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October 2011

(2011) 23 STR 265 (Tri.-Chennai) — Commissioner of Central Excise, Coimbatore v. Lakshmi Technology & Engineering Indus Ltd.

By Puloma Dalal, Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Cenvat credit — Renting of immovable property services provided by manufacturer of excisable goods — Manufacturer used credit from a common pool of excise, customs and service tax —Rule permit taking of such credit under a common pool and permit use of such credit for different purposes and thus the utilisation held valid.

Facts:
The assessee, a manufacturer of satellite components and aircraft components, also provided service of renting of immovable property. They used the credit in Cenvat account for paying excise duty on the goods cleared by them and also for paying service tax on service rendered under the category of Renting of Immovable Property. SCN was issued alleging that capital goods, inputs and input services on which credit was taken had no nexus with the renting of property service and thus Cenvat credit could not be utilised by them and demanded service tax accordingly along with interest and penalty.

Held:
It was held that a manufacturer of excisable goods is entitled to use the credit from a common pool to which different categories of specified excise duties, customs duty and service tax are allowed to be taken of.

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