2023 (8) TMI 1314 - AT - Central Excise

Tribunal grants Cenvat credit for specific services, exempts post-2011 Belt Jointing Services. Penalties overturned.

The Tribunal allowed Cenvat credit for Way Bill generation, H.O. Rent, H.O. Car Parking, H.O. other Services, and Pre-2011 Belt Jointing Services. ... CENVAT Credit - input services - nexus with the manufacture goods - Way Bill Generation - Belt Jointing Services - H.O. Rent - H.O. Car Parking - H.O. other Services - penalty u/s 11AC of CEA. Belt Jointing Services - HELD THAT:- Admittedly the Appellant has cleared the Conveyer Belts in CKD and the same is installed at the premise of the buyer - the Appellant has cleared the goods to the buyer in CKD from the factory premises, “the place of removal” in this case would be that of the Appellant’s factory only. Therefore, the Belt Joining Services used by the Appellant at the buyers’ end, would not be an eligible service for taking Cenvat credit. The provision that the Cenvat credit would be eligible only “up to the place of removal” has come into effect from 01.04.2011. Therefore, in this case if any of the demand is on account of input services towards Belt Joining Services were received prior to 01.04.2011, they would be eligible for the Cenvat credit. This fact is required to be verified by the Adjudicating Authority and should be allowed by him in such cases. Way Bill Generation - H.O Rent - H.O Car Parking - H.O other Services - HELD THAT:- The input services used are essential for carrying out the business activities of the Appellant. Therefore, they are eligible for the Cenvat credit only. The appeal to this extent is allowed. Thus, no case of suppression has been made out by the Department. Further, it is seen that in respect of four out of the five services, it has been held that the Appellant is eligible for Cenvat credit. Even in the case of Belt Jointing Services, the amendment came into effect only from 01.04.2011 only. Therefore, the penalty imposed under Section 11AC is not called for and the same is set aside. Appeal disposed off. Issues:The case involves the eligibility of Cenvat credit for input services used by a manufacturer of conveyor belts under chapter 40 of the CET during the period of June 2011 to August 2011. The Department issued a show cause notice challenging the utilization of input services in relation to the manufacture of goods.Way Bill Generation:The appellant argued that the service provider generating documents for the entry of inputs in West Bengal is essential for procurement and falls within the scope of Rule 2(l) of Cenvat Credit Rules 2004.Belt Jointing Services:The appellant contended that belt jointing services for installing conveyor belts at customer premises are crucial for completing the sale of finished goods, making them eligible for Cenvat credit.H.O. Rent:Rent paid for the Head Office premises, where essential business activities are conducted, was claimed as eligible for Cenvat credit as it is necessary for the Appellant's business operations.H.O. Car Parking:The rental of car parking space for officials working at the Head Office was argued to be part of the business activities and thus eligible for Cenvat credit.H.O. Other Services:Various services at the Head Office like water supply, lift service, generator, and security services were deemed essential for business operations, making them eligible for Cenvat credit.Belt Jointing Services Eligibility:The Tribunal found that belt jointing services used at the buyer's end were not eligible for Cenvat credit as the 'place of removal' was determined to be the factory premises, not the buyer's location.Verification of Pre-2011 Services:For services received before 01.04.2011, a verification was ordered to determine their eligibility for Cenvat credit.Penalty Consideration:No suppression was found on the part of the Appellant, and penalties imposed under Section 11AC were set aside as the Appellant was deemed eligible for Cenvat credit for most services.Summary of Disposition:- Way Bill generation, H.O. Rent, H.O. Car Parking, and H.O. other Services were allowed for Cenvat credit.- Pre-2011 Belt Jointing Services were deemed eligible for credit.- Post-2011 Belt Jointing Services were not eligible for credit.- Penalties under Section 11AC were set aside.The appeal was disposed of accordingly.