2017 (2) TMI 833 - CESTAT AHMEDABAD

Cenvat credit - Capital goods and input at service station - No centralised registration - Penalty - Rule 15(2) of CER, 2004 - Time limitation - Held that: - In the present case the appellant could not bring out any particular rule of Cenvat Credit Rule,2004 in which the defined expressions input and capital goods be read differently in the context of the said Rule - The principal criteria for eligibility to CENVAT Credit on inputs rests on its use in or in relation to manufacture of final products in the factory and for capital goods its use in the factory of production.

The learned Advocate has also submitted that they have applied for centralized registration way back in 2005, which was to them allowed to them pursuant to issuance of Notification No.43/2008CE(NT) dt. 06.10.2008 It is his contention that the said notification is retrospective in nature and accordingly, the Appellants are eligible to avail CENVAT Credit of inputs/capital goods at their daughter stations. On going through the said notification and the Circular no. 875/13/2008-CX dt. 16.10.2008 issued in this regard we find that though centralized registration was allowed, but it is specifically mentioned that provisions governing eligibility to claim the CENVAT Credit would be applicable as earlier.

The issue of eligibility of CENVAT Credit on input service where the Input service distributor is not registered has been settled by the Gujrat High Court in the case of CCE Vs. Dashion Ltd. [2016 (2) TMI 183 - GUJARAT HIGH COURT] - it is clear that to avail input service credit, the registration of head office/registered office is not mandatory, however, it is necessary to ascertain the documents on which these units had availed credit as there have been claims and counter claims - In the Departments contention, all relevant documents on which input service CENVAT credit availed, had not been placed before the adjudicating authority, whereas, the claim of the appellant is that the relevant input service invoices were submitted before the authorities in September 2007. Hence, in our opinion, to verify the claim, it is necessary to remit the case for verification of the documents.

It cannot be denied that the issue of eligibility of CENVAT credit on capital goods inputs and input services availed at various daughter stations, from where the CNG was ultimately cleared/sold during the course of pendency of application for centralised registration, rests on interpretation of the relevant provisions of law and all facts had been disclosed to the department - Hence, imposition of equivalent penalty on the appellant under rule 15(2) of Cenvat Credit Rules,2004 read with section 11AC of Central Excise Act,1944 is unsustainable in law - Appeal disposed of.