2019 (7) TMI 1778 - AT - Service Tax

CENVAT Credit - input services - Banking and other Financial Services - credit denied on a new ground that the appellant is not registered as an ISD for availing the cenvat credit at their Head Office - HELD THAT - Similar issue arose before this Tribunal in appellant s own case regarding cenvat credit with respect to Banking and other Financial Services in M/S SECURE METERS LTD. VERSUS CCE, JAIPUR-II 2017 (5) TMI 44 - CESTAT NEW DELHI , where a coordinate Bench of this Tribunal has held that the appellant have rightly availed the cenvat credit in the similar facts and circumstances, allowing their appeal. Further, the impugned order-in-appeal is also not sustainable as the Commissioner (Appeals) have erred in not taking notice of the admitted fact on record of the Department that the appellant is registered as an ISD, and hence entitled to cenvat credit of common input services. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Availing cenvat credit for services received by other entities
2. Interpretation of Rule 3 of Cenvat Credit Rules
3. Disallowance and recovery of cenvat credit
4. Adjudication order-in-original and penalty imposition
5. Appeal before the learned Commissioner (Appeals)
6. Lack of evidence for availing cenvat credit in accordance with statutory provisions
7. Disallowance of credit upheld by the Commissioner (Appeals)
8. Appellant not registered as an Input Service Distributor (ISD)
9. Tribunal's consideration of similar issue in the appellant's previous case
10. Commissioner (Appeals) error in not acknowledging appellant's ISD registration

Detailed Analysis:
1. The case involved the appellant, a manufacturer of Energy Meters & Components, availing cenvat credit for services received by other entities within the group, contrary to Rule 3 of Cenvat Credit Rules. The Revenue contended that the credit was wrongly availed and liable for disallowance and recovery.
2. The interpretation of Rule 3 of Cenvat Credit Rules was crucial, as it allows manufacturers to take credit only for services received by them. The Revenue argued that the appellant availed credit for services received by other units, which was not permissible under the rule.
3. The adjudication order-in-original confirmed the demand with interest and imposed a penalty under Rule 15 of Cenvat Credit Rules. The Commissioner observed the appellant's past credit reversal and non-credit availing for certain periods, emphasizing the irregularity in availing the credit.
4. The appellant appealed before the Commissioner (Appeals), who upheld the disallowance of credit, citing the lack of evidence that the credit was availed in accordance with statutory provisions.
5. The appellant challenged the decision, arguing that the invoices related only to their company and that they were registered as an ISD, thus entitled to the credit.
6. The Tribunal considered a similar issue in the appellant's previous case and found in favor of the appellant, allowing the appeal. The Tribunal noted the error of the Commissioner (Appeals) in not recognizing the appellant's ISD registration and set aside the impugned order.
7. The Tribunal's decision highlighted the importance of complying with statutory provisions for availing cenvat credit and the necessity of proper documentation to support credit claims.