2019 (2) TMI 875 - AT - Service Tax

Refund of CENVAT Credit - duty paying documents - invoices which are issued in the name of the premises other then the registered premises of the Appellant - Held that - In the absence of a statutory provision which prescribes that registration is mandatory and that if such a registration is not made the assessee is not entitle to the benefit of refund, both the authorities below have committed an error in rejecting the claim for refund on the ground which is not existence in law. There is no doubt that it is a beneficial provision and it is settled legal principle that any beneficial provision should be interpreted liberally. There is no dispute that lapse is there on the part of the Appellant but it is merely procedural lapse and due to that substantive benefit of Cenvat Credit cannot be denied to the Appellant - Rule 14 of the Cenvat Credit Rules, 2004 provides for recovery of Cenvat credit wrongly taken. The Appellant is entitle for input credit, therefore the said Rule 14 is not applicable on the facts of the case. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Entitlement to avail input credit on invoices issued for premises other than the registered premises.

Analysis:

1. The issue in question was whether the appellant could claim input credit on invoices issued for premises other than the registered one. The appellant, engaged in information technology services, availed Cenvat credit on input services related to immovable property renting for premises in Andheri and New Delhi, apart from the registered office in Bandra. The authorities disallowed the credit due to the invoices being in the name of unregistered premises. The appellant argued that the procedural lapse of not registering the other premises should not deny substantive benefit, citing a Karnataka High Court decision. The authorities erred in considering centralized registration or Input Service Distributor registration mandatory, beyond the show cause notice's scope. The Tribunal referred to precedents emphasizing that registration is not a prerequisite for claiming Cenvat credit, allowing the input credit claim.

2. The Tribunal highlighted the Karnataka High Court's decision that registration is not mandatory for claiming Cenvat credit. Rulings from the Tribunal and High Court supported the appellant's position, emphasizing that the absence of registration should not bar credit entitlement. The Tribunal emphasized a liberal interpretation of beneficial provisions and differentiated between substantive and procedural lapses. The Tribunal found the rejection of refund based on non-registration to be erroneous, as there was no statutory requirement for registration to claim Cenvat credit. The Tribunal set aside the lower authorities' decision and allowed the appeal, emphasizing that the appellant was entitled to input credit despite the procedural lapse of non-registration of certain premises.

3. The Tribunal's decision was further affirmed by the High Court, reinforcing the principle that registration is not a prerequisite for claiming Cenvat credit. The Tribunal and High Court decisions emphasized that substantive benefits should not be denied due to procedural lapses like non-registration of premises. The Tribunal's ruling was based on legal principles that beneficial provisions should be liberally interpreted, and conditions should be differentiated based on their substantive or procedural nature. The Tribunal's decision highlighted that the denial of refund based on non-registration was unfounded, as there was no legal requirement for registration to claim input credit. The Tribunal's decision to allow the input credit claim was based on legal precedents and a liberal interpretation of beneficial provisions.