CESTAT Allows CENVAT Credit on C&F Agent, Office Rent & AMC Services

Good Year India Ltd Vs Commissioner of Central Excise (CESTAT Chandigarh)

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, considered an appeal against Order-in-Original No. 07/KKK/COMMR/ADJN/FBD-I/2015-16 dated 16.06.2015 passed by the Principal Commissioner, Central Excise & Service Tax, Faridabad-I. The impugned order denied CENVAT credit of ₹53,99,123 under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 in respect of C&F Agent services, rent of office/godown after sale, and annual maintenance contracts (AMC) of computers and air conditioners. Interest was also demanded under Rule 14 of the CENVAT Credit Rules read with Section 11AA of the Act, and a penalty of ₹7,00,000 was imposed under Rule 15(1) of the CENVAT Credit Rules.

The appellant manufactures tyres and, during the period 2013-2014, availed CENVAT credit on inputs, capital goods and various input services. The Department alleged that CENVAT credit had been wrongly availed on C&F Agent services amounting to ₹33,35,634, renting of office/godown services amounting to ₹20,27,615, and AMC of computers and air conditioners amounting to ₹35,874. A show cause notice dated 05.05.2014 was issued, and the Commissioner confirmed the proposed demand along with interest and penalty.

The appellant contended that the issue had already been decided in its favour by the Tribunal for the previous period and by the Departmental Authority for the subsequent period in its own cases. It relied on Final Order No. 60572-60573/2024 dated 04.10.2024 covering the period from December 2005 to May 2011 and Order-in-Original No. 18-19/16-17/Commr./YG/FBD-I/2016-17 dated 27.07.2016 covering the subsequent period 2014-15 and 2015-16. The appellant submitted that no appeals had been filed by the Department against those orders, as evidenced by the RTI reply furnished by the CPIO regarding the order dated 27.07.2016, and therefore those decisions had attained finality. It further argued that the Department could not adopt a contrary stand on the same issue for the same assessee. The appellant also submitted that the disputed services were used in relation to the manufacture of the final products and, therefore, CENVAT credit had been correctly availed. It further submitted that once the demand itself was unsustainable, interest and penalty could not survive.

The Departmental Representative reiterated the findings contained in the impugned order.

After considering the submissions and examining the records, the Tribunal observed that the issue was no longer res integra. It noted that both the Tribunal and the Departmental Authority had already decided the identical issue in favour of the appellant for the earlier and subsequent periods. The Tribunal further observed that the Department had not challenged those orders and that they had attained finality, as evidenced by the RTI reply regarding the status of the order dated 27.07.2016. The Tribunal held that the Department could not take a contrary view on the same issue in the case of the same assessee.

Following the earlier decisions relied upon by the appellant, the Tribunal concluded that the impugned order was not sustainable in law. It set aside the order and allowed the appeal with consequential relief, if any, in accordance with law.

Cases Discussed

• Indian Terrain Fashions Limited Vs Commr of CGST & CE, Chennai, 2025 (4) TMI 1285 CESTAT Chennai
• Final Order No. 60572-60573/2024 dated 04.10.2024 = 2024 (10) TMI 287 CESTAT Chandigarh
• CCE, Pune-II vs. S S Engineers (Supreme Court), 2023 (386) ELT 192 (SC)
• Rosmerta Technologies Ltd vs. CCE & ST, LTU Delhi (Supreme Court), 2023 (385) ELT 808 (SC)
• Evonik Speciality Silica India Pvt Ltd Vs CCE & ST, Surat-II, 2023 (11) TMI 261 CESTAT Ahmedabad
• Carrier Air Conditioning & Refrigeration Ltd vs. CCE, Delhi-III, 2023 (4) TMI 870 CESTAT Chandigarh
• Liladhar Pasoo Forwarders Pvt Ltd Vs C.S.T. Ahmedabad, Final Order No. A/11238/2023 dated 12.06.2023
• M/s JSW Steel Ltd Vs Commissioner of Central Excise, Customs and Service Tax, Belgaum (Vice-Versa), 2021 (12) TMI 381 CESTAT Bangalore
• M/s Steel Authority of India Ltd. Vs Commissioner of Customs and Central Excise, Raipur, 2019-TIOL-3280-CESTAT-DEL
• Cantabil Retail India Ltd. Vs Commissioner of Central Excise, Delhi-I, 2018 (17) G.S.T.L. 275 (Tri. – Del.)
• Commissioner of Central Excise Vs Manglam Cement Ltd., 2018 (9) G.S.T.L. 17 (Raj.)
• Commissioner of Central Excise Vs Manglam Cement Ltd. (Supreme Court), 2018 (16) G.S.T.L. J168 (S.C.)
• Commissioner of C. Ex., Jaipur Vs Shree Cement Ltd., 2017 (11) TMI 1408 Rajasthan High Court
• Sundaram Clayton Ltd. Vs Commissioner of C. Ex., Chennai-II, 2016 (42) S.T.R. 741 (Tri.-Chennai)
• Barmalt (India) Pvt. Ltd. Vs Commissioner of C. Ex., Delhi-III, 2015 (38) S.T.R. 882 (Tri. – Del.)
• Metro Shoes Pvt Ltd Vs CCE, Mumbai-I, 2008 (10) S.T.R. 382 (Tri. Mumbai)
• Metro Shoes Pvt Ltd Vs CCE, Mumbai-I (Bombay High Court), 2012 (28) STR J19 (Bom.)
• Ambuja Cements Ltd. Vs Union Of India (Punjab & Haryana High Court), 2009 (236) E.L.T. 431 (P&H)

FULL TEXT OF THE CESTAT CHANDIGARH ORDER

The present appeal is directed against the impugned Order-in-Original No. 07/KKK/COMMR/ADJN/FBD-I/2015-16 dated 16.06.2015 passed by the Pr. Commissioner, C. EX. & S.T., Faridabad-I, whereby the learned Commissioner has confirmed the demand of Rs.53,99,123/- under Rule 14 of the Cenvat Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944 by denying the CENVAT Credit availed on input services namely C&F Agents, Rent of Office/Godown after sale and AMC of computers and air conditioners, along with interest under Rule 14 of the Credit Rules read with Section 11AA of the Act and penalty of Rs.7,00,000/- under Rule 15(1) of the Credit Rules.

2. Briefly stated facts of the present case are that the Appellant is engaged in manufacture of tyres. During the relevant period, i.e. 2013-2014, the Appellant availed the CENVAT Credit of duty paid on inputs and capital goods and service tax paid on various input services. The allegation of the department is that the Appellant has wrongly availed the CENVAT Credit of service tax paid on the services of C&F Agents, Rent of Office/Godown after sale and AMC of computers and air conditioners. On this allegation, a SCN dated 05.05.2014 was issued to the appellant. After following the due process, the learned Commissioner vide the impugned Order-in-Original, has confirmed the entire demand against the Appellant along with interest and penalty as proposed in the said SCN. Bifurcation of the services along with amount is given herein below:

Aggrieved by the said Order-in-Original, the Appellant has preferred the present appeal before us.

3. Heard both the sides and perused the material on records.

4. The learned Counsel for the Appellant submits that the impugned order is not sustainable in law as the same has been passed without following the precedent decisions in Appellant’s own cases for the previous period and subsequent period.

4.1 She further submits that the issue involved in the present case has already been decided by the Tribunal as well as by the Departmental Authority in favour of the Appellant for the previous as well as subsequent periods in Appellant’s own cases. In this regard, she relies on the following Orders passed by the Tribunal and the Departmental Authority in Appellants’ favour on the identical issue:

4.2 She further submits that the department has not filed any appeal against the above-cited Orders, which is evident from the RTI rely provided by the CPIO in respect of the status of the Order dated 27.07.2016; hence, the department has accepted that the Appellant has correctly availed the CENVAT Credit in respect of the impugned services and accordingly, the said Orders have attained finality.

4.3 She also submits that the department deviated from its stand while passing the impugned order confirming the demand on the same issue against the Appellant. She also submits that it is a settled law that the department cannot take contrary stands on the same issue for the same assessee. For this, she places reliance on the following decisions:

• CCE, Pune-II vs. S S Engineers – 2023 (386) ELT 192 (SC)
• Rosmerta Technologies Ltd vs. CCE & ST, LTU Delhi – 2020-TIOL-916-CESTAT-CHD, affirmed by Hon’ble Supreme Court – 2023 (385) ELT 808 (SC)
• Carrier Air Conditioning & Refrigeration Ltd vs. CCE, Delhi-III – 2023 (4) TMI 870-CESTAT-Chandigarh

4.4 She further submits that the Appellant has correctly availed the CEVNAT Credit on the impugned services because all these services are used in relation to manufacturing of the final products. In support of her submission, she places reliance on the following decisions in respect of availment of CENVAT Credit for each of the impugned services:

Regarding C&F Agents services:

• Ambuja Cements Ltd. Vs Union Of India – 2009 (236) E.L.T. 431 (P&H)
• Metro Shoes Pvt Ltd Vs CCE, Mumbai-I – 2008 (10) S.T.R. 382 (Tri. Mumbai), affirmed by Hon’ble Bombay High Court – 2012 (28) STR J19 (Bom.)
• Commissioner of Central Excise Vs Manglam Cement Ltd. – 2018 (9) G.S.T.L. 17 (Raj.), maintained by the Hon’ble Supreme Court – 2018 (16) G.S.T.L. J168 (S.C.)
• Commissioner of C. Ex., Jaipur Vs Shree Cement Ltd – 2017 (11) TMI 1408 Rajasthan High Court
• M/s JSW Steel Ltd Vs Commissioner of Central Excise, Customs and Service Tax, Belgaum (Vice-Versa) – 2021 (12) TMI 381 CESTAT Bangalore
• Sundaram Clayton Ltd. Vs Commissioner of C. Ex., Chennai-II – 2016 (42) S.T.R. 741 (Tri.-Chennai)

Regarding Rent of Office/Godown after sale:

• Indian Terrain Fashions Limited Vs Commr of CGST & CE, Chennai – 2025 (4) TMI 1285 CESTAT Chennai
• Evonik Speciality Silica India Pvt Ltd Vs CCE & ST, Surat-II – 2023 (11) TMI 261 CESTAT Ahmedabad
• Barmalt (India) Pvt. Ltd. Vs Commissioner of C. Ex., Delhi-III – 2015 (38) S.T.R. 882 (Tri. – Del.)
• Cantabil Retail India Ltd. Vs Commissioner of Central Excise, Delhi- I – 2018 (17) G.S.T.L. 275 (Tri. – Del.)

Regarding AMC of Computers and Air-conditioners:

• M/s JSW Steel Ltd (supra)
• Liladhar Pasoo Forwarders Pvt Ltd Vs C.S.T. Ahmedabad vide Final Order No. A/11238/2023 dated 12.06.2023
• M/s Steel Authority of India Ltd. Vs Commissioner of Customs and Central Excise, Raipur – 2019-TIOL-3280-CESTAT-DEL

4.5 As regards interest and penalty, she submits that when the demand itself is not sustainable, the question of interest and penalty does not arise.

5. On the other hand, the learned Authorized Representative for the department reiterates the findings of the impugned order.

6. We have considered the submissions made by both the parties and perused the material on record and have gone through the case-laws cited by the Appellant. We find that the issue involved in the present appeal is no longer res integra as the Tribunal as well as the Departmental Authority, for the earlier and the subsequent periods, have decided the issue in favour the Appellant vide the Orders as cited in table (in para 4.1 above). Further, we note that the department has not filed any appeal against the above-mentioned Orders, therefore, the said Orders have attained finality, which is evident from the RTI rely provided by the CPIO in respect of the status of the Order dated 27.07.2016. Therefore, we hold that the department cannot take contrary view on the same issue for the same assessee as held in the cases cited supra.

7. Since, the issue is squarely covered in favour of the Appellant by the decisions cited supra, therefore, by following the ratio of above cited decisions, we are of the considered view that the impugned order is not sustainable in law and is liable to be set aside and we do so by allowing the appeal of the Appellant with consequential relief, if any, as per law.

(Operative part of the order pronounced in the open court)