2024-VIL-813-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Rules 7 and 15(1) of Cenvat Credit Rules, 2004 - Disallowance of input service credit - Appellant is engaged in manufacture of Electrostatic Precipitators, Industrial Fans, etc. - Appellant availed input service credit based on invoices issued by their Input Service Distributor (ISD) namely Cost Centres - Department issued show cause notice to Appellant proposing to deny credit availed on input services - After due process of law, Adjudicating authority disallowed credit and confirmed demand along with interest and imposed penalty under Rule 15(1) of the Rules - Whether disallowance of input service credit availed by Appellant based on invoices issued by ISD is sustainable - HELD - Only allegation raised in SCN to disallow input service credit is that Appellant has not established that services availed on invoices distributed by ISD have been used directly or indirectly or in relation to manufacturing of final products - Show cause notice does not make any specific allegation with respect to particular input service - On perusal of impugned order, other than alleging that these services are not used directly or indirectly or in relation to manufacture of final products, there is no specific finding to deny credit - ISDs are subject to verification and audit by jurisdictional authorities - There has been no dispute raised against ISDs alleging that they have availed ineligible credit - There is no allegation that provisions of Rule 7 of the Rules for distribution of credit has not been complied - When there is no dispute raised by jurisdictional authorities against input service distribution centres for availing credit and distributing same, department cannot deny credit at end of manufacturing unit on very vague allegations - Impugned order passed by Adjudicating authority is set aside and the appeal is allowed
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