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2023 (8) TMI 117
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....ory premises during the said month or even prior to the said month. Further from the detailed enquiry conducted by the Jurisdictional Range Superintendent with the respondent, statement dated 05.02.2015 of Shri Dipesh Pravinchandra Shah, General Manager (Production) of the respondent, and scrutiny of the documents submitted by them, it was observed that the respondent were availing Cenvat Credit on capital goods but no such „capital goods‟ were received by them in their Daman Factory; also that the input services in respect of which Cenvat Credit was availed and utilized by the respondent during the period from March 2014 to December 2014 did not have any nexus, directly or indirectly with the excisable goods manufactured by the respondent at their Daman unit. According to the respondent, they were engaged in the manufacturing of ATM, Colour Dispenser Machines, POS-Point of Sales Machine, Inkjet Engravers Machines and Cash Shorting Machines at their Daman plant for which they have used services such as GTA, Security Services, Telephone Bill, Housekeeping. Whereas, it appeared that respondent during the relevant period has also availed credit of services tax for the serv....
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....er the revenue filed the present appeal. 2. Shri Ajay Jain, Special Counsel, appearing on behalf of the revenue reiterated the grounds of appeal and submits that the Commissioner has erred in dropping the demands for recovery of Cenvat Credit. The main ground in which Cenvat Credit of „Capital Goods‟ & „Input Services‟ is proposed to be denied in both the SCNs is due to the admitted facts that such credit did not have any nexus directly or indirectly with the excisable goods being manufactured by the respondent at their factory at Daman. Therefore, the Ld. Commissioner has clearly erred in arriving at the finding that the account and records maintained are not questioned nor is the eligibility to credit availed, which is clearly contrary to the facts recorded in the impugned order. 2.1 He also submits that it is admitted by the respondent themselves, that they were engaged in manufacture and clearances of excisable goods at their Daman Plant for which the input services were GTA, Security Services, Telephone Bills, House Keeping services only. Whereas the input service credit availed by the respondent during the relevant period under dispute, were in r....
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....ned Commissioner has picked up an issue totally outside the purview of the charges/ allegations against the respondent and has travelled beyond the scope of show cause notice. The core-issue contained in both the show cause notice dated 19.03.2015 & 02.02.2016 was not of cross -utilization of Cenvat credit, but in respect of whether at all such input services & capital goods had any nexus in order to be qualified as admissible „input services‟ or „capital goods‟ entitling the respondent for such Cenvat credit. He also argued that the case laws relied upon by the Learned Commissioner in the impugned order are not squarely applicable to the facts of the present case. 2.6 He also submits that since the Centralized registration has been amended on 20.08.2015 by the appropriate authority of Daman Commissionerate, the Commissioner‟s finding holding such amendment to be effective from March, 2014 is clearly erroneous and not consistent with the procedure prescribed under Trade Notice No. 03/2011-12 ST Dated 01.10.2011. He prays that the appeal is maintainable on facts, merits, legality and be allowed in favour of revenue. 3. On other hand Shri Prakash S....
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.... the same place of business. On the contrary, the said circular envisages filing of returns under the two laws in different Jurisdictions. Thus, irrespective of the date on which the amendment to the centralized registration took effect, since the respondent was always registered under both service tax and excise provisions during the relevant period, the respondent was entitled to cross-utilize credit out of the common pool. 3.3 He further submits that Respondent is eligible to avail Cenvat Credit pertaining to the input services and capital goods used for providing the output services from the centralized service tax registration at the Daman Factory. Respondent is eligible to cross-utilize the said Cenvat Credit to discharge the Central Excise duty on manufactured goods. Input service and capital goods, in respect of which the Cenvat Credit was availed, were received by the respondent as provider of output services. There is no requirement that input services or capital goods used for providing output services are to be received within the factory premises of the respondent. From a bare perusal of Rule 3 (1) of Cenvat Credit Rules, 2004, it is manifest that an output service ....
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....ce. Both the show cause notices alleged that there was a lack of nexus between the relevant input services and capital goods qua the manufacture of goods. In response to the said show cause notices in its replies dated 11.05.2015 and 13.07.2017, the respondent submitted the since it was both a manufacturer under the central excise law and a service provider under service tax law, it was entitled to avail Cenvat credit on the input services and capital goods used for providing output services and utilize the credit accumulated in the common pool for payment of excise duty. Further it is pertinent to note that taking into account the submission made by the respondent, another letter/ notice was issued by the revenue dated 08.05.2018 asking the respondent for clarifications in respect of certain alleged discrepancies in the cross-utilization. The Learned Commissioner in the impugned Order-in-Original, has therefore recorded findings in respect of the issues of centralized registration and cross-utilization of credit in order to meet the submissions made by the respondent that the issue of nexus cannot be examined since Cenvat credit was cross-utilized. In the present matter show cause....
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....egistration of „Centralised Service Provider‟ should be considered from March 2014. The authorities have taken own time in grant of amendment of Centralized Registration from Mumbai to Daman for which Respondent cannot be made to suffer.It is to be noted that during the disputed period respondent-assessee is registered both as manufacturer as well as provider of output services. 4.1 Further, we find that the availment of Cenvat credit in respect of excise duty, service tax etc. and utilisation thereof has been provided in Rule 3 of Cenvat Credit Rules, 2004, which is reproduced below :- Rule 3. Cenvat Credit. - (1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit (hereinafter referred to as the Cenvat credit) of - (i) the duty of excise specified in the First Schedule to the Excise Tariff Act, leviable under the Excise Act; (ii) the duty of excise specified in the Second Schedule to the Excise Tariff Act, leviable under the Excise Act; (iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 ....
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.... is kind of common kitty into which credit of duty paid on inputs and capital goods and credit of service tax paid on input services can be taken. 4.2 Since the respondent is both a manufacturer and provider of output services from their Daman factory during the disputed period they are eligible for availment of Cenvat credit on input, capital goods and input services used for providing output services from the centralized service tax registration at the Daman factory and used for manufactured goods and for providing their output services. Further Cenvat being a beneficial piece of legislation, which was enacted for removing the cascading effect, the denial of credit citing procedural irregularities is unsustainable. 4.3 It has also been argued by the revenue in the present matter that service tax paid for services received and credit availed for services outside daman factory at ATM side would not be eligible for credit. In this context we find that it is a settled position that for availing the Cenvat credit the location from where the output service provided is not relevant. As long the service is provided by the service provider for which any input service is received and....
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....ferent. 2. The matter has been examined by the Board and it has been decided that while carrying out audit of Central Excise assessees, the Service Tax return filed by the assessee should also be scrutinized, in order to verify that Cenvat credit claimed in both the returns is same. Further, where both the returns are filed in the same Commissionerate, then audit of both the activities should be undertaken at the same time. If these returns are being filed separately (one with the Excise Commissionerate and the other with the Service Tax Commissionerate), then while undertaking Service Tax audit, the officer should verify the Excise returns also, for confirming correctness of credit. From the above Board‟s letter also it is clear that the availment and utilisation of Cenvat credit from common pool of Excise duty as well as Service Tax is permissible. 4.5 We also find that disputed issue is the present matter is already settled in favour of the respondent in various cases cited by the respondent. In those Judgments, it was decided the general principles in respect of availment and utilisation of credit. We also find that Apex Court in the case of Ramesh Foods Lt....
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....ssioner (AR), on the other hand, vehemently argued that it is absolutely necessary to have segregated account in respect of input and input services relating to manufactured goods, as also input and input services used in relation to providing the output services. The learned AR's argument was that the Service Tax is collected under the Finance Act, 1994, while Central Excise Duty is collected under the Central Excise Act, 1944 and that two Acts operates in their respective domains, lay down authority for availment or utilization within their respective domains and there is nothing in law to permit cross operation of such accounts for utilization of such credit beyond the respective laws. The learned AR also argued that the appellant is registered separately for the manufacturing activity and as a provider of output service and there are separate authorities for the two. Each authority in assessment stage is entitled to examine the admissibility of each of the Cenvat credit entry in the context of registered activity under its domain, jurisdiction and competence. In the absence of segregated account, the authority shall be at loss to examine the issue to its conclusive state. He al....
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....se restrictions do not cover cross utilization of credit of Excise and Service Tax, as a general proposition. 6. We have also gone through the various case laws quoted by the learned Counsel for the appellant and we note that in the case of CCE, Pune v. Lakshmi Technology and Engineering Industries Ltd. (supra) in para 6 has observed as under : 6. I have carefully considered the submissions from both sides and perused the records. Rule 3(1) of the Cenvat Credit Rules permits credit to a manufacturer of final product or a service provider of taxable service. If a person manufactures only excisable goods, he is entitled to take credit of not only Excise Duties paid on capital goods and inputs but also additional duty of Customs paid under the Customs Tariff Act in respect of imported inputs and capital goods and also Service Tax paid on the input services utilized in or in relation to the manufacture of the excisable goods. In other words, a manufacturer of excisable goods is entitled to use the credit from a common pool to which different categories of specified Excise Duties, Customs Duty and Service Tax are allowed to be taken as credit. Similarly, a provider of ....
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....careful analysis of the said format, the intention appears to be to permit cross utilization of the credit of Excise Duty and Service Tax. 8. In view of above analysis the appeal is allowed." (b) The above judgment of the Hon‟ble High Court was passed in the matter of Tribunals order reported as S.S engineer 2015 (317) ELT 597 wherein Tribunal has passed following order: "5. We have considered the rival submissions. We have gone through the Cenvat Credit Rules. We find that Rule 2 defines input, input services, capital goods etc. Before availing Cenvat credit, a manufacturer or service provider has to satisfy the definitions provided under the said Rules. Rule 3(1) of the Cenvat Credit Rules states that a manufacturer or producer of final products or provider of taxable service shall be allowed to take credit of various duties specified in various sub-clauses therein. The specified duties among various duties include duty of excise specified in the First Schedule to the Excise Tariff leviable under the Excise Act as also Service Tax leviable under different Sections of the Finance Act, 1994. Sub-rule (4) of Rule 3 provides that Cenvat credit may be utiliz....
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....unts one in respect of credit attributable to inputs, capital goods and services meant for excisable goods and credit attributable to capital goods, inputs and services attributable to the service provided by them. Common Cenvat Credit Rules have been framed in terms of powers conferred by Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. Rule 3(1) enables a 'manufacturer' or a 'provider of taxable service' to take credit of specified duties and utilize them to discharge duty liability under Rule 3(4) of the Cenvat Credit Rules. A credit can be utilized for payment of any duty of Excise on any final product or for payment of Service Tax on any output service. The respondent is undisputedly registered as a service provider for providing the services of renting of immovable property. The credit taken by them as manufacturer/service provider has been used both for paying Excise Duty and for paying Service Tax. The rules permit taking of credit under a common pool and permit use of the credit from the common pool for different purposes and there is no restriction placed to the effect that credit accounts should be maintained for use for manufacture of ....
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....eparate accounts one in respect of credit attributable to inputs, capital goods and services meant for excisable goods and credit attributable to capital goods, inputs and services attributable to the service provided by them. Common CENVAT Credit Rules have been framed in terms of powers conferred by Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. Rule 3(1) enables a 'manufacturer' or a provider of taxable service' to take credit of specified duties and utilize them to discharge duty liability under Rule 3(4) of the CENVAT Credit Rules. A credit can be utilized for payment of any duty of excise on any final product or for payment of service tax on any output service. The respondent is undisputedly registered as a service provider for providing the services of renting of immovable property. The credit taken by them as manufacturer service provider has been used both for paying excise duty and for paying service tax. The rules permit taking of credit under a common pool and permit use of the credit from the common pool for different purposes, and there is no restriction placed to the effect that credit accounts should be maintained for use for man....