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M/s Cema Electric Lighting Products India P Ltd Versus Commissioner of Central Excise, AHMEDABAD-III

2015 (8) TMI 150 - CESTAT AHMEDABAD

Denial of CENVAT Credit - Input service - activities relating to business - 100% of services covered under Rule 6(5) of the Cenvat Credit Rules 2004 - utilization of common input services - Trading activities - Held that:- Definition of Input service given under Cenvat Credit Rules 2004 is very wide and it covers services used directly or indirectly in or in relation to manufacture of final products. The inclusive part of definition of input service at the material time in 2007-08 allowed credit .....

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the appellant. Commissioner (Appeals) finding for not following the case law of Coca Cola India Pvt Ltd [2009 (8) TMI 50 - BOMBAY HIGH COURT], is not correct because, there is no stay on the operation of that decision and only filling appeal against the decision is not enough for not following the said decision which is also followed in CCE v/s Parth Poly Wooven Pvt. Ltd. - [2011 (4) TMI 975 - GUJARAT HIGH COURT] and many other cases like [2014 (3) TMI 921 - GUJARAT HIGH COURT]- CCE v/s INDUCTOT .....

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5) for the above 17 services and that these services are not used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. Needless to mention that appellant will be granted an opportunity of personal hearing to produce necessary documents to prove eligibility to credit claimed by them following principles of natural justice. - impugned Order demanding duty with equal penalty deserves to be modified - Decided in favour of assessee. - Appeal No. : E/787/2 .....

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46,05,092/- which was ordered to be recovered under rule 14 of the Cenvat Credit Rules 2004 along with interest and equal penalty. 2. Revenue s case in brief is that the Appellant is holding Central Excise Registration No. AACCC9663XM001 and has been engaged in the manufacture of Fluorescent Tube Lights, General Lighting Lamps, Compact Fluorescent Lamps etc falling under Chapter 85 of Central Excise Tariff Act 1985 and marketing products through 16 branch offices situated all over India, for wh .....

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all over India. A Show Cause Notice No. V.85/15-17/off/oa/11-12 Dated 05-05-2011 was issued for recovery of Cenvat Credit of ₹ 46,05,092/- under Rule 14 of the cenvat Credit Rules 2004 read with section 11A(1) of the Central Excise Act 1944 along with interest and for imposition of penalty. Out of demand of Cenvat Credit of Rs. 46,05,092/-, Adjudicating Authority allowed Cenvat Credit of ₹ 30,88,512/- availed in or in relation to above services except trading related activities, whe .....

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Thankraj (Consultant) appearing on behalf of the Appellant argued on the following points :- a) that the definition of input service is very wide. Input service covers not only services used directly or indirectly in or in relation to manufacture of final products but also various services used in relation to business of the manufacturer whether availed prior to manufacture or after manufacture. He also argued that Adjudicating authority had correctly dropped demand but Commissioner (Appeals) h .....

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es covered under Rule 6(5) ibid and these services were not used exclusively for providing the exempted services or manufacture of exempted goods; that these common input services were used both for marketing of appellant s own manufactured goods and trading goods; that reliance by Lower authorities on the Tribunal decision in the case of ORION APPLIANCES LTD reported in 2010 (19) S.T.R. 205 (Tri. - Ahmd) is totally wrong, as in the said case, it has been held that credit of input services, whic .....

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attributing common input services to trading activity and that too on wrong basis. He submitted that percentage of trading income to total income is only 6.03 % as prescribed in Cenvat Credit Rules 2004 and appellant had already reversed excess input service credit. Additional Commissioner has erred in holding the percentage of trading income to total income as 63.37% without considering the explanation to Rule 6(3A)(c). d) that the subject SCN is time barred as Appellant's Company has been .....

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venue, reiterated the findings of the first appellate authority and submitted that the services in question are not used in or in relation to the manufacture of final products and also are attributable to trading activity and hence the findings in the O-I-A does not require any interference. Learned Authorised Representative thus strongly defended the order passed by the first appellate authority. 5. Heard both sides and perused the case records. The issue involved is about denial of Cenvat Cred .....

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admissible to Appellant. On appeal against the said O-I-O by both sides, Commissioner (Appeals) Ahmedabad, disallowed entire Cenvat Credit of ₹ 46,05,092/- in favour of Revenue under Rule 14 of the Cenvat Credit Rules 2004. 6. So far as disallowing Cenvat Credit of ₹ 30,88,512/- is concerned, the findings of the first appellate authority in Para 8.1 and 8.2 of the impugned O-I-A in appeal, are to the effect that the original authority has followed the decision in the case of Coca Col .....

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lant that definition of Input service given under Cenvat Credit Rules 2004 is very wide and it covers services used directly or indirectly in or in relation to manufacture of final products. The inclusive part of definition of input service at the material time in 2007-08 allowed credit of services used in any activity relating to business. Regarding cenvat credit pertaining to canteen services no evidence exists on record that any amount has been recovered from the employees of the appellant. T .....

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ing appeal against the decision is not enough for not following the said decision which is also followed in CCE v/s Parth Poly Wooven Pvt. Ltd. - 2012 (25) S.T.R. 4 (Guj.) and many other cases like 2014 (36) S.T.R. 994 (Guj.)- CCE v/s INDUCTOTHERM INDIA P. LTD. Hence Appellant is eligible for the cenvat credit of ₹ 30,88,512/-. 7. So far as disallowing Cenvat Credit of ₹ 15,16,580/- is concerned, first appellate authority has upheld the order of adjudicating authority. The credit in .....

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Rule 6(5), reproduced in Para 9 of the impugned O-I-A dt. 10-12-2012 that the said rule covers total 17 taxable service as specified in sub-clauses (g), (p), (q), (r), (v), (w), (za), (zm), (zo), (zy), (zzd), (zzg), (zzh), (zzi), (zzk), (zzq) and (zzr) of clause (105) of section 65 of the Finance Act where credit shall be allowed in full unless such service is used exclusively in or in relation to the manufacture of exempted goods or providing exempted services. Revenue has disallowed cenvat cre .....

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