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2018 (3) TMI 922 - AT - Central ExciseCENVAT credit - capital goods - input services - case of the department in the show cause notice is that M/s Sparkon did not have independent existence and merely prepared invoices for the purpose of enabling the appellant to avail credit of the duty/service tax paid. Held that: - it appears that M/s Sparkon Eengineering- proprietor PR Sajan was properly set up in the year 2005. They had separate registration under Central excise, has separate premises, had the own plant and machinery and had fabricated and cleared plant and machinery to SIL- EOU. The only fact that the proprietor Mr Sajan was also an employee of SIL, the Financial assistance and management assistance, particularly financial affairs do not lead to the inevitable conclusion that Sparkon was a dummy organisation - the ld Commissioner have rightly held that the dispute of credit on capital goods in question, the same were manufactured in the factory premises of the SIL - EOU or DTA, that there is no question of payment of any tax in view of N/N. 67/1995-CE - appellant SIL EOU is entitled to Cenvat credit attributable to inputs and input services. CENVAT credit on input services - Held that: - Mr Sajan was under the whole time employment of the appellants, further he was found to be unaware regarding such invoices raised, reveals that the work was done under the relation of employer and employee and not services provided by a separate entity - credit rightly denied - demand of interest upheld. Penalties - Held that: - it is evident that the appellant have made the payment for the invoices disputed for input service and then taken credit. That sparkon was duly registered with the service tax Department - As the appellant had paid the tax and then taken credit, in the interest of Justice, penalties set aside. Appeal allowed in part.
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