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PM-STIAC discusses accelerating Industry-Academia Partnership for Research and InnovationIndia, Singapore hold dialogue over cyber policy44 bids received under 10th Round of Commercial Coal Mine AuctionsCops arrest former Dy PM of Nepal in cooperative fraud casePuri highlights India's Petrochemical potential at India Chem 2024UN reports record high cocaine production in ColombiaMinister unveils 'Aviation Park' showcasing India's Aviation HeritageED finds PFI wanted to start Islamic movement in IndiaBlocking Credit - Rule 86ASEBI says investors can use 3-in-1 accounts to apply online for securitiesI-T- Penalty u/s 271(1)(b) need not be imposed when assessee moved an adjournment application & later complied with notice u/s 142(1): ITAT4 Kanwariyas killed as vehicle runs over them in Banka, BiharI-T- Accounting principles do not prescribe maintaining of a day-to-day stock register, and the books of accounts cannot be rejected on this basis alone: ITATUN food looted and diverted to army in EthiopiaCus - Alleged breach of conditions for operating public bonded warehouse; CESTAT rightly rejected allegations, having found no evidence of any such breach: HCUS budget deficit surges beyond USD 1.8 trillionST - Onus for proving admissibility of Cenvat Credit rests with service provider under Rule 9(6) of the Cenvat Credit Rules, 2004: CESTATIf China goes into Taiwan, Trump promises to impose additional tariffsRussians love Indian films; Putin lauds BollywoodCus - Classification of goods is to be determined in accordance with Customs Tariff Act & General Interpretative Rules; Country-of-Origin Certificate may offer some guidance, but cannot solely dictate classification: CESTATCus - Benefit of such Country-of-Origin certificates cannot be denied if all relevant conditions are met under the applicable Customs Tariff rules: CESTATCuban power grid collapses; Country plunges into darknessCus - As per trite law, merely claiming a classification or exemption does not constitute mis-declaration or suppression - any misclassification does not equate to willful intent to evade duty: CESTATKarnataka mulling over 2% fee on aggregator platforms to bankroll gig worker welfare fundCus - Extended limitation cannot be invoked in case of assessee who is a regular importer with a consistent classification approach: CESTAT
 
ST - Both CX and ST registration are taken by same legal entity, therefore, single CENVAT Credit account can be maintained: CESTAT

By TIOL News Service

MUMBAI, MAR 17, 2017: THE appellants are manufacturers and are also engaged in providing installation and commissioning services. Furthermore, on Renting of immovable property services, the appellants paid Service Tax using CENVAT Credit available to them as manufacturers.

A notice was issued to the appellant alleging that it was incorrect to utilize the CENVAT Credit earned on manufacturing activity for payment of Service Tax liability. Nonetheless,the SCN did not cite any rule, which infraction was committed by the appellant.

The demand was confirmed by the lower authorities and, therefore, the appellant is before the CESTAT.

None appeared for the appellants.

After hearing the AR, the Bench observed thus –

++ The O-in-O relied on Rule 3 (1) and Rule 3 (4) of the CCR, 2004 and held that the manufacturer cannot use credit availed to discharge Service Tax liability as Service Tax provider in absence of any nexus. I find that there is no such requirement for a person to keep separate CENVAT Credit accounts for manufacturing and service activities. Rule 3(1) of the Cenvat Credit Rules provides that a person can avail credit in respect of the manufacturing activity as well as in respect of the activities of providing services. This is a common pool and no different pool for manufacturing and service related activities. Rule 3(4) of the Cenvat Credit Rules prescribes that such credit can be used for payment of excise duty or for Service Tax on any output services. I find that there is no such condition that the CENVAT Credit earned under Rule 3 (1) of the Cenvat Credit Rules can be used for ‘X' purposes and not for ‘Y' purposes.

++ The second issue raised is that the appellants are registered separately as manufacturer and service provider. As a result, there are two distinct different activities. Credit earned by one entity cannot be used by another entity. It is observed that both Central Excise registration and Service Tax registration are taken by same legal entity, therefore, despite two different registrations, a single CENVAT Credit account can be maintained.

Holding that the demand cannot be sustained, the appeal was allowed.

In passing: Also see Graphite India Ltd - 2017-TIOL-865-CESTAT-MUM.

(See 2017-TIOL-866-CESTAT-MUM)


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