2017 (9) TMI 412 - AT - Central Excise

CENVAT credit - rental of premises taken for business, which have not been included in the registration certificate of the appellant for the period 2008-09 and 2009-10 - Held that - the said premises have been used for business and also subsequently, included in the Registration certificate - matter remanded to the adjudicating authority to allow the CENVAT credit subject to satisfaction that the premises in question have been included in the GST Registration certificate of the appellant. Penalty - Held that - the transaction is recorded in the books of accounts ordinarily maintained by the appellant. It is case of only a venial breach of the provisions - penalty set aside. Appeal allowed by way of remand.

Summary

Issues:
Allowance of CENVAT credit on rental of premises not included in registration certificate for the period 2008-09 and 2009-10.

Analysis:
The appellant, a manufacturer of telecom apparatus parts, was issued a show cause notice for taking CENVAT Credit on input invoices for office premises not included in their Central Excise Registration certificate. The notice alleged suppression of facts and invoked the extended period of limitation. The Order-in-Original confirmed a demand of ?41,971 along with a penalty. The appellant contended in appeal that a previous notice on a similar matter barred the subsequent notice for the period in question. They argued that the services were used in the business, and the technical breach should not disallow credit. The Commissioner rejected the appeal citing failure to explain the address discrepancy and distinguished the previous notice.

The appellant appealed to the Tribunal, explaining that additional premises were taken due to business expansion, storing raw materials and finished products. They claimed continuous use of the premises for business, which was later included in the GST Registration certificate. Referring to a precedent decision, the appellant argued for the credit on rent. The Tribunal noted that the appellant contested only the credit for rent on premises not in the registration certificate. The appeal was allowed in part, remanding the matter to allow credit for the rent subject to premises inclusion in the GST certificate. The penalty was set aside due to the minor breach.

The Revenue relied on the impugned order, contending lack of proper evidence. The Tribunal considered the arguments and allowed the appeal in part, directing the appellant to appear before the Adjudicating Authority with supporting documents for further proceedings.