Whether one to one correlation of Cenvat credit availed inputs and input services used for discharging duty liability for excise and service tax?

PJ/ Case Laws/2012-13/1272

CASE: - JYOTI STRUCTURES LTD V/S COMMISSIONER OF CENTRAL EXCISE, NASIK

CITATION: - 2012-TIOL-1312-CESTAT-MUM

BRIRF FACTS: - The appellant are manufacturers of Transmission of Towers and also providing services of erection, commissioning & installation, maintenance, repair, testing, inspection of towers etc. The Assessee has availed Cenvat credit on inputs, input services and capital goods and also utilized such credit in providing output services of erection, maintenance, repair etc. The Department has denied this credit alleging that the assessee does not maintain any separate accounting in respect of inputs, input services utilized in the manufacture of final products and used in providing of output services. Consequently, a show-cause notice was issued to the appellants demanding service tax on credit earned on input/input services and CENVAT credit taken on inputs/input services utilized by them for providing output services. Thereafter, the assessee has filed an appeal against the department. The Hon’ble Tribunal has ordered that the assessee is allowable to such credit having regard to Rule 3(4) of Cenvat Credit Rules, 2004.

APPELLANTS CONTENTION: - Appellant contended that the Cenvat credit availed on Inputs, Input services can be utilized in providing of output services of erection, installation & commissioning, maintenance, repair etc. because there is no provision in Cenvat credit rules regarding maintenance of separate accounting in respect of credit on inputs and input services.
RESPONDENTS CONTENTION:- The learned Departmental Representative defended that as the appellants are not maintaining a separate account for input/input services availed by them for providing output services therefore, they are not entitled for input service credit.

REASONING OF JUDGEMENT: - The Hon’ble Tribunal has held that according to Rule 3 (4) of the CENVAT Credit Rules, 2004, dealing with availment of CENVAT credit, the credit may be utilized for payment of service tax on any output services provided that while paying duty of excise or service tax, as the case may be, the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month or quarter, as the case may be, for payment of duty or tax relating to that month or the quarter, as the case may be.” Thus, it is not disputed that the appellant has availed credit which is available to them and there is no provision for segregation of input/CENVAT credit for payment of excisable goods and for payment of service tax. The Tribunal has also referred the case of “Forbes Marshall Pvt. Ltd. vs. Commissioner of Central Excise, Pune - 2010 (258) ELT 571 (Tri.)” wherein this Tribunal has observed that there is no provision in CENVAT Credit Rules, 2004, for segregation of input services utilized in manufacture or to provide output service. Following the said decision, here also there is no requirement for one to one co-relation of CENVAT credit availed on input services towards payment of output services. In view of these observations, The Tribunal set aside the impugned order and allows the appeal of the Assessee.

DECISION: -The appeal was allowed.

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PJ/ Case Laws/2012-13/1272

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