M/S. Acro Paints Ltd vs C.C.E. Jaipur-I

[Arising out of Order-In-Appeal No. 150 (RKS) CE/JPR-I/2008 dated: 25.06.2008 passed by CCE (Appeals) Jaipur-I]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Acro Paints Ltd. ...Appellant

Vs.

C.C.E. Jaipur-I Respondent

Appearance:

Mr. Navin Mullick, (Advocate) for the Appellant

Mr. Ranjana Jha, DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing/ Decision. 20.08.2015

Final Order No. 54210 /2015_

Per S K Mohanty:

Brief facts of the case are that the appellant is engaged in the manufacture of paints, falling under Chapter 32 of the Central Excise Tariff Act, 1985. The appellants factory is located in the District of Bhiwadi, Alwar and the head office in Delhi. The appellant avails cenvat credit of service tax paid by the head office on the input services. During the disputed period, service tax department denied the cenvat credit to the appellant on the ground that the input services were received by the head office prior to obtaining registration certificate from the jurisdictional service tax authorities. The amount of cenvat credit confirmed in the adjudication order was upheld in the impugned order, against which the present appeal has been filed before this Tribunal.

2. Sh. Naveen Mullick, the Ld. Advocate for the appellant submits that the head office of the appellant was registered with the Central Exicse Department on 06.03.2006 and thereafter, the ISD invoice was issued by the head office to the factory at Bhiwadi for availing the cenvat credit of service tax paid on the taxable services. It is his submission that since the ISD invoices were issued by the head office after registration and the service tax paid on the disputed services were taken as cenvat credit by the appellant in its factory, cenvat credit cannot be denied in absence of any specific stipulation/ prohibition contained in the Cenvat Credit Rules, 2004. He further submits that input service distributed by the head office have been duly reflected in the returns filed before the Jurisdictional Central Excise Authorities at Delhi. The genuineness of the credit distributed has not been disputed by the Jurisdictional service tax authorities having jurisdiction over the head office of the appellant at Delhi.

3. Per contra the Ld. Jt. CDR Ms. Ranjana Jha appearing for the Respondent submits that since the input services were received by the head office prior to taking service tax registration, the same cannot be distributed to the factory and distribution of such credit is not in conformity with the cenvat statute. It is her submission that since the service tax has been wrongly availed by the appellant, the same is not permissible as per the statute. In this context, she relies on the decision of this Tribunal in the case of M/s NITCO Ltd. vs CCE Raigad reported in 2014 (34) STR 835 and Mangalore Refinery & Petrochemicals vs CCE Mangalore reported in 2013 (30) STR 475 (Tri. Bang). She also submits that since the appellant has taken the credit in their Bhiwadi Factory, the proceedings have been rightly initiated by the service tax authorities having jurisdiction over the factory at Bhiwadi and there was no requirement for initiation of proceedings by the service tax authorities in Delhi.

4. I have heard the Ld. Counsel for both sides and perused the records.

5. I find from the available records that head office of the appellant in Delhi was registered with the Service Tax Authorities on 06.03.2006 and thereafter on 16.03.2006, the ISD invoices were issued to the appellant, enabling it to take cenvat credit of service tax paid on the disputed services. Since the appellant has taken the cenvat credit based on the document prescribed under Rule 9 of the Cenvat Credit Rules, I am of the considered view that there is no infirmity in taking such cenvat credit, and as such, the same cannot be denied to the appellant. The decision cited by the Ld. Jt.CDR are distinguishable from the facts of the present case inasmuch as the issued decided in those decided cases relates to distribution and taking of cenvat credit prior to obtaining the registration certificate.

6. I view of the above, I am of the opinion that the impugned order is not sustainable and as such, the same is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty) Member(Judicial)

Neha

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