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2019 (9) TMI 1517 - AT - Service TaxCENVAT Credit - Input Service Distributor - whether credit distributed on ISD invoices issued by the said Regional Sales Offices (RSO) of the companies are admissible? - HELD THAT - Since the Department has accepted the admissibility of Cenvat credit of the service tax on input services distributed by the RSOs of the applicants as ISDs for subsequent periods in case of both TSL and TSLD and identical issues are involved in the present appeals, accepting the principle of certainty and consistency in tax matters, it is held that the Cenvat credits availed in all the instant appeals are also legally and correctly availed by the appellants. Consequently, discussion on the other contentions raised by the parties in these appeals would be a mere academic exercise and, hence, not resorted to. Reliance may be placed in the case of M/S. TATA STEEL LTD., M/S. SAIL, DURGAPUR STEEL PLANT AND COMMISSIONER OF CENTRAL EXCISE, BOLPUR VERSUS CCE, JAMSHEDPUR, CCE, BOLPUR AND M/S. SAIL, DURGAPUR STEEL PLANT 2016 (1) TMI 1059 - CESTAT KOLKATA where it was held that Since the department has accepted the admissibility of cenvat credit on rails and railway track materials involving the same assessee, i.e., M/s SAIL, for subsequent period under the CCR, 2004 and identical issue is also involved in M/s Tata Steel s case, therefore, adopting the principle of certainty and consistency in tax matters, the appellants are eligible to credit on rails and railway track materials. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the different regional sales offices (RSOs) of Tata Steel Ltd. (TSL) and Tata Steel Ltd. (Tubes Division) (TSLD) qualify as "Input Service Distributors" (ISD) under the Cenvat Credit Rules, 2004. 2. Whether the credit distributed on ISD invoices issued by the RSOs is admissible. 3. Whether the services in question are "input services" for TSL/TSLD. 4. Whether penalties and interest imposed on TSL/TSLD are valid. Detailed Analysis: Issue 1: Qualification of RSOs as ISD The appellants argued that the RSOs of TSL and TSLD qualify as ISDs under Rule 2(m) of the Cenvat Credit Rules, 2004. The requirements for an ISD are: (a) It must be an office of the manufacturer, (b) The office must receive invoices under Rule 4A of the Service Tax Rules for input services, (c) The office must issue invoices/bills/challans for distributing the credit of service tax paid on the input services to the manufacturer. All these requirements were satisfied by the RSOs, which were registered under the same PAN number and in the name of Tata Steel Limited, allowing them to distribute credit on services rendered. Issue 2: Admissibility of Credit Distributed by RSOs The Commissioner disallowed the Cenvat credit availed by TSL/TSLD, arguing that the services were used in RSOs or by C & F Agents, who are independent service providers. The appellants contended that the RSOs distributed the service tax paid on input services used up to the place of removal, which is permissible under the rules. The RSOs, being offices of TSL/TSLD, distributed the credit correctly. Issue 3: Definition of "Input Services" The appellants argued that the services in question fall within the definition of "input service" under Rule 2(l) of the Cenvat Credit Rules, which includes services used directly or indirectly in the manufacture and clearance of final products. The services availed by RSOs and C & F Agents for managing depots/stockyards were related to the business of manufacturing and selling the final products, thus qualifying as "input services." The Tribunal referred to the Bombay High Court's decision in Commissioner of Central Excise Vs. Ultratech Cement Ltd., which held that the definition of 'input service' is broad and includes services used in relation to business activities. Issue 4: Imposition of Penalties and Interest The appellants argued that there was no contravention of any provisions of the Central Excise Act or the Cenvat Credit Rules, and therefore, the imposition of penalties and interest was untenable. The Tribunal noted that subsequent adjudication orders for similar issues had been accepted by the Department, which concluded that the cenvat credits were legally and validly availed. This acceptance by the Department for subsequent periods reinforced the principle of consistency in tax matters, leading to the conclusion that the credits in the present appeals were also correctly availed. Conclusion: The Tribunal set aside the impugned orders, holding that the Cenvat credits availed by TSL and TSLD were legally and correctly availed. The appeals were allowed, with consequential relief to the appellants. The Tribunal emphasized the principle of certainty and consistency in tax matters, citing the Supreme Court's observations in similar cases. The discussion on other contentions was deemed unnecessary as the primary issue was resolved in favor of the appellants.
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