Tribunal rules in favor of Appellant, allowing CENVAT credit for service tax paid.

The Tribunal ruled in favor of the Appellant, setting aside the Commissioner (Appeals)'s order on the demand of CENVAT Credit and penalty. The decision was based on the legal position that CENVAT credit of service tax paid by the service provider is available to the service recipient under Rule 3 of the Cenvat Credit Rules, 2004, irrespective of any exemption granted.

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Issues:
Appeal against demand of CENVAT Credit and penalty imposed due to irregular availment of credit under Notification No.8/2005-ST.

Analysis:
The appeal was filed against the orders passed by the Commissioner (Appeals) regarding the demand of CENVAT Credit and penalty imposed on the Appellant for irregular availment of credit. The Appellant, engaged in manufacturing excisable goods falling under Chapter 90 of Central Excise Tariff Act, 1985, had received processed goods from job workers who paid service tax. The Appellant availed credit of the service tax paid by the job workers. However, it was alleged that since the job worker was exempt from paying service tax under Notification No.8/2005-ST, the Appellant's availment of CENVAT Credit amounting to Rs. 4,40,000 was irregular. The Commissioner (Appeals) upheld the demand and penalty, leading to the present appeal.

The Appellant argued that the issue was settled by the Tribunal in previous cases such as CCE Mumbai-III Vs DIL Ltd and CCE Aurangabad Vs M/s Laxmi Metal Pressing Works Pvt Ltd. The Authorised Representative for the Revenue reiterated the findings of the Commissioner (Appeals). The Tribunal examined the issue in light of the mentioned cases, particularly the decision in Laxmi Metal Pressing Works Pvt Ltd case. It was observed that CENVAT credit of service tax paid by the service provider is available to the service recipient under Rule 3 of the Cenvat Credit Rules, 2004, regardless of any exemption granted. The Tribunal concluded that the impugned order lacked merit in light of the settled legal position and set it aside. The appeal was allowed with consequential relief, if any, as per law.

In conclusion, the Tribunal ruled in favor of the Appellant, setting aside the order of the Commissioner (Appeals) regarding the demand of CENVAT Credit and penalty imposed. The decision was based on the settled legal position that CENVAT credit of service tax paid by the service provider is available to the service recipient, as per Rule 3 of the Cenvat Credit Rules, 2004.

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