2015 (10) TMI 883 - AT - Central Excise

Tribunal clarifies CENVAT credit rules, stresses service utilization proof

The Tribunal upheld its original decision, clarifying that there was no contradiction in allowing CENVAT credit and remanding for verification of input ... Rectification of mistake - CENVAT Credit - Held that:- As regards the CENVAT credit availed on the basis of certificates of service providers, the ld. Counsel has shown us letter dt. 13.11.2009 submitted in reply to the show cause notice dt. 19.10.2007. It clearly indicates that the letters obtained from the service providers were submitted under the said letter dt. 13.01.2009. Further, this letter is shown received by Shri S.N.Bhagwat, Inspector of Central Excise (Adjudication), Thane-I, Commissionerate. Therefore, it appears that the Commissioner has filed this ROM without caring to see his own records. Reasons such as date of issue of certificate not being mentioned cannot be a reason to deny the substantial benefit. It was for the authorities to verify whether the services were received and actually utilized. - Certificates having been produced earlier, there is no ground to deny the CENVAT credit which was sought to be availed on the basis of these certificates. - Rectification denied. Issues:1. Alleged contradiction in the findings of the CESTAT regarding remand and allowance of CENVAT credit.2. Verification of certificates from service providers for availing CENVAT credit.Analysis:Issue 1:The Revenue filed a ROM application citing an apparent error in the Tribunal's order, claiming a contradiction in the findings. The Tribunal clarified that there was no contradiction in their order. They stated that the order allowed CENVAT credit in principle and was remanded only for verification by the adjudicating authority to ensure that the input services for which credit was availed were actually received and utilized. The Tribunal found no basis for the alleged contradiction and upheld their original decision.Issue 2:Regarding the CENVAT credit availed based on certificates from service providers, the Tribunal examined a letter submitted in response to a show cause notice, indicating that the letters from service providers were submitted earlier. The Tribunal noted that the Commissioner had overlooked this evidence and failed to verify whether the services were actually received and utilized. The Tribunal emphasized that the lack of specific details like the date of issue on certificates should not be a reason to deny the CENVAT credit. They highlighted that the certificates had been produced earlier, and there was no justification to reject the credit based on these certificates.In conclusion, the Tribunal rejected the ROM application, emphasizing that the matter was remanded for verifying the actual use of input services. They found no valid grounds to deny the CENVAT credit, especially considering the certificates had been previously submitted. The Tribunal's decision reaffirmed the importance of verifying the utilization of services for claiming CENVAT credit and dismissed the Revenue's appeal.