Hyundai Motors India Ltd vs Commissioner Of Central Excise
- CitationAppeal No.ST/MISC/42433, 42434/2014
Ratio decidendi
The rule this decision rests on
Cenvat credit earned on domestically procured input services may be set off against a service tax liability arising from services received from a foreign provider, where no provision of law requires that a specific input service credit be utilised against a specific output service, since the purpose of the cenvat scheme is to avoid cascading and no one-to-one correspondence between credit and liability is required. Where the eligibility of cenvatable credit is not disputed, the credit so earned may be utilised to discharge excise duty liability arising from the clearance of manufactured goods.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI
Appeal No.ST/MISC/42433, 42434/2014 & ST/106, 136/2006
[Arising out of Order-in-Original No.18/2005 dt. 30.12.2005 and OIO No.11/2006 dt. 10.5.2006 passed by the Commissioner of Central Excise, Chennai-IV and CST Chennai]
Hyundai Motors India Ltd. Appellant
Versus
Commissioner of Central Excise, LTU, Chennai Respondent
Appearance:
Shri S.Muthuvenkatraman, Advocate For the Appellant
Shri M. Rammohan Rao, DC (AR) For the Respondent
CORAM :
Honble Shri D.N. Panda, Judicial Member Honble Shri R. Periasami, Technical Member
Date of Hearing/Decision : 07.04.2015
FINAL ORDER No.40361-40362/2015
Per D.N. Panda
The short issue in this appeal is whether the service tax liability incurred by appellant against the service received from foreign service provider is adjustible against the cenvat credit earned domestically on the input services. Revenue is not able to show whether there is any specific provision to deny the credit so earned to be set off against service tax liability arose from the service received from abroad.
2. For the proposition of allowance, appellant relied on the decision of Hon'ble Karnataka High Court in the case of Commissioner of Service Tax, Bangalore Vs Aravind Fashions Ltd. 2011-TIOL-748-HC-KAR-ST. So also he relies on the decision of the Hon'ble Madras High Court in CCE Salem Vs Cheran Spinners Ltd. - 2014 (33) STR 148 (Mad.). There is no difference to the proposition of law laid down in these two judgements. The elementary principal of cenvat credit is to avoid cascading effect. So also there no one to one relationship being required to be established get cenvat credit, in the absence of any specific provision in law requiring specific input service credit to be utilized against specific output service, appellant succeeds. Accordingly, both the appeals on this count are allowed.
3. The next question in appeals arises is whether credit earned by the appellant domestically shall be utilized against duty liability arose due to clearance of its manufactured goods. Revenue having no dispute on the eligibility of earning of cenvatable credit, discharge of the liability of excise duty from such credit is undeniable.
4. In the result, both the appeals are allowed.
5. In view of appeals being disposed as above, MISC applications do not call for disposal being infructuous, for which both the applications are dismissed.
(Dictated and pronounced in open court)
(R. PERIASAMI) (D.N. PANDA) TECHNICAL MEMBER JUDICIAL MEMBER
gs 2
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free