2017 (12) TMI 833 - AT - Central Excise

Tribunal allows CENVAT credit for input services post-01/04/2008

M/s. Hi-Build Coating (P) Ltd. Versus CCE (Appeals), Cochin And (Vice-Versa)

The Tribunal ruled in favor of the assessee, allowing CENVAT credit on input services, including those related to C&F agent services post-01/04/2008. ... CENVAT credit - whether the appellant is eligible to avail the credit of services tax paid by their consignment agent viz. clearance and forwarding agent? - Held that: - the Commissioner(Appeals) has given the finding that appellant has sold their goods through the C&F agents and are eligible as per Rule 2(l) of CCR. Hence the services of C&F fall under the category of C&F, the assessee is entitled for credit of service tax paid on the commission given to the consignment agents - from 01/04/2008, the assessee is not entitled to avail service tax paid on outward transportation, this amendment has no effect so far as the services of C&F agents are concerned and when their services are accepted as input service prior to 01/04/2008, the same services will continue to be input services even after 01/04/2008 - CENVAT credit on input services in respect of which tax paid on C&F agent services even after 01/04/2008 allowed - appeal allowed - decided in favor of appellant. Issues:1. Eligibility of CENVAT credit on input services taken from 01/04/2008.2. Demand confirmed on AMC charges and steel racks.3. Penalty under Section 11AC of the Central Excise Act.Analysis:1. The assessee filed appeals against an order that disallowed CENVAT credit on input service taken from 01/04/2008 related to tax paid on C&F agent services. The Commissioner(Appeals) confirmed the demand but set aside the demand on AMC charges and steel racks. The Department also appealed against setting aside these demands. The Tribunal disposed of all appeals through a common order.2. The assessee, engaged in manufacturing paints and varnishes, appointed consignment selling agents for marketing products. The Department alleged wrongful CENVAT credit claiming the services by consignment agents post goods removal were not eligible after 01/04/2008. The Tribunal noted that consignment agents' services fell under input services as per Rule 2(l) of CCR, entitling the assessee to credit post-amendment. The Tribunal upheld the credit on AMC charges and steel racks, dismissing the Department's appeal.3. The assessee argued that the impugned order was unsustainable, citing lack of evidence for fraud or suppression justifying the demands. The Tribunal agreed, setting aside the penalty under Section 11AC. The Department contended that penalties should have been imposed for non-disclosure. However, the Tribunal found in favor of the assessee, allowing CENVAT credit on input services, including C&F agent services post-01/04/2008. The assessee's appeals were allowed, while the Revenue's appeal was dismissed.Conclusion:The Tribunal ruled in favor of the assessee, allowing CENVAT credit on input services, including those related to C&F agent services post-01/04/2008. The demands were set aside, penalties were dismissed, and the appeals were disposed of accordingly.