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2018 (6) TMI 862 - AT - Central ExciseCENVAT credit - input services received and used elsewhere other than the appellant s premises - Rule 2 (l) of the CCR, 2004 - Held that - Reliance placed in appellant own case MURUGAPPA MORGAN THERMAL CERAMICS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, CHENNAI-III 2017 (2) TMI 15 - CESTAT CHENNAI , where it was held that Non-registration as ISD should not deprive the assessee of substantial benefit of credit - matter back to the original authority for denovo consideration - appeal allowed by way of remand.
Issues: Denial of Cenvat credit on input services availed for rent paid in respect of head office.
In the judgment by the Appellate Tribunal CESTAT CHENNAI, the appellant, a manufacturer of Ceramic Fibre products, availed Cenvat credit on inputs, capital goods, and input services. The department alleged that the appellant was availing credit of service tax paid on input services not used at their manufacturing unit but for renting immovable property for their Head Office. The department relied on Rule 2(l) of the CCR, 2004, stating that credit can only be taken on input services received at the manufacturer's premises. A show-cause notice was issued for recovery of irregular service tax credit, interest, and penalty. The original authority and Commissioner (Appeals) upheld the notice, leading to the current appeal. During the proceedings, the appellant's counsel argued that the lack of ISD registration was a procedural lapse and should not deny them substantial benefit. They cited a previous Tribunal decision in their favor on a similar issue. The department's representative highlighted the appellant's trading activities and questioned the proportion of service attributable to trading. The Tribunal examined the dispute over denial of Cenvat credit on input services for rent paid for the head office. Referring to a previous Tribunal decision, it was held that non-registration as ISD should not deprive the appellant of credit benefits. The Tribunal remanded the matter back to the original authority for reevaluation in line with the previous decision, emphasizing that procedural lapses should not lead to credit denial. The judgment followed the precedent set by earlier Tribunal decisions and directed a relook into the issue, setting aside the penalty due to the credit eligibility.
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