rules, 2004, credit of Service Tax attributable to service used in a unit exclusively engaged in manufacture of exempted goods or provider of exempted services cannot be distributed. 9. We observe that the adjudicating authority has examined the issue and dropped the proceedings. The findings of the adjudicating authority in the impugned order is reproduced below: 5. It is found that ETR and ETP are two branches of the assessee. They received invoices/ bills of capital goods, inputs and input services from different vendors and transferred the credit to the assessee through ATD/TED. There is no allegation that duty of excise or Service Tax has not been paid on capital goods inputs or input services. The proposal of denial of credit is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ical ground. It is not in dispute that the capital goods were duty paid and that the credit o that duty was taken by SSA Salem by complying with the further condition that the capital goods was to be used in the rendering of output service. It is settled law that a substantive benefit cannot be denied on any procedural or technical ground where the beneficiary has satisfied the substantive conditions for the benefit. The two substantive questions relevant to the present case are (a) that the capital goods must be duty paid and (b) that they should be used in the rendering of output service. Both these conditions were admittedly satisfied by M/s BSNL. The Hon ble CESTAT observing the above set aside the impugned order o lower authority and allowed appeal. I find that the decision is squarely applicable in the present case. In this case also the said assessee has fulfilled the two priary conditions of availing credit, one is that the input/capital goods/ input service is duty/ta paid and the second is that those have been used in rendering of the said output service. As such, there is no point in denying credit for procedural lapse. I am, therefore, of considered opinion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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