2026-VIL-562-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Input Service Distributor, Denial of CENVAT credit on input services - Manufacturer of dutiable and exempted goods - Eligibility of CENVAT credit under Rule 6(5) of CENVAT Credit Rules, 2004 - Appellants manufacturers of both dutiable and exempted goods, availed CENVAT credit of service tax paid on various input services, including those services covered under Rule 6(5) of the CENVAT Credit Rules, 2004 - Department denied credit taken on the ground that the appellants did not maintain separate accounts for dutiable and exempted goods, as required under Rule 6(3) of the Rules – Whether the appellants are eligible to avail CENVAT credit on the disputed input services, which are covered under Rule 6(5) of the CCR 2004 - HELD - The disputed input services, such as garden maintenance, car rental, clearing and forwarding, EPABX repairs and maintenance, computer maintenance, software development, and lift maintenance, are covered under the category of "management, maintenance or repair services" specified in Rule 6(5) of the CCR 2004. The Rule 6(5) contains a non-obstante clause, which provides that the restrictions or conditions under Rule 6(3) are not applicable to the services covered under Rule 6(5). Therefore, the appellants are entitled to avail the entire CENVAT credit of service tax paid on the disputed input services, even if they were used for the manufacture of both dutiable and exempted goods - Further, the appellants had already reversed the CENVAT credit on certain disputed services out of abundant caution, which should have been considered by the department under the retrospective amendment made to the CCR 2004 through the Finance Act, 2010 - The impugned order confirming the demand of 10% of the value of exempted goods under Rule 6(3)(b) of the CCR 2004 is not sustainable. The appellants are eligible to avail the CENVAT credit on the disputed input services covered under Rule 6(5) of the CCR 2004 – The impugned order is set aside and the appeal is allowed
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