2023 (5) TMI 1131 - AT - Service Tax

Refund claim - rejection on account of certain invoices not being submitted within the limitation period of one year in terms of Section 11B of the Central Excise Act, 1944 - rejection also on the ground of availment of CENVAT Credit on account of non-registration of premises as well as availing CENVAT Credit on certain invoices even before payment of Service Tax. Non-registration of premises - Whether the respondent herein is eligible to avail the CENVAT Credit on inputs / input services without registration of its premises? - HELD THAT - The Hon'ble Madras High Court in the case of COMMISSIONER OF SERVICE TAX-III, C has held that in the absence of any statutory provision prescribing registration of premises as mandatory for availing input service tax credit, the assessee could not be denied refund of unutilized CENVAT Credit on input services. The Hon'ble Karnataka High Court in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (9) TMI 450 - KARNATAKA HIGH COURT has held that Registration not compulsory for refund. The denial of CENVAT Credit for non-registration of premises is not justified in the facts of these appeals. Availment of credit which is not due during the quarter - Whether the respondent-assessee can avail CENVAT Credit on inputs or input services before payment of tax thereon and also before the date of invoice? - HELD THAT - The respondent had availed CENVAT Credit to the tune of Rs.18,169/- prior to the date of payment of tax, i.e., the CENVAT Credit was availed for the refund claimed from April 2013 to June 2013 when the Service Tax was paid on 04.07.2013. The respondent has admitted that it is a procedural lapse, but their substantive right cannot be taken away when there is no dispute as to the eligibility of CENVAT Credit of Service Tax paid and when conditions like payment of tax and receipt of service have been found to be satisfied. Reliance is placed by the Learned Advocate for the respondent on the decision rendered in the case of COMMISSIONER OF CENTRAL EXCISE, SURAT-II VERSUS WHITE EN-ALL PVT. LTD. 2003 (10) TMI 533 - CESTAT, MUMBAI wherein it was held that It is not in dispute that, the goods are duty paid, they have used in the manufacture of finished goods, and the only lapse on the part of the respondents is that instead of taking credit on 8-4-1994 the credit was taken on 6-4-1994. It is nobody s case that, had the credit been taken on 8-4-1994, the same could be held as inadmissible. It is also not brought on record that this credit was utilised before 8-4-1994. Therefore on considering the facts and circumstances of this case, I hold that the credit could not be denied and for this lapse there is no case for imposing penalty. Reliance placed in the case of M/S INDIA CEMENT LTD., VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, TIRUPATI 2018 (5) TMI 603 - CESTAT HYDERABAD where CENVAT Credit was denied on the ground that the appellant therein had availed the credit before the payment of Service Tax and it was held that in the absence of any dispute that the appellant has discharged the tax liability as per the provisions of the Service Tax Rules and there being no dispute as to the eligibility to avail CENVAT Credit, availing CENVAT Credit before few days in advance is only a procedural lapse; credit cannot be denied on this basis. The order passed by the Commissioner (Appeals) does not call for any interference - Appeal filed by the Department are dismissed as not maintainable.

Summary

Issues Involved:
1. Eligibility to avail CENVAT Credit without registration of premises.
2. Availment of CENVAT Credit on inputs or input services before payment of tax.

Summary:

1. Eligibility to Avail CENVAT Credit Without Registration of Premises:
The respondent, M/s. Ad2Pro Global Creative Solutions Pvt. Ltd., formerly known as M/s. Ad2pro Media Solutions Pvt. Ltd., filed refund claims under Rule 5 of the CENVAT Credit Rules, 2004. The Assistant Commissioner of Service Tax partially rejected these claims due to non-registration of premises. The Commissioner (Appeals) allowed the appeals, stating that the date of receipt of payment in convertible foreign exchange is the 'relevant date' under Section 11B of the Central Excise Act, 1944. The Department contended that registration is a prerequisite for availing CENVAT Credit. However, the Tribunal referenced multiple judgments, including the Hon'ble Madras High Court in Commissioner of Service Tax-III, Chennai v. CESTAT, Chennai & Scionspire Consulting Services (India) Pvt. Ltd. [2017 (3) G.S.T.L. 45 (Mad.)], which held that absence of registration does not justify denial of CENVAT Credit. Consequently, the Tribunal upheld the Commissioner (Appeals)' decision, dismissing the Department's appeal on this issue.

2. Availment of CENVAT Credit on Inputs or Input Services Before Payment of Tax:
The respondent admitted to availing CENVAT Credit of Rs.18,169/- prior to the payment of tax, considering it a procedural lapse. The Department argued that credit should be taken only after tax payment, as per Rule 4(7) of the CENVAT Credit Rules, 2004. The Tribunal noted that the substantive right to CENVAT Credit cannot be denied if conditions like payment of tax and receipt of service are satisfied. Citing cases such as Commissioner of Central Excise, Surat-II v. White En-All Pvt. Ltd. [2004 (175) E.L.T. 119 (Tri. - Mumbai)], the Tribunal concluded that premature availment of credit is a procedural lapse and does not invalidate the substantive right to credit. Thus, the Tribunal dismissed the Department's appeal on this issue as well.

Conclusion:
The Tribunal found no merit in the Department's appeals on both issues and upheld the Commissioner (Appeals)' decision. The three appeals filed by the Department were dismissed as not maintainable.