2019 (6) TMI 318 - AT - Central Excise

CENVAT Credit - taxable as well as exempt services - Rule 6(3)(i) of Cenvat Credit Rules, 2004 - reversal of proportionate amount of Cenvat Credit in terms of Rule 6(3A) of CCR, 2004 or paying 5%/6% of the value of exempted services? - HELD THAT - It is not in dispute that before the first appellate authority or the lower authority, the appellant has not produced evidence of having reversed proportionate amount of Cenvat Credit. The appellant has now produced a Chartered Accountant s Certificate along with annexure which indicates the total turnovers as well as exempted turnover and the proportionate amount of Cenvat Credit to be reversed. After deducting the amount already reversed, they said to have paid differential amount just five days ago through challan dated 02.05.2019 along with interest - Subject to verification of this information by the lower authorities, the appellant is entitled to reverse proportionate amount of Cenvat Credit and need not pay amount equal to 5%/6% of value of exempted services rendered. CENVAT credit - input services - manpower supply services - denial of credit on the ground that there is no evidence that the invoices pertain to the services provided in their Visakhapatnam unit - HELD THAT - The only point of dispute is that invoices were raised in the address of the appellant s Hyderabad office and they did not indicate that they pertain to the services rendered in Visakhapatnam. However, now that appellant has produced a letter from manpower supplier that the services in respect of the disputed invoices were rendered in Visakhapatnam and billed in address of their Hyderabad office - The appellant is entitled to Cenvat Credit, subject to verification. Appeal allowed by way of remand.

Summary

Issues involved:
1. Whether the appellant is entitled to reverse proportionate amount of Cenvat Credit under Rule 6(3A) of CCR, 2004 instead of paying 5%/6% of the value of exempted services and if they have provided evidence of such reversal.
2. Whether the appellant can avail Cenvat Credit on input service invoices raised in the name of their head office, even if the services were utilized in a different unit.

Analysis:

Issue 1: The appellant contended that they have reversed the proportionate Cenvat Credit under Rule 6(3A) for exempted services and paid the differential amount along with interest. The departmental representative argued that there was no evidence of such reversal. The tribunal found that the appellant had produced a Chartered Accountant's Certificate and detailed calculations showing the reversal of Cenvat Credit and payment made through challan. After considering this new evidence, the tribunal held that the appellant is entitled to reverse the Cenvat Credit proportionately and need not pay 5%/6% of the value of exempted services. The matter was remanded to the original authority for verification.

Issue 2: Regarding the second issue of availing Cenvat Credit on input service invoices raised in the name of the appellant's head office, the tribunal noted that the appellant provided a letter from the service provider confirming that the services were utilized in the Visakhapatnam unit despite the invoices being addressed to the Hyderabad office. Based on this clarification, the tribunal held that the appellant is entitled to the Cenvat Credit. The demand, along with interest and penalties, was deemed unsustainable and set aside. However, due to the absence of certain details before the original authority, the matter was remanded for verification purposes.

In conclusion, the tribunal disposed of the appeal by remanding the matter to the original authority for verification of the reversal of Cenvat Credit and the validity of availing Cenvat Credit on input service invoices.