2011 (9) TMI 353 - AT - Service Tax

Allowability of Cenvat Credit-Services provided in Mumbai office-Head office is at Gurgaon-prima facie view that just because these invoices are in the name of their Mumbai office, while their head office/administrative office is at Gurgaon, the Cenvat credit cannot be denied, as their entire activity was at Mumbai

Summary

Issues: Dispute over admissibility of Cenvat credit based on invoices issued in the name of Mumbai office while administrative office is in Gurgaon. Stay application for waiver of pre-deposit of Cenvat credit demand, interest, and penalty.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the appellant, engaged in the production of T.V. and Radio programs, faced a dispute regarding the admissibility of Cenvat credit amounting to Rs. 7,74,046/- taken during 2007-2008 based on invoices issued in the name of their Mumbai office, despite their administrative office being in Gurgaon. The Additional Commissioner, Central Excise, Delhi IV disallowed the Cenvat credit, a decision upheld by the Commissioner (Appeals), leading to the current appeal. The appellant argued that since the services covered by the invoices were received in Mumbai where their studio is located, the credit should not be denied solely based on the office address. They contended that there is no requirement under the Cenvat Credit Rules, 2004 or the Service Tax Rules, 1994 mandating the service provider's challans to avail credit. The appellant asserted a strong prima facie case and sought a waiver of the pre-deposit requirement for the appeal's hearing, with a stay on recovery until the appeal's disposal.

Upon hearing both sides, the Tribunal noted that the appellant's production activities for T.V. and Radio programs occurred in Mumbai, despite their administrative office being in Gurgaon. The invoices in question pertained to services received by the appellant, leading the Tribunal to opine that the mere difference in office locations should not be a basis for denying Cenvat credit. Consequently, the Tribunal waived the pre-deposit requirement for the Cenvat credit demand, interest, and penalty, allowing the stay application until the appeal's finalization. The Tribunal granted the appellant's stay application, emphasizing the relevance of the service location over the administrative office address in determining Cenvat credit eligibility.