Woodward Governor India Limited Vs Commissioner of Central Excise-Delhi (CESTAT Chandigarh)
CESTAT Chandigarh held that before 01.04.2011 it was not open to the appellants to avail CENVAT credit paid on input services and utilized for provision of exempted services or trading goods.
Facts- The appellants are engaged in manufacture and trading of Control Panels equipment etc. In the course of an Audit conducted, Department noticed that the appellants have been using the input services in connection with the trading of the goods in addition to the manufacture; such inputs do not qualify themselves to be called Input Services in terms of Rule 2(l) of CENVAT Credit Rules, 2004 and as such the appellants have wrongly availed CENVAT credit on trading activity and the same is recoverable under the provisions of Rule 14 of CENVAT Credit Rules, 2004.
Five different SCNs were issued periodically from April 2004 to March 2011 and the same were confirmed by the Commissioner of Central Excise confirming the recovery of wrongly availed credit along with interest; penalty under Rule 15(2) was also imposed. Therefore, the appellants has preferred the present appeals.
Conclusion- We find that Hon’ble Supreme Court in the case of Lally Automobiles Ltd. Vs Commissioner, 2019 (24) GSTL J115 (SC) has set to rest the controversy by deciding that CENVAT credit is not admissible on input services attributable to trading activity.
Held that before 01.04.2011 it was not open to the appellants to avail CENVAT credit paid on input services and utilized for provision of exempted services or trading goods.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
Heard both sides and perused the records of the case.
2. Brief facts of the case are that the appellants are engaged in manufacture and trading of Control Panels equipment etc; the appellants were availing CENVAT credit of the duties and taxes paid on inputs and input services. In the course of an Audit conducted, Department noticed that the appellants have been using the input services in connection with the trading of the goods in addition to the manufacture; such inputs do not qualify themselves to be called Input Services in terms of Rule 2(l) of CENVAT Credit Rules, 2004 and as such the appellants have wrongly availed CENVAT credit on trading activity and the same is recoverable under the provisions of Rule 14 of CENVAT Credit Rules, 2004. Five different SCNs were issued periodically from April 2004 to March 2011 and the same were confirmed by the Commissioner of Central Excise confirming the recovery of wrongly availed credit along with interest; penalty under Rule 15(2) was also imposed. Therefore, the appellants are before us.
