2024-VIL-1501-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax – Cross-utilisation of CENVAT credit, extended period of limitation – Appellant is engaged in manufacturing winding wire, plastic cable and SS wire, as well as providing turnkey project services and erection and commissioning services – Demand of service tax on the ground that appellant had cross-utilized the CENVAT credit of its manufacturing unit to discharge the service tax liability of its EPC division, which was not permitted under the CENVAT Credit Rules, 2004 – HELD - under the provisions of Rule 3(1) and 3(4) of the CENVAT Credit Rules, 2004, a manufacturer or provider of output service is allowed to take and utilize the CENVAT credit for payment of excise duty or service tax - the Gujarat High Court in Commissioner of C. Ex. & ST., Bhavnagar vs. Pipavav Shipyard Ltd. and the Bombay High Court in Commissioner of Central Excise, Pune-I vs. S.S. Engineers, held that cross-utilization of CENVAT credit is permissible and there is no separate criteria for a manufacturer and an output service provider to avail such credit - the appellant's contention that it had maintained a single CENVAT credit register is accepted and the finding of the Dept that the appellant had first transferred the credit from the EPC division to the manufacturing unit, is rejected - Since the cross-utilization of CENVAT credit is permissible, the question of invoking the extended period of limitation does not arise – the impugned order is set aside and appeal is allowed
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