CESTAT, NEW DELHI BENCH
Global Digital Color Lab
Commissioner of Central Excise I, Jaipur-I
FINAL ORDER NOS. 827-828/2012-SM(BR)
APPEAL NOS. ST/1265-1266 OF 2011-SM
JUNE 20, 2012
1. In this proceeding two appeals filed by the same assessee in respect of the same issue are being considered. The appellant was setting up a colour photo lab during December 2005 and January 2006. They imported required machines on 18.12.2005. They also applied for registration as service provider even before receipt of the machines. They finally got registration on 2.1.2006. After getting registration they took 50% of the duty paid on the imported machine for the first financial year. The issue in first appeal is about such credit taken before getting registration certificate. In the next financial year Cenvat credit of balance 50% was taken. The issue involved in the second appeal is about such credit.
2. Revenue made out a case that the appellant could not have taken Cenvat credit of countervailing duty paid on machines imported prior to the date on which service tax registration was granted. Based on such reasoning Revenue has initiated proceedings for denying Cenvat credit along with interest and penalty, which has been confirmed by lower authorities with interest and penalty.
3. Ld. Counsel for appellant submits that they need to take service tax registration only when they were ready for providing the service. For getting ready to provide service they had to procure necessary machines. There is nothing in the Cenvat credit rules to say that credit has to be taken within any specified period from the date of procurement of the machine. They have taken Cenvat credit only after applying for registration. The fact that they were not granted service tax registration in time cannot be a reason to deny the Cenvat credit.
4. Ld. A.R has not been able to point out any provisions to the effect that Cenvat credit cannot be taken on machine procured prior to the date of issue of registration certificate. The argument of the lower authorities seems to be that the credit entries in the register for taking credit should not have been earlier than the date of granting of registration. There is nothing in the rules prohibiting a person from maintaining proper account. There is no statutory record presently prescribed like “RG-23” as was earlier in force. The business records maintained correctly reflecting the position has to be accepted. I do not find any merit in the argument adopted by the lower authorities. Therefore, I set aside the impugned orders of lower authorities in both the appeals and allow the appeals.