2022 (8) TMI 980 - AT - Central Excise

Appeal partially allowed, demands set aside on Cenvat Credit denial. Emphasis on proving receipt & usage. Remanded for further examination.

TOYO INK INDIA PRIVATE LIMITED Versus C.C.E. & S.T. -VADODARA-II

The appeal was partly allowed with demands set aside for various issues regarding denial of Cenvat Credit on different heads. The tribunal emphasized the ... CENVAT Credit - duty paying documents - credit on services has been denied as the appellant failed to produce original invoices or original bills of entry - photocopies of documents produced - admissible evidences or not - invocation of Rule 9 of the Cenvat Credit Rule - HELD THAT:- Rule 9 requires the appellant to maintain records of receipt and use of goods. The Rule also requires the appellant to produce the original invoice/ bill of entry. The appellant has failed to produce the bill of entry and invoices. The failure to produce original invoice or bill of entry is a procedural lapse if the appellant is able to establish that the goods are actual received and used in the factory for the purpose of manufacture of finished goods - the demand on this count is set aside and matter is remanded to original adjudicating authority to decide afresh after examining the records produced by the appellant to establish that the goods were actually received and used in the factory for the manufacture of finished goods. CENVAT Credit - furniture procured form the quality control laboratory in the factory premises - Circular No. 943/04/2011-CX dated 29.04.2011 - HELD THAT:- The quality control is an integral part of the manufacture of goods and the furniture used in quality control lab is just like any other furniture used in factory premises and credit on same cannot be denied. The CBEC Circular cited by the appellant also supports this view - the credit under this head is allowed and demand under this head is set aside. CENVAT Credit - GTA Services - appellant availed the GTA Services for transport of goods from factory premises to the premises of buyers - HELD THAT:- The learned counsel showed some invoices, however, from the same it was not apparent if the sale value includes the cost of transportation and if sale are FOR destination. To verify this claim of the appellant that the sales made by them are FOR destination and the GTA credit pertains to the outward transportation of their sales, the matter is remanded to the original adjudicating authority. Service tax credit - outdoor catering service availed by the appellant - HELD THAT:- The said service is clearly an admissible service and therefore, credit on same has to be allowed - reliance placed in the case of M/S HINDUSTAN COCACOLA BEVERAGES PVT. LTD. VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, BBSR [2019 (9) TMI 747 - CESTAT KOLKATA], where it was held that The appellant is entitled to avail Cenvat credit on outdoor catering. CENVAT Credit - rent-a-cab service availed by the appellant for movement of their employees from their residences to the factory premises and for movement of the sales and purchase teams for their official work - denial of credit on the ground of exclusion clause (B) of Rule 2(l) of Cenvat Credit Rules - HELD THAT:- Reliance placed in the case of M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [2016 (11) TMI 1126 - CESTAT NEW DELHI] where it was held that the appellant would be entitled to the Cenvat Credit on service tax paid on the said services - credit allowed. Service tax credit - maintenance of cars which were hired by the appellant for the purpose of transportation of their employees - credit sought to be denied relying on exclusion clause (BA) of Rule 2(l) of Cenvat Credit Rules - HELD THAT:- The decision of Tribunal in the case of M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [2016 (11) TMI 1126 - CESTAT NEW DELHI] is equally applicable to the instant case where it was held that the appellant would be entitled to the Cenvat Credit on service tax paid on the said services, and therefore, credit under this head cannot be denied - The demand on this count is also set aside and appeal on this count is allowed. CENVAT Credit - Hotel Accommodation Services - HELD THAT:- No specific reason has been given in the impugned order for denial of this credit - the accommodation for visiting employees as well as consultants is a necessary requirement for the purpose of manufacture and sale of goods. In these circumstances, the credit of the hotel accommodation services used for purpose of official movement of consultants, technicians and employees is admissible as input service. The demand on this count is also set aside. The matter is remanded to original adjudicating authority - appeal allowed in part and part matter on remand. Issues:1. Denial of Cenvat Credit on various heads.2. Admissibility of credit on furniture from quality control laboratory.3. Cenvat credit availed on GTA services.4. Service tax credit on outdoor catering service.5. Cenvat credit on rent-a-cab service.6. Service tax credit on maintenance of cars.7. Cenvat credit on hotel accommodation services.Analysis:Issue 1: Denial of Cenvat CreditThe appellant filed an appeal against the denial of Cenvat Credit on several heads due to the failure to produce original invoices or bills of entry. The appellant argued that they provided photocopies and the usage of goods in manufacturing was undisputed. The tribunal found that while Rule 9 of the Cenvat Credit Rules requires the production of original invoices, a procedural lapse can be overlooked if the appellant can prove actual receipt and usage of goods. The matter was remanded for further examination.Issue 2: Admissibility of credit on furniture from quality control laboratoryThe appellant claimed credit on furniture used in the quality control lab, citing a circular supporting their position. The tribunal agreed that quality control is integral to manufacturing, and furniture in the lab is akin to any other factory furniture. Therefore, the credit was allowed, and the demand set aside.Issue 3: Cenvat credit availed on GTA servicesThe appellant availed GTA services for transporting goods to buyers, claiming the sales were FOR destination. However, verification was needed to confirm this claim. The tribunal remanded the matter to ascertain if the sales were indeed FOR destination, and if so, the credit would be allowed.Issue 4: Service tax credit on outdoor catering serviceThe appellant used outdoor catering for canteen facilities, which was deemed an admissible service. Therefore, the credit on outdoor catering service was allowed.Issue 5: Cenvat credit on rent-a-cab serviceThe denial of credit on rent-a-cab service was challenged, citing a tribunal decision that clarified the interpretation of the exclusion clause. Relying on this decision, the appeal was allowed on this count.Issue 6: Service tax credit on maintenance of carsThe appellant sought credit for maintenance of cars used for employee transportation. The tribunal found the exclusion clause inapplicable based on a previous decision, setting aside the demand and allowing the appeal.Issue 7: Cenvat credit on hotel accommodation servicesThe appellant claimed credit for hotel accommodation services used for business purposes. The tribunal agreed that such services were necessary for business activities, allowing the credit and setting aside the demand.The appeal was partly allowed, with demands set aside for certain issues and remanded to the original adjudicating authority for further examination.