Export Unit wins cenvat credit appeal for 'Gherkins' export, banking certificate crucial

The Tribunal partially allowed the appeal of a 100% Export Oriented Unit involved in the manufacture and export of "Gherkins" regarding availing cenvat credit on input services. The original order disallowing credits and imposing penalties was modified to allow credit based on a certificate issued by a banking company, recognizing challenges faced by such entities in invoicing. The appellant was granted relief by the Tribunal, upholding most demands but allowing credit based on the banking company's certificate, ultimately partly allowing the appeal.

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Issues:
- Availing of cenvat credit on various input services
- Alleged ineligible credits during a specific period
- Disallowance and recovery of wrongly taken credits
- Imposition of penalty under Rule 15 (1) of CCR 2004
- Appeal against the order of the adjudicating authority
- Interpretation of law regarding invoicing for banking companies
- Applicability of Notfn No.30/2004-ST
- Modification of the original order by the Commissioner (Appeals)
- Final decision and relief granted by the Tribunal

Analysis:
The appellant, a 100% Export Oriented Unit engaged in the manufacture and export of "Gherkins," availed cenvat credit of service tax paid on various input services. The department alleged that during April 2012 to June 2012, the appellant had availed ineligible cenvat credits amounting to Rs. 1,17,127. A show cause notice was issued proposing disallowance and recovery of these credits, along with interest and penalty under Rule 15 (1) of CCR 2004. The Asst. Commissioner of Central Excise disallowed credit of Rs. 1,20,655, ordered recovery, and imposed a penalty. The appellant appealed before the Commissioner (Appeals), who modified the original order, allowing credit of Rs. 3528 and reducing interest and penalty.

During the appeal before the Tribunal, it was argued that banking companies face challenges in providing invoices for charges levied. Notfn No.30/2004-ST allowed banking companies to issue documents containing necessary information, even if not serially numbered or containing the address of the recipient. The appellant had availed credit based on a certificate issued by the bank amounting to Rs. 1,03,939. The Tribunal upheld most of the demands but modified the order to allow credit based on the banking company's certificate. The appellant did not press for the demand of Rs. 748. The Tribunal partly allowed the appeal, modifying the impugned order accordingly.

In conclusion, the Tribunal recognized the challenges faced by banking companies in invoicing and allowed credit based on the certificate issued by the bank. The original order was modified to grant relief to the appellant, upholding most demands but allowing credit based on the banking company's certificate. The appeal was partly allowed by the Tribunal.

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