#Cenvat Credit

CESTAT Chennai ruled that processed milk is an intermediate product, not an exempted final product, so Rule 6 of the CENVAT Credit Rules does not trigger credit reversal. The decision sets aside the tax demand on Lotte India, clarifying that captive consumption of processed milk in confectionery manufacture does not attract CENVAT credit liability.

CESTAT ruled that manufacturers can claim CENVAT credit on duty-paid inputs sourced from units exempt under Notification 01/2010-CE, even for periods before the Rule 12 amendment. The tribunal also rejected the revenue's attempt to invoke an extended limitation period, safeguarding businesses from retroactive credit denial.

CESTAT rules that when common input services are used for both taxable services and non-service investment activities like securities trading, proportionate reversal of CENVAT credit is mandatory. This clarifies a critical boundary in indirect tax compliance for financial institutions and corporate entities with dual-use expenditures, preventing unjustified credit claims on non-taxable activities.

CESTAT Bangalore rules that cenvat credit eligibility depends on classification under Customs Tariff at import, not functional use. Aluminium panels classified under CTH 7610 9090 ineligible for credit.

CESTAT Chennai rules that service tax demands on sub-leased properties and electricity charges are barred by limitation, clarifying legal interpretation standards under Section 73 FA 1994.

CESTAT has ruled that taxpayers could lawfully utilize Cenvat credit to discharge service tax liability under the reverse charge mechanism for imported services prior to July 2012, overturning departmental demands and clarifying a critical ambiguity in pre-GST compliance. This decision protects businesses that relied on existing rules and sets a precedent for retrospective interpretation of credit utilization in indirect tax regimes.

CESTAT Chennai rules that ancillary services like air travel, cab rentals, telecom, insurance, and accommodation directly supporting export of IT services qualify as eligible input services under Rule 2(r) of the Cenvat Credit Rules, 2004. This expands the scope of claimable credits for IT exporters, removing arbitrary disallowances based on perceived lack of direct nexus and aligning with the intent of export promotion under service tax law.

CESTAT Chandigarh rules that Genpact Services LLC, providing BPO services directly to an overseas principal under a single contract, does not qualify as an 'intermediary' under the Place of Provision of Services Rules. The ruling entitles the appellant to Cenvat credit refunds worth ₹14.55 crore, setting a precedent for service exporters with direct overseas contracts.

Taxpayers with centralised registration can claim Cenvat credit using GAR-7 challans even without ISD registration, as CESTAT Chandigarh prioritises substantive entitlement over procedural compliance. This ruling empowers large multi-unit businesses to streamline input tax credit claims without the added burden of separate ISD setup, significantly reducing administrative friction under the erstwhile service tax regime.

CESTAT Kolkata rules that services rendered in India to a foreign recipient qualify as 'export of services' and are exempt from service tax if payment is received in foreign exchange. The ruling sets aside a ₹4.55 crore tax demand, reinforcing that taxability hinges on the recipient’s location, not the place of performance.

CESTAT Kolkata ruled that CENVAT credit on capital goods like tippers is valid if used for taxable services after registration, even if purchased and received earlier. This removes the department’s arbitrary denial of credit based on pre-registration acquisition, empowering service providers to claim rightful input tax credits without being penalized for timing mismatches.

CESTAT Hyderabad rules that service tax paid on leadership fees in consortium turnkey projects qualifies for CENVAT credit, provided the services are not exclusively linked to exempt manufacturing activities and tax was properly discharged under reverse charge. This clarifies the eligibility of indirect service costs in complex infrastructure contracts, impacting consortium-based EPC players nationwide.

CESTAT Hyderabad has ruled that CENVAT credit can be availed on duty-paid capital goods used in manufacturing, even when those goods are owned by a third party under lease and permanently installed in the factory. This clarifies that ownership, not usage or immovability, is not a barrier to credit - a critical win for manufacturers relying on leased infrastructure.

CESTAT Chennai rules that reversal of Cenvat credit nullifies its availment for export service refunds, even if declarations were technically not filed. The ruling clarifies that substantive compliance, not mere procedural lapses, determines refund eligibility under tax exemption notifications.

CESTAT rules that CENVAT credit on services like transportation and crushing of ore remains valid even when up to 15% of material is discarded as waste, as long as the services are directly incidental to the manufacture of final goods. This clarifies that the threshold of material yield does not disqualify input service eligibility under Rule 2(l) of CCR, benefiting mining-integrated manufacturers across steel and mineral industries.