2017 (7) TMI 636 - AT - Central Excise

CENVAT credit - input service distributor - it was alleged that the branch sales office (ISD) has not filed proper returns, showing the distribution of cenvat credit to Bhilai Steel Plant - Held that - Non-filing of the return in the proper format is a procedural lapse, for which the substantive right to distribute the credit and subsequent availment thereof by the manufacturing unit cannot be denied. GTA services - denial on the ground that GTA services were utilized by the appellants for transportation of goods beyond the place of removal - Held that - the Hon ble Karnataka High Court in the case of Stanzen Toyotetsu India (P) Ltd. 2011 (4) TMI 201 - KARNATAKA HIGH COURT held that such services availed for workers to reach factory premises in time, has the direct bearing on the manufacturing activity - Since the period involved in this case is prior to the amendment of the definition of input service, the credit taken on rent-a-cab service should also be available to the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Proper filing of returns by the branch sales office
- Denial of cenvat credit on GTA and rent-a-cab services
- Nexus of rent-a-cab service with manufacturing activity

Analysis:
- The appeals challenged an order by the Commissioner, Central Excise, Raipur regarding the distribution of cenvat credit by a branch sales office to a manufacturing unit. The Department alleged improper returns and utilization of GTA and rent-a-cab services, leading to confirmed demands for certain periods.
- The appellant argued that the service tax payments and utilization of services were not in dispute, and the ISD (branch sales office) was registered with valid documents. The advocate cited relevant judgments supporting the nexus of rent-a-cab services to manufacturing activities.
- The Revenue reiterated the findings of the impugned order, leading to a hearing where both sides presented their arguments.
- Upon review, the Tribunal found that the Department did not contest the service tax payments and utilization by the appellant. The ISD was registered for distributing taxable services, and non-filing of returns should not deny cenvat credit. Regarding rent-a-cab services, citing a Karnataka High Court judgment, the Tribunal concluded that such services directly impact manufacturing activities.
- Consequently, the Tribunal found no merit in the impugned order, setting it aside and allowing the appeals in favor of the appellant.