2022 (10) TMI 322 - AT - Service Tax

Reversal of CENVAT Credit - no centralised registration - contravention of Rule 4 of the CENVAT Credit Rules 2004 without specific mention of which sub-Rule of Rule 4 - HELD THAT - Facts of the case therein and the present one are almost identical since in MANIPAL ADVERTISING SERVICES PVT. LTD. VERSUS CCE. MANGALORE 2009 (10) TMI 434 - CESTAT BANGALORE . Also documents in the name of Appellant therein were addressed to its other premises located at Bangalore New Delhi and Chennai Office which was held to have contravened provision of Rule 9 of the CENVAT Credit Rules 2004. It was held in that decision that in the event of centralised billing and centralised accounting system when one registration is permissible under Section 4(2) discharging Service Tax liability from the registered premises would not disentitled the benefits of CENVAT Credit on the Service Tax paid by the service provider if invoices are raised in the name of Branch offices even if the said Branch offices are unregistered one since Service Tax liability has been discharged by the main office also for service provided by the Branches. Further when Service Tax has been paid from the main office for the input services received by the branch office it was held that the ratio of the decision of this Tribunal in the case of STADMED PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE ALLAHABAD 1997 (6) TMI 224 - CEGAT CALCUTTA and GUJARAT HEAVY CHEMICALS LTD. VERSUS COMMISSIONER OF C. EX. RAJKOT 2005 (6) TMI 177 - CESTAT MUMBAI though delivered in respect of MODVAT Credit on Central Excise duty would also be applicable to the case in hand. The order passed by the Commissioner (Appeals) to the extent of denial of CENVAT Credits to the Appellant for input services availed by branch office at Delhi is hereby set aside - Appeal allowed.

Summary

Issues: Denial of CENVAT Credit to law firm for unregistered Delhi office

Analysis:
1. Facts of the Case: The law firm was paying Service Tax from its Mumbai head office for both Mumbai and Delhi branches without centralized registration. The Department issued a show-cause notice for reversal of CENVAT Credit of Rs.21,91,454/- availed for the unregistered Delhi office, leading to confirmation of Service Tax, interest, and penalty by the Commissioner (Appeals).

2. Legal Arguments by Appellant: The Appellant argued that the show-cause notice lacked specificity on the violation under Rule 4 of the CENVAT Credit Rules, 2004. They contended that despite a technical mistake of non-inclusion of the Delhi premises in the registration certificate, the Service Tax was paid on input services used for taxable services, citing case laws to support their centralized accounting system for availing CENVAT Credits on invoices addressed to other premises.

3. Respondent's Argument: The Department supported the Commissioner (Appeals)'s decision, emphasizing the requirement of Service Tax registration within 30 days of business commencement under Section 69(1) of the Finance Act, 1994 read with Rule 4 of the Service Tax Rules, 1994.

4. Judicial Analysis: The Member (Judicial) referred to a similar case law and held that in cases of central billing and accounting systems, discharging Service Tax liability from the registered premises does not disentitle the benefits of CENVAT Credit on Service Tax paid for services provided by unregistered branches. The Tribunal relied on previous decisions to support the Appellant's position, emphasizing consistency and predictability in findings.

5. Final Order: The Tribunal allowed the appeal, setting aside the denial of CENVAT Credits to the Appellant for input services availed by the unregistered Delhi branch office, providing consequential relief to the Appellant.

6. Conclusion: The judgment highlights the importance of a centralized accounting system in availing CENVAT Credits for services provided by unregistered branches, emphasizing the discharge of Service Tax liability by the main office as sufficient grounds for claiming such credits. The decision ensures consistency with previous rulings and upholds the Appellant's right to CENVAT Credits despite technical registration discrepancies.