By TIOL News Service

NEW DELHI, NOV 06, 2017: THE appellant is engaged in the manufacture of tyres falling under Chapter 40 of the CETA, 1985.

During the disputed period, they availed Cenvat Credit of Service Tax paid by the service provideron Business Auxiliary Service.

The department denied the Cenvat Credit on the ground that M.S. Gandola, cannot be considered as input service under Rule 2 (l) of the CCR, 2004.

In appeal before the CESTAT, the appellant submitted that for assembly of M.S. Gandola the service provider has issued the service tax invoice under business auxiliary service and since service tax liability was discharged by the service provider, the same was availed as Cenvat Credit by the appellant; that availment of Cenvat Credit is in conformity with Rule 2 (l) read with Rule 3 ibid.

The AR reiterated the findings recorded in the impugned order.

The Bench observed -

"5. The fact is not under dispute that the appellant had availed the Cenvat Credit based on the valid service tax paid documents issued by the service provider. Since taking of Cenvat Credit is based on valid document and relates to the service for assembling of M.S. Gandola, I am of the view that taking of Cenvat Credit is in conformity with the Cenvat Credit Rules. Thus, Cenvat Credit benefit cannot be denied in questioning non-observance of the procedures contained in Notification No. 214/86 dated 25.03.1986."

Holding that the impugned order is bereft of merits, the same was set aside and the appeal was allowed.

(See 2017-TIOL-3899-CESTAT-DEL)