Whether one to one correlation required for input services utilized in manufacturing final products and providing output service?

PJ/Case Laws/2012-13/1367

Case:-JYOTI STRUCTURES LTD. Versus COMMISSIONER OF CENTRAL EXCISE, NASIK

Citation:-2012 (28) S.T.R. 380 (Tri. - Mumbai)

Brief Facts:-The appellants are manufacturer of transmission towers and also providing services of erection, commissioning & installation, management, maintenance or repair, testing, inspection of these towers etc. For their activity of manufacturing and providing the above services, the appellants availed Cenvat credit on inputs, capital goods and input services without maintaining separate ledger a/c of input/input services utilized. Therefore, it was alleged that the assessee is not entitled for input service credit availed by them.

Reasoning of judgement:-The allegation against the appellants is that as they are not maintaining a separate account for input/input services availed by them for providing output services therefore, they are not entitled for input services credit. But as per Rule 3 of the Cenvat Credit Rules, 2004, that deals with availment of Cenvat credit and its sub-rule (4) provides that
“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.”
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 said issue came up before this Tribunal in the case of Forbes Marshall Pvt. Ltd. v. Commissioner of Central Excise, Pune - 2010 (258) E.L.T. 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, we maintain here also that 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, we set aside the impugned order and allow the appeal.

Decision:-Appeal Allowed.

Comment:- The analogy drawn from this case is that when there is no requirement in law to maintain separate records for input services utilized in respect of manufacturing final products and that used in providing output services, cenvat credit cannot be denied to the assessee.

Comments

PJ/Case Laws/2012-13/1367

Post a Comment

Query