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of <h1>Tribunal Rules Credit Reversal Demand Unjustified</h1> <h3>M/s. Hindustan Petroleum Corporation Ltd. Versus Commissioner of GST & Central Excise, Chennai</h3> M/s. Hindustan Petroleum Corporation Ltd. Versus Commissioner of GST & Central Excise, Chennai - TMI Issues:Dispute over CENVAT credit on input services used for trading activity at Chennai factory.Analysis:The appellants, engaged in lube oil manufacturing, faced a dispute regarding CENVAT credit on input services at their Chennai factory, also registered as a depot. The issue revolved around whether the trading activity at the Chennai premises necessitated reversal of the credit under Rule 6(3) of CENVAT Credit Rules, 2004.The consultant for the appellant argued that the Chennai premises acted as a depot for storage and distribution, not engaging in trading. Referring to Rule 2(l) of CENVAT Credit Rules, it was highlighted that input services are meant for the manufacture and clearance of final products up to the place of removal, which includes the Chennai plant. The appellant did not conduct any trading at the depot.The appellant drew attention to a previous Order-in-Appeal where it was held that no credit reversal was required as no sales took place at the depot. Citing the principle that an order attains finality when not appealed against, the appellant contended that the department could not alter its stance.The department contended that trading occurred at the factory premises, necessitating credit reversal for input services. However, the Commissioner (Appeals) had previously ruled that the depot did not engage in trading activities, serving only as a place of removal for manufactured goods from various units.The Tribunal, after considering the arguments and previous rulings, concluded that the demand for credit reversal was unjustified. The impugned orders were set aside, and the appeals were allowed, providing consequential reliefs as per law. The decision highlighted that the Chennai depot did not engage in trading activities, affirming the appellant's position and rejecting the department's claim.
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