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2024 (9) TMI 110
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....various Man Power supply agencies for the purpose of supply of employees to these places which are other than their registered factory premises. They also availed house keeping services. 4. The appellant took Cenvat Credit of services tax paid on these services availed for supply of employees to a place other than registered factory premises and utilized the Credit for payment of excise duty on final products. 5. As per rule 2(l) of Cenvat Credit Rules, 2004 "Input Service" means " any service (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacture, whether directly or indirectly, in or in relation to manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating....
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....ieved by such order, the appellant is now before the Tribunal. 9. The Ld. Counsel Shri M. Karthikeyan appeared and argued for the appellant. It is submitted that M/s. Autotech Industries (I) Pvt. Ltd. (hereinafter referred to as 'the appellant'), is engaged in the manufacture of ICP Engines and parts of motor vehicles, and have their registered manufacturing premises at SP-114, SIDCO Industrial Estate, Ambattur, Chennai 600 058. The appellant have un-registered premises at B4, C4, F5, F7, H4 and 51-54 (Athipattu), which are in and around the registered premises. From the registered premises of the appellant, their semi-finished goods are removed to these un-registered premises for undertaking various further processes, such as turning, drilling, grinding, etc. and ultimately the final products are cleared to customers from the registered premises on payment of appropriate duty of excise. Hence, these premises could be treated as the appellant's own job working premises and such units are appellant's own units and not different entities. 9.1 In such job working premises, the appellant availed the services of various manpower supply contractors and house-keeping agencies and th....
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....d job working units and to deny Cenvat Credit of Rs.1,19,41,572/- taken during September 2014 which is beyond a period of 6 months from the date of invoice. The said credit of Rs.1,19,41,572/- includes an amount of Rs.1,06,09,387/- covered within the above demand of Rs.2,57,83,373/- and the balance of Rs.13,32,195/- relates to Cenvat Credit on input services received at registered premises. 9.6 Subsequently, another Statement of Demand bearing No. 32/2016 Dated 30.03.2016 has been issued to the appellant, proposing to demand cenvat credit of Rs.73,00,818 availed during March 2015 to February 2016, in respect of the manpower supply and house-keeping services availed in the job work premises, along with proposals for demand of interest and imposition of penalties. The appellant replied to the above notices, vide their replies dated 05.11.2015 and 25.04.2016, respectively. 9.7 After due process of law, the Commissioner of Central Excise, Chennai II passed the impugned common Order in Original bearing Nos. 66 & 67/2016 Dt. 30.05.2016 wherein he has held that the appellant is not entitled for cenvat credit in respect of the services consumed at the job working unit; he further hel....
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....¢ MRF Ltd. Vs. CCE - 2013 (31) STR 689 (Tri. - Chennai) • Murugappa Morgan Thermal Ceramics Ltd. Vs. CCE - 2016 (44) STR 111 (Tri. - Mad) • Tata Motors Ltd. vs. CCE, Jamshedpur - 2017 (50) STR 28 (Tri. - Cal) • Larsen & toubro Ltd. Vs. CCE, Mumbai - 2018 (15) GSTL 66 (Tri. - Bom.) • Fives Cail KCP Ltd. Vs. CCE, Chennai - I - 2018 (363) ELT 1082 (Tri. - Mad.) • Deepak Fertilizers And Petrochemicals Corporation - 2013 (4) TMI 44 - BOMBAY HIGH COURT • Ashok Leyland Ltd. - 2019 (1) TMI 430 - MADRAS HIGH COURT • India Pistons Ltd. - 2022 (11) TMI 42 - CESTAT CHENNAI • Dakshin Foundry Pvt. Ltd. - 2017 (5) TMI 137 - CESTAT BANGALORE 9.10 Availment of cenvat credit beyond six months from the date of the document: It is the appellant's case that the proposal to deny the credit availed in September 2014, on the ground that the credit was taken beyond six months from the date of invoice is not at all sustainable. Relying upon the decision of the Hon'ble Supreme Court in the case of Eicher Motors Ltd. VS UOI - 1999 (106) ELT 3 SC the appellant submits that the benefit of cenvat cr....
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....3 Interest and penalty: In as much as the demand itself is not sustainable, there is no occasion for demand of any interest or imposition of any penalty. Further, the appellant also wish to submit that none of the ingredients required for imposition of penalty under Section 11 AC of the Act are present in this case as explained above. In the absence of any malafide intention on the appellant's part, the imposition of various penalties are not sustainable. 9.14 Accordingly, the appellant prays before the Hon'ble Tribunal to set aside the impugned order with consequential relief, and allow these appeals. 10. The Ld. AR Shri M. Selvakumar appeared for the department. 10.1. The first issue is Credit availed on man power supply services and house-keeping services. The appellant has consumed the services in the job working premises and not in the registered premises of the appellant. The definition of input service under Rule 2(l) of CCR, 2004 was referred by the Ld. AR to argue that Input services means any service used by "Manufacturer". In the instant case, the input services were not received by the manufacture in his registered premises but were received and used in their u....
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....e limit for availing Cenvat Credit was limited to 6 months by notification No: 21/2014 dated 11.074.2014. Later this time was increased to 1 year from the date of invoice with effect from 01.03.2015. This means the Credit availed by the appellant on the basis of document prior to 01.09.2014 are not eligible. The Credit availed on invoice dated prior to 01.09.2014 has been correctly disallowed by the Adjudicating Authority. The appellant though reversed part of the Credit (Rs 1,19,41,572/-) had done so under protest. The Adjudicating Authority has therefore confirmed demand and ordered for vacation of the protest. It is submitted that the demand confirmed on this ground to the tune of Rs 2,57,83,373/- requires no interference. 14. The above infractions would not have to come to light but for the Audit conducted by the officers of the department. The appellant has suppressed facts with intend evade to payment of duty. The Show cause Notice issued invoking extended period is therefore legal and proper. The Ld. AR prayed that the appeal may be dismissed. 15. Heard both sides. 16. The first issue is the demand confirmed alleging that input service credit has been taken on servi....
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....it is to be stated that Cenvat Credit Rules does not say that credit has to availed only after obtaining registration of premises. The Hon'ble High Court of Karnataka in the case of m-Portal India Wireless Solutions (P) Ltd 2011 (9) TMI 450 Karnataka High Court has held that there is nothing in CCR, 2004 to restrict taking of credit on services without registration. In the case of CST, Chennai Vs Verizon Data Services India (P) Ltd 2013 (12) TMI 741 -- Cestat -- Chennai, it was held that by not getting registered, a person does not cease to be a service provider. On a simple reading of the definition of input service and Rule 3 of CCR, 2004 there is no precondition that credit can be availed only after taking registration. If there is violation of not taking registration, the issue has to be adjudicated as per provisions for taking registration. Denying the credit is not the proper course in such situations. 18. If the input services are used in or in relation to the manufacture of the final products the credit is eligible. In the present case, apart from the allegation that the Credit has been availed in their unregistered premises there is no whisper in the Show Cause Notice t....
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.... of final products, there is no such restriction imposed in the CCR in regard to Input Services. It is merely stated in the Rule that Input Services should be received by the manufacturer of the final products. The definition of the expression 'Input Services' covers services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products. If the Input Services have been received by the manufacturer in or in relation to the manufacture of final products the Credit would be admissible. The relevant paras of the judgment in the case of M/s. Deepak Fertilizers and Petrochemicals Corporation Ltd. reads as under:- "5. Now at the outset it must be noted that Rule 3(1) allows a manufacturer of final products to take credit inter alia of Service Tax which is paid on (i) any input or capital goods received in the factory of manufacturer of the final product; and (ii) any input service received by the manufacturer of the final product. The subordinate legislation in the present case makes a distinction between inputs or capital goods on the one hand and input services on the other. Clause (i) above provides that the Service Tax should....
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....ch runs contrary to the plain and literal meaning of the words used in Rule 2(l). Moreover as we have noted earlier, whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and Service Tax among others paid on any input or capital goods received in the factory of manufacturer of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product. This must be read with the broad and comprehensive meaning of the expression 'input service' in Rule 2(l).The input services in the present case were used by the appellant whether directly or indirectly, in or in relation to the manufacture of final products. The appellant, it is undisputed, manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process." 21. In the case of Tata Motors Limited Versus CCE Jamshedpur, 2017 (50) S.T.R 28 (Tri. -- Kolkata) the issue considered was similar. The assessee in the said case had availed services of some 3rd party processors, who process the raw materials sent to M/s. H.V Axles Limited and M/s. H.V. Transmission Limited, on behalf of th....
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....ver of the services rendered by the 3rd party job worker and the said services have been used directly or indirectly in or in relation to the manufacture of motor vehicles chassis. Hence, the appellants are entitled to credit of service tax paid on the input services. The definition of input services is very clear; that the receiver of service does not mean receiver of inputs. The Cenvat Credit Rules itself recognize the distinction between input and input services according to which it has been made mandatory to receive inputs in the factory of production to avail Cenvat credit on inputs. There is no condition to avail Cenvat credit on input services that services availed should be received by the service receiver/manufacturer in the registered premises. In the case on hand, the goods, on which services were provided, instead of coming to the appellants factory were dispatched to another job worker of the appellants, i.e., HVAL/HVTL. As already emphasized definition of input services does not specify that the services should be received in the factory of the manufacturer. The condition to avail Cenvat credit on input service is that it should be used in or in relation to the manuf....
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....ed on their behalf. There is also no allegation in the SCNs that the goods sent out directly from such job worker are not being sent out on behalf of appellants and not on behalf of job worker themselves. SCN in para-3 indicates that these goods have been supplied on the basis of contracts for supply of sugar machinery procured by them. For procuring such orders and also for other business activities, they have appointed a commission agent to whom they pay sales commission. They also availed other input service credits which are necessarily for their business/manufacturing activities like advertisement charges, audit fees, bank charges, etc. It cannot be then said that these goods manufactured by the job workers are not being done on behalf of the appellant. Rule 3 of Cenvat Credit Rules to which Ld. AR alluded, also clearly indicates, inter alia, that Service Tax credit in respect of services used in the manufacture of products by a job worker can also be availed. It is very common that part of the manufacture is given to the job worker on the basis of design and drawing supplied, as in this case. Job workers are not responsible for the marketing or sales of the goods, that has to....
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....e the factory to the joint ventures, vendors, grid etc., would be admissible for Cenvat credit, as it is cleared for a price. This question was answered against the assessee. However, the facts of the case on hand are totally different and therefore, the Revenue would not be justified in referring to the observations of the Hon'ble Supreme Court in the said judgment about the concept of generation of electricity, as we have to test the correctness of the impugned order on the given facts and circumstances of the case. 25. As already pointed out, there is no dispute that the electricity generated by the windmills are exclusively used in the manufacturing unit for final products, there is no nexus between the process of electricity generated and manufacture of final products and there is no necessity for the windmills to be situated in the place of manufacture. Further, as already noticed, the definition of "input service" is wider than the definition of "input". Furthermore, if one takes a look at the Rules, more particularly Rule 2(k), as it stood prior to 1-4-2011, which defines "input", the following has been specifically inserted. "within the factory of pro....
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....dered by the Hon'ble High Court of Delhi in the case of Global Ceramics Pvt. Ltd. reported in 2019 (5() TMI 1432 -- Delhi High Court. While analyzing the issue as to whether the Credit can be availed on Countervailing Duty (CVD) paid by the appellant for imports that took place prior to the amendment to Rule 4 (1) of Cenvat Credit Rules prescribing the time limit, the Hon'ble High Court held that the said provision cannot be made applicable retrospectively and that the importer would be eligible to avail Credit for the imports prior to the date of introducing the time limit. The relevant para reads as under:- "21. The Gujarat High Court in Filco Trade Centre Pvt. Ltd. v. Union of India (decision dated 5th September, 2018 in SCA No. 18433/2017) [2018 (17) G.S.T.L. 3 (Guj.)] followed the dictum of the Supreme Court in Jayam & Co. v. Assistant Commissioner (supra) and reiterated that the input tax credit could not be denied on the basis of an amendment, which is prospective. The question dealt with by the High Court was whether Section 140A(3)(iv) of the CGST Act, which declined the Cenvat credit in relation to goods purchased prior to one year from the appointed date, could ....
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....td Versus C.C.E. -- Ahmedabad, 2024(1) TMI 1210 -- Cestat Ahmedabad. The Tribunal set aside the demand which was confirmed alleging that the limitation of 6 months for availing Cenvat Credit introduced in terms of 3rd proviso to Rule 4 of Cenvat Credit Rules, 2004 would be applicable to duty paid documents issued prior to September 2014. The relevant part of decision is as under:- "5. As regard the issue A on the fact there is no dispute that all the invoices were issued prior to 18.09.2014. Therefore, the 3rd Proviso to Rule 4 of Cenvat Credit Rules, 2004 inserted with effect from 18.09.2014 shall not apply in respect of the invoices issued prior to 18.09.2014. Accordingly, on that basis the Cenvat credit could not have been dis-allowed. This issue is covered by the following judgment:- a) In the case of Roquette Riddhi Siddhi Pvt. Ltd. (supra) CESTAT Bangalore has passed the following decision:- "6.3. The second issue arises in Appeal No. E/20044/2017 is that whether the appellant can avail cenvat credit on the invoices issued prior to 01/09/2014 within six months after the issuance of the Notification No. 21/2014 CE (NT) dated 11/07/2014 or not? The sa....