TMI Blog2023 (8) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... put services can be taken. Since the respondent is both a manufacturer and provider of output services from their Daman factory during the disputed period they are eligible for availment of Cenvat credit on input, capital goods and input services used for providing output services from the centralized service tax registration at the Daman factory and used for manufactured goods and for providing their output services. Further Cenvat being a beneficial piece of legislation, which was enacted for removing the cascading effect, the denial of credit citing procedural irregularities is unsustainable. It is a settled position that for availing the Cenvat credit the location from where the output service provided is not relevant. As long the service is provided by the service provider for which any input service is received and used for providing output service, the Cenvat credit on such input services shall be available and also for utilizing the said Cenvat credit for payment of service tax on the output service. Therefore, the location from where the service is provided and received is immaterial for availing the Cenvat credit on input services as well as for payment of service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used services such as GTA, Security Services, Telephone Bill, Housekeeping. Whereas, it appeared that respondent during the relevant period has also availed credit of services tax for the services related to ATM Operation, Maintenance Management Services, Security Services, Annual Maintenance charges, all of which were utilized at their depots/ Regional office/ Corporate Office/ Head Office/ Warehouse etc., and all their services were in relation to maintenance and management services of ATM machines installed at various other locations. Further, they have availed input service credit pertain to the services like Bank Charges, Courier services, GTA , Transaction charges, Legal charges, Work Contract Service, IT software service etc. which did not have any nexus with the manufacturing of the excisable goods at their Daman Plant; hence the credit of which was not available to them. 1.2 It also appeared that the respondent being a manufacturer of excisable goods, was registered with Central Excise Department and filing the ER-1 return in respect of their Daman Factory with Daman Authorities, that Head office of the respondent being Centrally registered at Mumbai as service prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e GTA, Security Services, Telephone Bills, House Keeping services only. Whereas the input service credit availed by the respondent during the relevant period under dispute, were in relation to ATM Operation, Maintenance Management Service, Security Service, Annual Maintenance Charges, and such credit also related to services like Bank charges, courier charges, GTA, Legal charges, IT software service etc., which were not received at the respondent‟s premises at Daman. These services were, in fact, received and utilized at the depots/ Regional office/ Corporate office/ Head Office and such other locations for which they were severally registered and holding centralized Service tax registration were filing separate periodical ST-3 returns. Thus, these were the input services received in relation to provisions of output service of ATM Operation Maintenance Management Services and such other output services at various other locations all over the country, but not definitely utilized in or in relation to manufacture and removal of dutiable excisable goods from the factory premises at Daman. 2.2 He further submits that Ld. Commissioner has travelled beyond the scope of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/2011-12 ST Dated 01.10.2011. He prays that the appeal is maintainable on facts, merits, legality and be allowed in favour of revenue. 3. On other hand Shri Prakash Shah appearing on behalf of the respondent along with Shri Suyog Bhave, reiterates the finding given by the Adjudicating Authority in the impugned order. He further submits that both the show cause notices as well as the present appeals are based on incorrect and incomplete facts, and on a myopic view of the factual matrix of the present case. The present appeal proceed on the basis that respondent was only a manufacturer of dutiable final products and completely ignore the fact that the respondent also provide the output services from their Daman Factory and was holding centralized registration at its daman factory. The impugned Order-In-Original, in paragraph 9.9(ii), has clearly held that the allegation made in the show cause notices cannot be upheld because they have not considered the factual position of the Respondent being a centralized service provider registered earlier at Mumbai and thereafter in continuity transferred to the Daman premises and that the show cause notices have been issued in total disregar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are to be received within the factory premises of the respondent. From a bare perusal of Rule 3 (1) of Cenvat Credit Rules, 2004, it is manifest that an output service provider is eligible to avail Cenvat Credit in respect of any inputs, input services or capital goods received by such service provider. He placed reliance on the decisions of Deepak Fertilizers Petrochemicals Corpn. Pvt. Ltd. Vs. C.C.Ex., Belapur -2013(32) STR 532 (Bom). 3.4 He also submits that the respondent availed the Cenvat Credit on the input services which were used in providing the output services of ATM services. Further respondent availed the Cenvat credit on Capital Goods viz., ATMs manufactured by it and removed from the factory on payment of duty as stock transfer to various depots from where they are cleared and installed at client site by way right to use. Thus, both the input services and capital goods were availed by the respondent as a provider of output services and the Respondent is eligible to avail Cenvat Credit in respect of the input services and capital goods even if not received or used within its factory premises. It is pertinent to note that the eligibility/nexus of the input servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions made by the respondent that the issue of nexus cannot be examined since Cenvat credit was cross-utilized. In the present matter show cause notices themselves were issued based on incomplete facts and a myopic view that the respondent was only a manufacturer and the input services and capital goods did not have a nexus qua the process of manufacture. 4. We have heard both sides and perused the records. The issue involved in the present case is whether the respondent is eligible to avail and utilize the CENVAT credit on input services and capital goods at Daman unit. In the instant case, there is no dispute about the genuineness of the transaction and the duty paid documents are not doubted. The contention of the revenue in the present matter is that Cenvat credit availed by the respondent at Daman Factory on input services and capital goods did not have any nexus, directly or indirectly, with the excisable goods manufactured by the respondent at their Daman unit, therefore respondent is not eligible for said disputed Cenvat credit. However, we find that the respondent was engaged in the manufacture of ATM Machine, Computer Systems and other excisable goods at its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978); (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957); (v) the National Calamity Contingent duty leviable under section 136 of the Finance Act, 2001 (14 of 2001); (vi) the Education Cess on excisable goods leviable under section 91 read with section 93 of the Finance (No.2) Act, 2004 (23 of 2004); (via) the Secondary and Higher Education Cess on excisable goods leviable under section 136 read with section 138 of the Finance Act, 2007 (22 of 2007); (vii) the additional duty leviable under section 3 of the Customs Tariff Act, equivalent to the duty of excise specified under clauses (i), (ii), (iii), (iv), (v), (vi) and (via); (viia) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act : Provided that a provider of taxable service shall not be eligible to take credit of such additional duty; (viii) the additional duty of excise leviable under section 157 of the Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided by the service provider for which any input service is received and used for providing output service, the Cenvat credit on such input services shall be available and also for utilizing the said Cenvat credit for payment of service tax on the output service. Therefore, the location from where the service is provided and received is immaterial for availing the Cenvat credit on input services as well as for payment of service tax on the output services. Further we observed that, the definition of input service is vider defined in Rule 2(l), and it would mean any service used by a provider of taxable service for providing an output service or used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal. We also agree with argument of respondent that there is no restriction in Rule 2(l) of Cenvat Credit Rules, 2004 in respect of the input service to be received and utilized only in the factory or premises of the output service provider. Thus, for the above reasons, we find that the Ld. Commissioner rightly allowed the Cenvat credit to the respondent in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also find that Apex Court in the case of Ramesh Foods Ltd. - 2004 (174) E.L.T. 310 (S.C.) held that there is no requirement of one-to-one co-relation in availment of Cenvat. Some of the judgments on this issue are reproduced below: (a) In the case of S.S engineers the Hon‟ble Bombay High Court dealing with a similar issue decided as under: Appellants are engaged in the manufacture of sugar machinery and parts thereof. They also undertake erection and commissioning of sugar machinery at the customers site. Appellants have taken separate registration as a manufacturer, as also as the service provider with the respective authorities. They availed the input and input service credit in respect of the manufacturing activity and pay the Excise duty on the goods manufactured in their factory. They also availed the credit of input and input services in respect of erection and commissioning of the machinery and also pay the Service Tax on the said activity. During the scrutiny, it was found that appellant availed credit of Service Tax on the services which are required in connection with erection and commissioning service but utilized the same for payment of Excise Duty on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nclusive state. He also advanced various arguments why it is administratively necessary to have separate accounts and elaborated various restrictions imposed under Rule 3(4) of the Cenvat Credit Rules, 2004 in this respect. He also quoted Rule 6(2) of Cenvat Credit Rules which provides maintaining separate account for taxable and exempted service. The learned AR also advanced argument that the Returns in case of Service Tax is filed half-yearly, while in the case of Excise these are monthly and if unified account is maintained it will create confusion. He also argued that the issue before the Tribunal in the case of Forbes Marshall Pvt. Ltd. quoted by the learned Counsel for the appellant has been unduly stretched and Tribunal s decision is therefore, not a very good law. 5. We have considered the rival submissions. We have gone through the Cenvat Credit Rules. We find that Rule 2 defines input, input services, capital goods etc. Before availing Cenvat credit, a manufacturer or service provider has to satisfy the definitions provided under the said Rules. Rule 3(1) of the Cenvat Credit Rules states that a manufacturer or producer of final products or provider of taxable servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vider of taxable service is also entitled to take credit of specified Excise Duty, additional duty of Customs and Service Tax in respect of input services and utilize the credit from all these sources for the purpose of paying Service Tax. The objection by the Department is that the respondent who is both a service provider and a manufacturer should maintain two separate accounts one in respect of credit attributable to inputs, capital goods and services meant for excisable goods and credit attributable to capital goods, inputs and services attributable to the service provided by them. Common Cenvat Credit Rules have been framed in terms of powers conferred by Section 37 of the Central Excise Act, 1944 and Section 94 of the Finance Act, 1994. Rule 3(1) enables a manufacturer or a provider of taxable service to take credit of specified duties and utilize them to discharge duty liability under Rule 3(4) of the Cenvat Credit Rules. A credit can be utilized for payment of any duty of Excise on any final product or for payment of Service Tax on any output service. The respondent is undisputedly registered as a service provider for providing the services of renting of immovable prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for payment of various liabilities and includes any duty of excise on any final product as also Service Tax on any output service (other situations also covered under the said sub-rule, which are not relevant in the present case). Thus, we find that Rule 3 of the Cenvat Credit Rules, 2004 does not stipulate maintaining separate account as a manufacturer and as a service provider. Third proviso to sub-rule (4) of Rule 3, provides that no credit of the additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act, shall be utilized for payment of Service Tax on any output service. Similar restrictions are in other proviso. We also note that there are certain restrictions on the utilization of particular type of duties which are elaborated in sub-rule (b) of Rule 7 of the Cenvat Credit Rules. These restrictions do not cover cross utilization of credit of Excise and Service Tax, as a general proposition. 6. We have also gone through the various case laws quoted by the learned Counsel for the appellant and we note that in the case of CCE, Pune v. Lakshmi Technology and Engineering Industries Ltd. (supra) in para 6 has observed as under : 6. I have caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and for use for providing services. Therefore, the view taken by the Commissioner (Appeals) cannot be faulted. The clarification sought to be relied upon by the Department that input credit service taken only if the output is a service liable to Service Tax has no relevance to the present case. Undisputedly, the respondents have registered themselves as service provider of service of renting of immovable property and paying Service Tax as provider of output service and therefore the utilization of credit taken by them is valid. 7. In addition to above, we have also gone through the format of ER-1 return and ST-3 return. Sr. No. 8 and the Table details the Cenvat credit taken and utilized. In ER-1 return, in Table at Sr. No. 8, in column (9), details about Service Tax are specifically listed. On careful analysis of the said format, the intention appears to be to permit cross utilization of the credit of Excise Duty and Service Tax. 8. In view of above analysis the appeal is allowed. (c) This issue was also considered in the case of Lakshmi Technology Engineering industries limited (Supra) wherein the Tribunal has passed the following order: 6. I have caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and for use for providing services. Therefore, the view taken by the Commissioner (Appeals) cannot be faulted. The clarification sought to be relied upon by the Department that input credit service taken only if the output is a service liable to service tax has no relevance to the present case. Undisputedly, the respondents have registered themselves as service provider of service of renting of immovable property and paying service tax as provider of output service and therefore the utilization of credit taken by them is valid. 7. The appeal is therefore dismissed. (d) In the case of Areva T D India Ltd the tribunal taken the similar view as under: 7.1 Regarding the second objection that the service tax credit has been used by the respondents in respect of goods manufactured and cleared by them, there is no merit in the same. Rule 3(1) of the CENVAT Credit Rules permit a manufacturer or a service provider to take credit of duty paid on inputs, capital goods and service tax paid on input service. In the present case, the respondents is both a manufacturer and a service provider . There is no stipulation in the rule that there should be separate CENVAT cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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