Custom, Excise & Service Tax Tribunal
Ms Woodward India Private Limited vs Principal Commissioner Central Excise ... on 8 October, 2025
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
REGIONAL BENCH - COURT NO. I
Service Tax Appeal No. 61049 of 2018
[Arising out of Order-in-Appeal No. 71/CE/Appl-II/Delhi/2016 dated 3rd May, 2016
passed by the Commissioner (Appeals), Central Excise, Gurugram, Haryana]
M/s Woodward India Private Limited ......Appellant
12th Floor, Tower-A, Cyber Terraces, Building-5,
DLF City, Phase-III, Gurugram, Haryana-122002
VERSUS
Commissioner of Central Excise, Goods & ......Respondent
Service Tax, Gurugram GST Bhawan, Plot No.36-37, Sector-32, Gurugram, Haryana-122001 APPEARANCE:
Shri Deepak Suneja and Shri Devansh Singhal, Chartered Accountants for the Appellant Shri Anurag Kumar and Shri G.D. Bansal, Authorized Representatives for the Respondent CORAM: HON'BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON'BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL) FINAL ORDER NO.61479/2025 DATE OF HEARING: 23.09.2025 DATE OF DECISION: 08.10.2025 P. ANJANI KUMAR:
M/s Woodward (I) Pvt Ltd, the appellants, are engaged in the manufacture of Locomotive Engine Parts and are also centrally registered for providing certain taxable services; On conduct of an audit, two Show Cause Notices, dated 21.10.2013 and 30.01.2014
2 ST/61049/2018 were issued to the appellants covering the periods 2008-09 to 2011- 12 and 2012-13, respectively. The allegation in the SCNs was that the appellants have paid service tax on the technical know-how and royalty payments, on reverse charge basis, without availing the deduction on account of R & D Cess paid by them, thus resulting in excess availment of CENVAT credit and also that the appellants have availed CENVAT credit on the strength of invoices raised in the name of an unregistered premises. The proposals in the SCNs were confirmed vide OIO dated 02.07.2014 confirming the demand of Rs.46,57,205/- in respect of SCN dated 21.10.2013 and Rs.8,68,372/- in respect of SCN dated 30.01.2014 along with penalties. On an appeal preferred by the appellants, Commissioner (Appeals) upheld the impugned order. Hence, this appeal.
2. Shri Deepak Suneja and Shri Devansh Singhal, Learned Consultants for the appellant submit, on the allegation that the appellants have not availed the abatement of service tax to the extent of R & D Cess paid and thus have availed excess CENVAT credit, that Rule 3(1) of CCR 2004 permits availment of credit of duty paid on inputs and input services and not necessarily the duty payable; the exemption under Notification No.17/2004 is not an absolute exemption but a conditional one and the appellants are not bound to avail the exemption; the situation is revenue neutral as the appellants would be eligible for CENVAT credit of service tax paid on the reverse charge mechanism on the technical know-how and royalty payments and Commissioner (Appeals) vide Order dated 05.04.2015, in a subsequent proceeding, for the year 2013-14 and 3 ST/61049/2018 2014-15, decided the issue in favour of the appellants. He relies on the following cases:
Nirma Ltd. vs. Commissioner of Central Excise and Service Tax, Vadodara-I, (2023) 11 Centax 169 (Tri.-Ahmd) JCT Ltd. vs. Commissioner of C.EX., Ludhiana, 2016 (43) S.T.R. 467 (Tri.-Chan) Kalika Steel Alloys Pvt. Ltd. vs. C.C.E., Cus. & S.T., Aurangabad, 2019 (25) G.S.T.L. 105 (Tri.-
Mum) CCE Chennai-1 Vs. CEGAT Chennai 2006 (202) ELT 753 (SC) CCE Chandigarh Vs. Ranbaxy Labs Ltd., 2006 (203) ELT 213 (P&H) CCE Chandigarh-1 Vs. Swaraj Automobile Ltd. 2002 (139) ELT 504 (P&H) -
ISGEC Unit Dahej vs. Commissioner of Central Excise & Service Tax, Vadodara - II, (2024) 21 Centax 299 (Tri.-Ahmd) Save Industry vs. Commr. of C.EX. & S.T., Coimbatore, 2016 (45) S.T.R. 551 (Tri.-Mad) Deloitte Haskins and Sells v. Commissioner of Central Excise, 2015-TIOL-366-CESTAT-MUM Crown Products Private Limited v. CCE, Nashik, 2012-TIOL-975-CESTAT-MUM Indian Cements Ltd. vs. Commissioner of Central Tax, Tirupati-GST, (2023) 7 Centax 94 (Tri.-Hyd) Commissioner of C.EX., Puducherry vs. Kohinoor Printers Pvt. Ltd., 2015 (321) E.L.T. 448 (Mad.)
3. On the issue of disallowance of credit on account of the invoices being in the name of unregistered premises, learned Consultant submits that the appellants have availed CENVAT credit on the services received from M/s Sell Craft Softech Pvt. Ltd.; the credit pertains to rental services received from the provider in respect of the premises taken on rent by the appellants in Pune for providing taxable services; the details of Pune unit are mentioned in the Form ST-02 submitted for registration; the land owners mentioned the Delhi address of the appellant which is also their 4 ST/61049/2018 registered office; though the agreement is between the registered office of the appellant and the service provider, the agreement and the invoices clearly indicate that the premises taken on rent are for their Pune unit; as the service is received and used for provision of taxable output services, credit cannot be denied. He submits that the non-registration of the recipient is at best a procedural lapse and CENVAT credit cannot be disallowed for that purpose. He relies on the following cases:
Bechtel India Pvt. Ltd. vs. Commissioner of Service Tax, Delhi, (2023) 11 Centax 321 (Tri.-
Chan)
Novozymes South Asia Pvt. Ltd. vs.
Commissioner of C.EX., Bangalore, 2015 (38) S.T.R. 204 (Tri.-Bang) Swaraj Foundry Division vs. Commissioner of C.EX., Chandigarh, 2017 (352) E.L.T. 51 (Tri.-
Chan.) Mangalore Chemicals & Fertilizers Ltd., (2006) ELT 632 (SC)
4. Learned Consultant submits that the demand for the period April 2008 to September 2011 is time barred as extended period was invoked without alleging suppression etc. with intent to evade payment of tax; the appellants entertained a bona fide belief and the issue was raised on account of an audit and therefore, the extended period cannot be invoked. He submits that for the above reason and for the reason that demand itself is not sustainable, penalties under various sections are not imposable. He relies on the following cases:
M/s Vandana Global Ltd. vs Commissioner (Appeals) [2022-VIL-914-DEL-CE].
5 ST/61049/2018 Anand Nishikawa Company Limited v. CCE [(2005) 188 ELT 149- SC] Ercisson India Pvt. Ltd. vs. Commissioner of Service Tax, New Delhi, (2024) 24 Centax 144 (Tri.-Chan.) Punjab Chemicals & Crop Protection Ltd. vs. C.C.E., Chandigarh, 2017 (47) S.T.R. 345 (Tri.- Chand.) Commissioner of Central Excise and Customs vs M/s Reliance Industries Ltd [2023 (7) TMI 196 - SC] Tamil Nadu Housing Board vs CCE [1994 (74) E.L.T. 9 (SC)] Uniworth Textiles Ltd. vs. Commissioner of Central Excise, Raipur, 2013 (288) E.L.T. 161 (S.C.) Collector of Central Excise vs. HMM Limited, 1995 (76) E.L.T. 497 (S.C.) -
Mahanagar Telephone Nigam Ltd vs UOI [2023- VIL-216-DEL-ST] as affirmed by the hon'ble Supreme Court in the case of Union of India vs. Mahanagar Telephone Nigam Ltd., (2024) 15 Centax 285 (S.C.).
G.D Goenka Pvt Ltd v. CCGST [2023-TIOL-782- CESTAT-DEL] Landis + Gyr Ltd. vs CCE [2013 (290) E.L.T. 447 (Tri.-Kolkata)] Hindustan Steel Ltd. Vs. State of Orissa, 1978 (2) ELT J-159 (SC) CCE v. Pepsi Foods Limited [2010 (260) ELT 481] Rajasthan Spinning and Weaving Mills Ltd. vs. CCE [2009 (238) ELT 3 (SC)]
5. Learned Authorized Representative for the Department reiterates the findings of the impugned order.
6. Heard both sides and perused the records of the case. We find that there are two issues involved in the case. The first one being the disallowance of CENVAT credit of excess service tax paid under reverse charge mechanism and the second one being the alleged inadmissibility of credit for the reason that the invoice raised by the service provider was in the name of the premises which is not 6 ST/61049/2018 registered. Learned Counsel for the appellants submits on the first issue that the exemption under Notification No.17/2004 is not an absolute exemption but a conditional one and the appellants are not bound to avail the exemption; the situation is revenue neutral as the appellants would be eligible for CENVAT credit of service tax paid on the reverse charge mechanism on the technical know-how and royalty payments and Commissioner (Appeals) vide Order dated 05.04.2015, in a subsequent proceeding, for the year 2013-14 and 2014-15, decided the issue in favour of the appellants. In view of the Commissioner (Appeals) order and the ratio of the cases cited above, we find that the issue is no longer res integra. We find that in terms of Rule 3(1) of CCR 2004, the appellants are eligible to take CENVAT credit of the duty paid irrespective of the fact as to whether such duty is payable or not. We also find that the appellants cannot be forced to avail an exemption contained in the Notification No.17/2004. We also find that CBEC Circular No.877/15/2008-CX dated 17.11.2008 clarified to the effect that the entire amount of the duty paid by the manufacturer, as shown in the invoice, would be admissible as credit. We find that Hon'ble High Court of P & H in the case of Ranbaxy Labs Ltd. (supra) held that:
3. Brief facts of the case are that the assessee sent certain goods for job work. As per notification, the job worker was exempted from payment of duty. However, still he paid the duty and the assessee had availed Modvat credit thereof on account of payment of such duty by the job worker, claim of which was disallowed by the Commissioner which order was reversed by the Tribunal. It is not disputed that duty, the Modvat credit of which was availed of by the respondent was paid by the job worker even 7 ST/61049/2018 though not required to pay. The respondent has taken the credit of duty, which was actually paid.
We do not dilate much on the issue as this court has earlier dismissed an appeal filed by the revenue raising the similar question of law in C.E.A No. 51 of 2005 titled as Commissioner, Central Excise Commissionerate, Chandigarh v. M/s Punjab Anand Lamp Industries Ltd., Mohali, decided on 4-7-2006.
7. Coming to the second issue of admissibility of CENVAT credit on the strength of the invoices in the name of the unregistered premises. We find that this issue is also covered by the decision of the Tribunal in the case of m-Portal (India) Wireless Solutions Pvt. Ltd. - 2012 (27) STR 134 (Kar.) wherein the Tribunal finds that:
7. Insofar as requirement of registration with the department as a condition precedent for claiming Cenvat credit is concerned, learned counsel appearing for both parties were unable to point out any provision in the Cenvat Credit Rules which impose such restriction. In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitled to the benefit of refund, the three authorities committed a serious error in rejecting the claim for refund on the ground which is not existence in law. Therefore, said finding recorded by the Tribunal as well as by the lower authorities cannot be sustained. Accordingly, it is set aside.
8. That does not mean that the assessee is entitled to refund as claimed by him consequent to setting aside these orders. As is clear from the order of the original authority in the show cause notice, they have categorically called upon the assessee to furnish the particulars of the taxes paid on input services. They called upon the assessee to produce the invoices, bills, receipts to substantiate their claim for their verification. The assessee would be entitled to the refund of the Cenvat credit only on his proof that he has paid input Service tax.
8 ST/61049/2018
8. In view of the above, we find that the impugned order is not maintainable on both the issues as the issues are no longer res integra. Accordingly, we set aside the impugned order and allow the appeal.
(Order pronounced in the open court on 08/10/2025) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK