2016 (12) TMI 1468 - AT - Service Tax

Tribunal grants Cenvat Credit for cables; stresses verification process for input services credit.

M/s. Bharat Sanchar Nigam Ltd. Versus C.C.E. Indore

The Tribunal ruled in favor of the appellant, allowing them to avail Cenvat Credit on cables as either capital goods or inputs. The impugned order was set ... CENVAT credit - cable - input services - denial on the ground that the appellant has claimed Cenvat Credit on cables as capital goods which is not capital goods as per Rule 2A of Cenvat Credit Rules 2004 and the appellant has not produced documentary evidence to avail cenvat credit of input services as per Rule 9 of the Cenvat Credit 2004. Whether appellant is entitled to avail Cenvat Credit on capital goods which does not fall under Rule 2 A of Cenvat Credit Rules 2004 as input under rule 2 K of Cenvat Credit Rules 2004 or not? - Held that: - the cable has been procured by the appellant and used in providing output service. Therefore, appellant is entitled to avail cenvat credit on these cables either as capital goods or input as per cenvat credit rules 2004. - credit allowed. Whether matter can be remanded back for verification of the documents pertaining to input services credit availed by the appellant or not? - Held that: - As the appellant has produced the acknowledgment for submission of documents pertaining to input services before Ld Commissioner (A) and the same has not been considered by the Ld. Commissioner (A) while passing the impugned order. In that circumstances, the matter needs examination of the documents produced by the appellant - matter on remand. Appeal allowed by way of remand. Issues:1. Entitlement to avail Cenvat Credit on capital goods not falling under Rule 2A of Cenvat Credit Rules 2004 as input under Rule 2K.2. Remand for verification of documents related to input services credit.Analysis:Issue 1:The appellant contested the denial of Cenvat Credit on cables and input services in the impugned order. The appellant argued that although cables were not classified as capital goods under Rule 2A of the Cenvat Credit Rules 2004, they could be treated as inputs under Rule 2K. The consultant cited a previous Tribunal ruling (CCE Jaipur Vs J K Synthetics Ltd.) to support this argument. The Revenue opposed, stating that since cables were claimed as capital goods and did not meet the Rule 2A definition, the appellant was not entitled to the credit. However, the Tribunal found that the appellant, having used the cables in providing output services, was indeed eligible for Cenvat Credit on the cables, whether as capital goods or inputs, in line with the J K Synthetics Ltd. case.Issue 2:Regarding the verification of documents related to input services credit, the appellant contended that although they had submitted documentary evidence, it was not considered by the Ld. Commissioner (A) when passing the impugned order. The Tribunal agreed that the documents needed examination and remanded the matter back to the adjudicating authority for verification. The appellant was instructed to provide copies of the documents at the hearing, failing which the authority could assume the lack of necessary documentation for availing Cenvat Credit on input services.In conclusion, the Tribunal ruled in favor of the appellant on Issue 1, allowing them to avail Cenvat Credit on cables as either capital goods or inputs. On Issue 2, the impugned order was set aside for further examination of the input services credit documents, emphasizing the importance of proper verification before passing a final order.