Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

Comments

Print   |    |  Comment

PJ/CASE LAW/2015-16/2814

Whether credit admissible for input services received in other units?

Case:-EXPERT INDUSTRIES PVT. LTD. VERSUSCOMMR. OF C. EX., CUS. & S.T., BANGALORE-I

Citation:- 2015 (39) S.T.R. 465 (Tri. - Bang.)

Brief Facts:-The appellants are the manufacturers of Rotogravure Printing Machineries and Lamination Machineries falling under chapter 84 of the schedule to the Central Excise Tariff Act, 1985 and are operating under Cenvat Credit Rules, 2004. During audit of the records of the appellants by the Department, it was noticed that the appellants had availed credit of Service Tax paid on Security Service, Telephone Service and Manpower Service which were not used in the appellant’s manufacturing unit but were used in their other units viz., Unit II, Unit III and Unit V located at different places. Further it also appeared that the appellants had deliberately availed the said credit with an intention to utilize the same towards payment of duty for the reason that this aspect came to the notice of the Department only during the audit of the unit. Since it appeared that the said services do not fall under the purview of ‘‘input services’’ and in no way related to manufacturing activity, the original authority issued two show cause notices covering the periods from April, 2007 to February, 2010 and from March, 2010 to December, 2010 with a proposal to deny the credit of Rs. 54,882/- (Rupees fifty four thousand eight hundred and eighty-two only) and Rs. 15,125/- (Rupees fifteen thousand one hundred and twenty-five only), respectively and to recover the same along with interest and penalty. After due process, the lower authorities have confirmed the demand for Cenvat credit with interest and imposed penalty. Since the matter involved can be decided straightaway, the requirement of pre-deposit is waived and appeals are taken up for final decision. In both the appeals issue involved is common.

Appellants Contention:-The appellants have taken Cenvat credit of Service Tax paid on Security Service, Telephone and Manpower Supply Service provided to different units located in Bommasandra in different places in the main unit. The learned counsel submits that the credit was taken in the main unit since the bill was raised by the service providers on the main unit and further all the goods wherever manufactured finally come to the main unit and clearance of payment of duty takes place from the main unit only. Therefore the credit is admissible.

Respondents Contention:-Learned AR would submit that the units are located in different places and services are attributable to the concerned units and since those units do not pay duty, credit is not admissible.

Reasoning Of Judgement:-The tribunal have considered the submissions. According to proviso to Rule 3, a manufacturer or purchaser of final product can take credit of duty paid on any inputservice received by him. Unlike in the case of inputs where credit can be taken only when it is received in the factory, in respect of input service there is no such restriction. Under the circumstances, the credit is admissible to the appellant so long as he is a manufacturer or purchaser of final products and such final products are liable to duty and cleared on payment of duty. Further it can also be said that such input services have been used in or in relation to a manufacture of final product. Therefore credit is admissible. In view of the above discussion, the appeals are allowed with consequential relief, if any, to the appellants.

Decision:- Appeal allowed.

Comment:- The crux of the case is that according to Rule 3 of Cenvat Credit Rules,2004 the credit of input services can be taken by a manufacturer or purchaser of final product on any input service received by him and used in the manufacture of final product. There is no restriction in case of input services unlike inputs wherein credit is available for inputs received and used in the factory of production only. Accordingly, it was held that the cenvat credit of input services is admissible as far as they were used in relation to manufacture of final products. However, in the present scenario, the concept of input service distributor has been introduced and so it is required to distribute cenvat credit pertaining to particular unit also. Hence, this case has less relevance now.

Prepared By:- Neelam Jain
 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com