9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 927 - AT - Service TaxCENVAT Credit - non-registered premises - denial on the ground that the different branches of the appellant that had not registered were not entitled to avail of CENVAT credit - Held that - The branches, admittedly, were rendering services on behalf of the principal establishment in the absence of a contrary finding in the adjudication order or an allegation in the show-cause notice. There is nothing on record to indicate that tax liability was not being discharged on the taxable activity. There is no finding that the services procured were not used in the rendering of service - there is no reason to presume that the transfer of credit in accordance with the practice of centralized billing was violative of the provision for utilization of credit - appeal allowed - decided in favor of appellant.
Issues:
Confirmation of demand for allegedly wrongly availed CENVAT credit against invoices from unregistered branches, entitlement to CENVAT credit for input services at unregistered premises, non-compliance with Service Tax Rules and CENVAT Credit Rules, applicability of previous court decisions, availment of CENVAT credit at principal establishment. Analysis: The dispute in this case revolves around the confirmation of demand amounting to ?40,70,231 for the years 2008-2009 and 2009-2010, concerning the alleged wrongful availing of CENVAT credit at the principal establishment. The appellant, M/s. IOT (D&E) Pvt Ltd, had only one registered premises but had availed input services at various unregistered branches. The Commissioner held against the appellant, stating that the unregistered branches were not entitled to claim CENVAT credit for taxes paid on input services, and thus, transferring this credit to the principal establishment was deemed incorrect in law. The appellant argued that they initially registered their principal premise but did not obtain central registration for the branches until 2012. They contended that all output services were billed from the registered premises, and there was no failure to discharge tax liability on output services. The appellant viewed the failure to register the branches as a procedural impediment rather than a substantive non-compliance issue. The issue was further debated regarding the compliance with Service Tax Rules and CENVAT Credit Rules. The Authorized Representative emphasized the importance of central registration privilege and compliance with CENVAT Credit Rules, citing a judgment by the Hon'ble High Court of Madras. However, the appellant pointed out that the facts of the present case did not align with the case referred to by the Authorized Representative. In considering the impugned order and relevant legal precedents, the Tribunal observed that the crux of the matter was the availment of CENVAT credit by the appellant at the principal establishment, despite receiving inputs and input services at unregistered premises. The Tribunal noted that the branches were operating on behalf of the principal establishment, and there was no evidence to suggest non-payment of tax liability or misuse of services procured. As a result, the Tribunal found no violation in the transfer of credit as per the centralised billing practice and set aside the impugned order, allowing the appeal. In conclusion, the Tribunal ruled in favor of the appellant, emphasizing that the transfer of CENVAT credit from unregistered branches to the principal establishment was justified based on the operational setup and absence of any non-compliance issues regarding tax liabilities or service usage.
|
