CESTAT upholds Distribution of Cenvat Credit on Service Tax Paid on Inputs Services to Manufacturing Units, including Job Workers [Read Order]
CESTAT upholds the distribution of cenvat credit on service tax paid on inputs services to manufacturing units, including job workers
![CESTAT upholds Distribution of Cenvat Credit on Service Tax Paid on Inputs Services to Manufacturing Units, including Job Workers [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/03/cenvat-credit-site-img.jpg "CESTAT upholds Distribution of Cenvat Credit on Service Tax Paid on Inputs Services to Manufacturing Units, including Job Workers [Read Order]")
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the distribution of cenvat credit on service tax paid on inputs services to manufacturing units, including job workers. Padmavati Patil, Counsel appearing on behalf of the Appellant submitted that in this case the appellant are manufacturing biscuits exclusively for Parle Biscuit Pvt. Ltd...
The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the distribution of cenvat credit on service tax paid on inputs services to manufacturing units, including job workers.
Padmavati Patil, Counsel appearing on behalf of the Appellant submitted that in this case the appellant are manufacturing biscuits exclusively for Parle Biscuit Pvt. Ltd under their brand name viz. Parle-G, Hide & Seek, Monaco etc. in terms of clause (ii) of Notification No. 36/2001- CE (NT) dated 02.06.2001 as a job worker known as contract manufacturing unit. Since the manufacturing is done under the aforesaid notification for all the purpose the appellant is treated as deemed principal manufacturer. Accordingly, the excise duty was also paid as if the goods manufactured and cleared by M/s. Parle Biscuits Pvt. Ltd. Consequently, the appellant is legally entitled for the CENVAT Credit.
M.G Rayka, Additional Commissioner ( AR ) appearing on behalf of the Revenue reiterated the finding of the impugned order.
In the case of Krishna Food Product it was observed that “CENVAT is a beneficial scheme with the stated purpose of allowing CENVAT credit of all taxes paid on inputs and services so as to avoid cascading effect of taxes and duties. Thus, even in terms of the provisions of rule 2(m) and rule 7 of the CENVAT Rules, as they stood prior to 01.04.2016, the appellant could distribute CENVAT credit in respect of the service tax paid on inputs services to its manufacturing units, including a job workers.”
A Division bench of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “From the above judgment, it can be seen that the issue involved in the present case has been settled in favour of the assessee. Accordingly, the impugned order in the present case is also not sustainable. Hence, the impugned order is set aside. Appeals are allowed.”
To Read the full text of the Order CLICK HERE
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