2015 (12) TMI 221 - AT - Central Excise

Appeals Granted: Input Service Credit Upheld for Manufacturing Business

The tribunal allowed the appeals, setting aside the order denying input service credit to the appellants. It held that the denial of Cenvat Credit on ... Denial of CENVAT Credit - Bill of Entry is not in the name of the appellant - services do not qualify as input service as per Rule 2 (l) of the Cenvat Credit Rules - Held that:- payment towards the said capital goods have been paid by the appellant only and the capital goods is physically available in the premises of the appellant. Therefore, merely wrong mention of the name in the Bill of Entry Cenvat Credit cannot be denied to the appellant Various input services i.e. Business Chamber Association Services, Horticulture Services, after Sale Services (commission paid to the services), Outward Goods Transportation Agency Services are the services in the nature of the services availed by the appellant in the course of business of manufacturing - Credit allowed. Cenvat Credit on outward goods transportation agency services - Claim of the appellant that the goods have been sold on FOR basis is correct. Therefore, Cenvat Credit on outward transportation services is entitled to the appellant. - appellant has taken Cenvat Credit correctly. Therefore, impugned demands i.e. duty and interest are not sustainable - Decided in favour of assessee. Issues:- Denial of input service credit- Incorrect mentioning of unit in Bill of Entry- Services not qualifying as input services- Denial of Cenvat Credit on various services- Claim of selling goods on FOR basisAnalysis:Denial of input service credit:The appellants appealed against an order denying them input service credit, resulting in a duty demand, interest, and penalties. The main contention was the denial of Cenvat Credit on capital goods due to a wrong mention of a sister unit in the Bill of Entry. Additionally, input service credit for various services was also sought to be denied.Incorrect mentioning of unit in Bill of Entry:The appellant company had two units, one being a 100% EOU and the other a DTA unit. The denial of Cenvat Credit on capital goods was based on the incorrect mention of the 100% EOU in the Bill of Entry, even though the goods were imported by the DTA unit. The tribunal held that the credit cannot be denied solely based on the wrong mention of the unit in the Bill of Entry.Services not qualifying as input services:Various services including Business Chamber Association Services, Horticulture Services, After Sale Services, and Outward Goods Transportation Agency Services were also under scrutiny for not qualifying as input services. The appellant argued that these services were indeed used in the manufacturing business and relied on a High Court decision to support their claim.Denial of Cenvat Credit on various services:The tribunal considered the nature of the services availed by the appellant and found that they were indeed used in the course of the manufacturing business. Cenvat Credit was allowed on these services based on the appellant's submissions and supporting evidence.Claim of selling goods on FOR basis:Regarding the claim of selling goods on FOR basis and the denial of Cenvat Credit on outward transportation services, the tribunal found in favor of the appellant. The appellant provided evidence and submissions supporting their claim, and the tribunal held that the credit on outward transportation services was entitled to the appellant.In conclusion, the tribunal set aside the impugned order, allowing the appeals and granting relief to the appellant by holding that they had correctly availed Cenvat Credit. The demands for duty and interest were deemed unsustainable, and penalties were not imposed.