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2020 (2) TMI 691 - HC - Central ExciseCENVAT Credit - capital goods - immovable goods or not - fabrication of Goliath Crane, Jib Crane, Gantry Crane, Electric Overhead Travelling (EOT) Crane, etc., which are embedded to earth can be treated as excisable goods - Cenvat Credit availed of Inputs/ Capital Goods like HR Plates, MS Flats, MS Coils, Wire Ropes, Rail, Welding Electrode and service used for fabrication of these cranes is admissible to the respondent – assessee - HELD THAT:- The cranes fabricated from HR Plates, MS Flats, MS Coils, Wire Ropes, Rail, Welding Electrode cannot be considered as “embedded to the earth” since they run on tracks fitted in and around the Dry Dock. Thus, they cannot be termed as immovable property. Moreover, merely because they may have to be dismantled to be shifted out of the respondent's premises does not make them immovable property. The services for setting up a factory and any activity relating to business are specifically included within the definition. The Cranes being part of the factory of the respondent where the ships are manufactured and their fabrication being an activity relating to respondent's business, services used for fabrication thereof would be covered within the meaning of “input services” - Hence also, cenvat credit of service tax paid on such services availed by the respondent must be allowed. Whether invoices issued for distribution of Service Tax paid by office other than that of manufacturer or producer or provider of output service as an Input Service Distributor for distribution of Service Tax is eligible for Input Service Credit and Input Service credit can be availed on such invoices? - HELD THAT:- There is no provision which creates any bar against a head office of a company from distributing credit of service tax paid on services purchased to its various units. Ordinarily, it is only the head office of a company which would place the orders for availing services, receive invoices towards purchases of input services and then distribute the credit of service tax paid to the company's various other units. Nowhere in the Cenvat Credit Rules, 2004 it is provided that for an office of a company to be termed as “input service distributor”, it must be mentioned in the LOP of the company's suit - Indisputably, the respondent EOU belongs to the company. Indisputably, the Mumbai office is the head office of the company. In fact, the Mumbai office of the company is registered as the Input Service Distributor with the service tax authorities. It is therefore obvious that the Mumbai office, being the head office of the company, which owns several units, receives invoices issued under the Service Tax Rules, 1994 towards the purchases of input services and issues invoice, bill or challan for the purpose of distributing the credit of service tax paid on said services to its various manufacturing units. There is no illegality in this whatsoever. Whether Cenvat Credit of Input, Input Service or Capital Goods shown/ declared in Monthly Return (ER2) filed before Central Excise Officer (incharge of the factory) is admissible and qualifies as Cenvat Credit for the output service provider when same is not shown/ declared in ST3 Return to be filed before jurisdictional Service Tax authorities considering that criteria to qualify the same for such credit are different for manufacturer or Output Service Provider? - HELD THAT:- The input service credit cannot be denied on the ground that it is shown in the ER1 return instead of the ST3 returns since the cross utilization of credit of input and input service is permissible and cenvat credit on input, capital goods and input services used in the manufacturing goods or providing output service is available in common pool and cenvat credit taken during the period shown in ER1 or ST3 return would be the same and there is no restriction on utilization of the common input credit. Whether the Cenvat Credit of duty paid on Input/ Capital Goods and Service Tax paid on taxable services used for fabrication of Dry Dock which is a concrete structure embedded to earth and immovable in nature eligible as Cenvat Credit as per Cenvat Credit Rules, 2004? - HELD THAT:- The items such as cement, steel, etc., used in constructing/ fabricating a Dry Dock, are clearly items used “in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not” and are therefore, “inputs” within the wide meaning of the said word as defined in the Rule 2(k) of the Cenvat Credit Rules, 2004 and therefore also, the Cenvat Credit of Excise Duty paid on the same cannot be denied. Whether the Tribunal is justified in accepting the photocopy of the invoices as an admissible evidence/ record and remanding the proceeding back to the adjudicating authority for considering the issue afresh? - HELD THAT:- The CESTAT has observed that the Adjudicating Authority had held against the assessee on the basis of a report of the Superintendent which was not disclosed to the assessee and hence, the matter was remanded so that the said report could be provided to the assessee before taking a decision. The CESTAT directed the Adjudicating Authority to take appropriate decision afresh after providing the report and considering the assessee's submission - there are no merit in the submission canvassed on behalf of the appellant that no Cenvat Credit can be allowed in favour of the respondent in respect of the inputs, capital good and inputs service used to fabricate cranes and Dry Dock as the final product of the respondent is exempted from duty. Appeal dismissed - decided against appellant.
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