The New Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), observed that when services in question are settled to be eligible input services then Cenvat credit cannot be denied.
That the appellants, M/s. Indo Alusys Industries Ltd is engaged in the manufacture of Aluminium Alloy Extruded Products. They were also having one APP Division with centralized registration in the category of ‘Commercial & Industrial Construction Services’ in Delhi. The later was also having Input Service Credit Distributor Registration (ISD Registration).
The department observed that the appellant was taking Cenvat credit on the strength of invoices as were raised by the ISD. The activity of ISD was observed to be nothing more than the fixing of doors and windows which were manufactured by the appellant.
The Appellants were also alleged to have utilized the said irregular credit for payment of central excise duty payable on clearance of their final products which resulted in short payment of duty to the extent of the use of said irregular input service credit.
The Counsel for the appellant has mentioned that all the services alleged in the show cause notice had already been held to be eligible input services under the catena of decisions. Hence, it has wrongly been alleged and held that the appellant as well as its APP Division were not entitled to the Cenvat credit in respect of all taxable services being provided by both units.
The Counsel also contended that the appellant had not taken credit of any service received in service providing unit or of any service exclusively used in service providing unit, the demand confirmed is mentioned to be absolutely unreasonable and unjustified.
The Counsel for the Respondents argued that to avail the Cenvat credit, the input service must have the nexus with the process of manufacture inasmuch as the input service is used in or in relation to the manufacture of the final product. However, in the present matter, the said nexus could not have been established by the appellant.
The Bench comprising Dr Rachna Gupta, Judicial Member and Hemambika R Priya, Technical Member observed that “Once the services in question have already been settled to be the eligible input services, the Cenvat credit thereof cannot be denied to the assessee. There remains no necessity to invoke Rule 9(6) of Cenvat Credit Rules, 2004.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
