Tribunal allows cenvat credit for factory services, remands for correct calculation.

The Tribunal found in favor of the appellant, ruling that the denied cenvat credit on various services at the factory level was indeed eligible for both the appellant and the Input Service Distributor (ISD). The Tribunal set aside the denial of credit and directed the calculation of cenvat credit according to Rule 7(d) of the Cenvat Credit Rules, 2004. The matter was remanded for the specific purpose of determining the correct credit amount.

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Issues:
Denial of cenvat credit on various services at the factory level.

Analysis:
The appeal challenged the denial of cenvat credit to the appellant concerning several services at the factory level. The appellant's Head Office, registered as an Input Service Distributor (ISD), distributed cenvat credit to the Bhiwadi Unit. The lower authority contended that the credit was ineligible, leading to a show cause notice, confirmation of demand, and imposition of penalty. The appellant argued that no show cause notice was issued to the ISD, rendering the notice to the appellant incorrect. The appellant cited relevant case law to support their position on the relocation of cenvat credit and the eligibility of the denied services. The Revenue argued that the show cause notice was correctly issued to the appellant for the cenvat credit distribution.

The Tribunal found that the jurisdictional issue raised by the appellant was baseless as the dispute was solely about the eligibility of cenvat credit at the factory level, not the ISD level. After considering both sides, the Tribunal concluded that the services for which cenvat credit was denied were indeed eligible for availing cenvat credit, both by the appellant and the ISD, based on the case law presented. Therefore, the Tribunal set aside the finding that the appellant was not eligible for cenvat credit on those services. However, the Tribunal directed that the cenvat credit to be availed at the Bhiwadi factory should be calculated according to Rule 7(d) of the Cenvat Credit Rules, 2004. The matter was remanded back for the limited purpose of determining the correct cenvat credit that could be availed by the appellant under the specified rule and to inform the appellant accordingly. Consequently, the appeal was disposed of in line with the Tribunal's decision.

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