2026-VIL-315-CESTAT-BLR-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Availing Cenvat Credit on Input Services by availed by another unit - Appellant's Engineering and Design Centre located at Pune entered into a Development Agreement with Toyota Motor Corporation, Japan (TMC) for delivery of drawings and designs for seating systems - The Pune unit raised invoices on TMC towards provision of design and drawing services and discharged service tax. The appellant (Bangalore unit) availed cenvat credit of the service tax paid by the Pune unit on the ground that the designs and drawings were used as 'input service' towards manufacturing seating systems at its Bangalore unit - Whether the appellant was eligible to avail cenvat credit on the service tax paid by the another unit for the design and drawing services provided – HELD - The invoices issued by the Pune unit clearly mentioned that the service tax paid was for services to be used as input service by the Bangalore unit of the appellant. It is not in dispute that the Pune Unit has not availed cenvat credit against the said invoices. The appellant had availed cenvat credit against these two invoices and the value of the drawings and design charges amortized and included in the cost of the component - The appellant had also intimated the Department about availing the cenvat credit through a letter and had also reflected the cenvat credit in their ER-1 returns. The department has not denied receipt of the said letter but only it is contended that it was addressed to service tax authorities and not to the Central Excise authorities - The appellant has not suppressed any fact from the department and hence, the extended period of limitation could not be invoked to confirm the demand - The demand and penalties imposed on the appellant are set aside and the appeal is allowed
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