Tribunal allows appeal for separate CENVAT credit roles, overturns denial based on common ownership.

The Tribunal allowed the appeal, ruling in favor of the appellant. It held that the appellant's distinct roles as a manufacturer and service provider, with separate registrations, justified availing CENVAT credit for manufacturing and not for service provision. The denial of credit based on common ownership was deemed unjustified, emphasizing the separate legal frameworks governing the two roles. The impugned order was set aside, granting consequential relief to the appellants in all three appeals.

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Issues:
1. Availing CENVAT credit on duty paid on inputs for manufacturing MS Pipes.
2. Payment of service tax under composition scheme for works contract services.
3. Interpretation of Rule 3 of Works contract (Composition Scheme for payment of Service Tax) Rules 2007.
4. Dispute regarding availing CENVAT credit for service provider wing.
5. Denial of CENVAT credit by Revenue due to common ownership of manufacturing and service providing units.

Analysis:
1. The appellant, engaged in manufacturing MS Pipes, availed CENVAT credit on duty paid on inputs procured for pipe manufacturing. They cleared pipes on payment of excise duty and reversed credit for exempted pipes used in Govt projects.
2. The appellant, also a service provider for works contracts, opted for composition schemes for service tax payment. They did not avail CENVAT credit for service provision.
3. Dispute arose on Rule 3 of Works contract Rules 2007, requiring payment as per composition scheme without availing CENVAT credit on inputs for works contract services.
4. Revenue contended that common ownership of manufacturing and service units disallowed CENVAT credit for service provider wing. Show cause notice issued for irregularly availed credit.
5. Adjudicating authority held both wings as one entity, disallowing CENVAT credit for service provision. Appellant argued separate roles and non-contravention of laws.

Judgment:
The Tribunal noted the appellant's distinct roles as a manufacturer and service provider, each with separate registrations. Appellant availed CENVAT credit for manufacturing and did not for service provision, complying with Rule 3(2). The denial of credit was unjustified as both roles were legally distinct. Revenue's objection based on common ownership was unfounded. The Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellants in all three appeals. The judgment emphasized the separate legal frameworks governing manufacturing and service provision, rejecting the Revenue's contention of mixing the two roles.

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