CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH - COURT NO. 2 Central Excise Appeal No. 20051 of 2015 (Arising out of Order-in-Original No. 33&34/2014 dated 30.09.2014 passed by the Commissioner of Central Excise, Bangalore.)

M/s. Kirloskar Toyota Textile Machinery Pvt. Ltd. Plot Nos. 10-13, Phase 2, Jigani Industrial Area, Anekal Taluk, Bangalore – 562 106. ……….Appellant(s)

Versus Commissioner of Central Excise Bangalore – I Commissionerate, C.R. Building, Queen’s Road, Post Box No. 5400, Bangalore – 560 001. ……..Respondent(s)

APPEARANCE:

Mr. T. Suryanarayana, Sr. Advocate for the Appellant.

Mr. M. A. Jithendra, Asst. Commr. (AR) for the Respondent.

CORAM:

HON'BLE MR. P.A. AUGUSTIAN, MEMBER (JUDICIAL)

HON'BLE MR. PULLELA NAGESWARA RAO, MEMBER (TECHNICAL)

Final Order No. 20284 /2026 Date of Hearing: 19.09.2025 Date of Decision: 12.03.2026 PER: P.A. AUGUSTIAN The issue in the present appeal is whether appellant is eligible for CENVAT credit as availed by them.

2. Appellant is manufacturing textile machinery in DTA and also having a 100% EOU unit in Bangalore manufacturing automobile parts classified under CETH 8708 and a trading unit issued with registration.

All the three units are situated in the same compound. During course of investigation, it is found that Appellant had utilized common input services for all the units including 100% EOU Unit and the activity of trading. Thus, alleging that the services on which they have availed input credit do not qualify as input services as per the definition of Rule 2(1) of the CENVAT Credit Rules, 2004, proceedings were initiated and show cause notice dated 07.05.2013 was issued for the period from 2008-09 to 2012-13 up to December and a second show cause notice was issued on 04.02.2014 for the period from January 2013 to December 2013. Thereafter Adjudication Authority as per the impugned order dated 30.09.2014 disallowed the credit and confirmed the duty. Against first Show Cause Notice, Adjudication Authority imposed penalty also. Aggrieved by said order, present appeal is filed.

3. When the appeal came up for hearing, the Learned Sr. Counsel for the Appellant draw our attention to Rule 5 of the CENVAT Credit Rules and Rule 6 of the CENVAT Credit Rules, 2004. As regarding central tax registration, the Learned Sr. Counsel draw our attention to the communication made by them on 08.06.2011 regarding surrender of the service tax registration being used for 100% EOU on the ground that they have received central service tax registration from the Department for the registration and submitted that the CENVAT credit balance in this registration will be clubbed with centralized registration and utilized for payment of tax liability arising on sale of their products and rendering of services from the said premises.

4. The Learned Sr. Counsel further draws our attention to the letter dated 12.07.2011 regarding consolidating central excise and service tax, CENVAT credit balances where they have informed that central tax registration for other two units. Further Learned Sr. Counsel draws our attention to the show cause notice dated 07.05.2013 and submits that entire allegation is made on the ground that appellant has availed CENVAT credit on the strength of the input service invoices addressed to their DTA unit though the services were used commonly in relation to all the three activities viz., the manufacturing activity of DTA unit, manufacturing activity of 100% EOU unit as well as the activities relating to the trading unit. Even demand for extended period confirmed on the ground that irregular availment of input service tax credit came to the notice of the department only during the course of audit and appellant have wilfully contravened the provisions of CENVAT Credit Rules, 2004 with intent to evade payment of duty. In this regard, Learned Sr. Counsel submits that from inception, they have been following the method of centralized billing and accounting system for all the uni