2016 (12) TMI 1715 - AT - Service Tax

Appeal Granted: Cenvat Credit for Manpower Services Upheld

The Tribunal allowed the appeal, affirming the availability of Cenvat credit for service tax paid on manpower services used by the job workers and ... CENVAT credit - manpower services availed by job workers - Held that: - though for the purpose of excise law the units are registered separately, the manpower agency service availed by the appellant suffering service tax was attributed to the use thereof in manufacture by unit-2 - credit cannot be denied - appeal allowed - decided in favor of appellant. Issues:1. Availability of Cenvat credit for service tax paid on manpower services used by job workers.2. Recognition of separate units for availing Cenvat credit on service tax paid for manpower services.3. Opposition by Revenue on allowing Cenvat credit.Analysis:1. The appellant contended that as a principal manufacturer, it engaged two job workers, Unit 3 & 4, and availed the service of a manpower agency for manufacturing final goods. The appellant argued that Cenvat credit should be granted for service tax paid on manpower services used by the job workers. The Tribunal noted that there was no evidence from Revenue to disprove the utilization of services for manufacturing dutiable goods by Unit 3 & 4. Consequently, the Tribunal allowed the appeal, affirming the availability of Cenvat credit for service tax paid on manpower services used by the job workers.2. Additionally, the appellant mentioned that Unit-2, although a separate entity in excise law, also engaged manpower services. The appellant argued that since there was no discrepancy found by Revenue regarding Cenvat credit availed by Unit-2 for the same services, Cenvat credit should be allowed. The Tribunal agreed, stating that the service tax paid for manpower agency services used by Unit-2 was attributable to its manufacturing activities. As there was no adverse finding by the lower authorities, the Tribunal held that Cenvat credit for service tax paid on manpower services by the appellant's separate units should not be denied.3. The Revenue opposed the contentions put forth by the appellant. However, the Tribunal observed that the Revenue failed to provide any evidence or rebut the submissions made by the appellant. Since there was no contradictory finding by the authorities below, the Tribunal ruled in favor of the appellant, allowing the appeal and granting Cenvat credit for the service tax paid on the manpower services availed by the appellant's units. The Tribunal emphasized that the denial of Cenvat credit was unwarranted in this case due to the lack of evidence supporting Revenue's opposition.In conclusion, the Tribunal allowed the appeal, emphasizing the availability of Cenvat credit for service tax paid on manpower services utilized by the job workers and separate units of the appellant. The decision highlighted the importance of substantiating opposition with evidence and ensuring that denial of Cenvat credit is based on valid grounds supported by the law.