Cenvat Credit of common input services if availed only in one unit can’t be held incorrect or illegal: CESTAT

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Cenvat credit of Service Tax - Distribution of credit

Case Details: Piramal Glass (P.) Ltd. v. CCE & ST, Surat-I - [2021] 132 taxmann.com 64 (Ahmedabad - CESTAT)

Judiciary and Counsel Details

    • Ramesh Nair, Judicial Member
    • Mehul Jivani, CA for the Appellant. 
    • J.A. Patel, Superintendent (AR) for the Respondent.

Facts of the Case

The appellant had two units, one at Koshamba and other at Jambusar. It had taken the Cenvat Credit in respect of common input services in its factory at Koshamba Unit. The department alleged that since the common input services were used for both the units, the Koshamba Unit was not entitled for Cenvat Credit in respect of portion of the service attributed to Jambushar Unit. Accordingly, the proportionate credit was denied; and therefore, the appellant filed the appeal.

CESTAT Held

The honorable CESTAT observed that there was no dispute in the facts of the case that the common input service was attributed to both the units Koshamba Unit as well as Jambusar Unit and credit was taken in one unit i.e. at Koshamba Unit. As per Rule 7 of the Cenvat Credit Rules, 2004, the option was available to the assessee whether to distribute the Cenvat credit or not. Therefore even if the appellant availed the Cenvat Credit in respect of common input service in one unit only, the same was not incorrect or illegal.

List of Cases Referred to

    • CCE v. Oerlikon Balzers Coating India (P.) Ltd. [2019] 101 taxmann.com 251 (Bom.) (para 2)
    • Gloster Cables Ltd. v. CCE 2018 (363) ELT 1197 (Trib. – Hyd.) (para 2)
    • Doshion Ltd. v. CCE 2013 (288) ELT 291 (Trib. – Ahd.) (para 2)
    • CCE v. Dashion Ltd. [2016] 66 taxmann.com 31/54 GST 32 (Guj.) (para 2)
    • Greaves Cotton Ltd. v. CCE [Final order Nos. 40474-40476 of 2014, dated 8-8-2014] (para 2)
    • Raymond Ltd. v. CCE [Final order No. 54085 of 2015, dated 18-9-2015] (para 2)
    • Rajasthan Patrika (P.) Ltd. v. CCE & CGST [2020] 34 GSTL 226 (Trib. – Delhi) (para 2)
    • CCE & C v. Indeos ABS Ltd. 2010 (254) ELT 628 (Guj.) (para 2)
    • Hindustan Zinc Ltd. v. Commissioner of CGST 2019 (370) ELT 1582 (Trib. – Delhi) (para 2)
    • Mahindra & Mahindra Ltd. v. CCE 2019 (368) ELT 105 (Trib. – Mum.) (para 2)
    • Nirlon Ltd. v. CCE [2015] 58 taxmann.com 28/51 GST 177 (SC) (para 2)
    • Continental Foundation Jt. Venture v. CCE 2007 taxmann.com 532 (SC) [Para 2]

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