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2024 (1) TMI 936 - AT - Service TaxCENVAT Credit - inputs, capital goods and input services received at places other than their registered premises - demand of interest and penalty - HELD THAT - There is no dispute in this case regarding procurement of such goods and services on payment of appropriate excise duty/services. Also there is no dispute regarding utilisation of such goods/services either directly or indirect by the Appellant to provide output service (telecommunication service). The credit has been held as irregular only on the ground that such inputs, capital goods and input services on which Cenvat credit has been availed were received at places other than their registered premises. The issue has been settled in favour of the Appellant in the case of M/S. ORIENTAL INSURANCE COMPANY LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LTU, NEW DELHI 2023 (6) TMI 646 - CESTAT NEW DELHI wherein it has been held that registration of premises with service tax department is not a condition precedent for claiming CENVAT credit. Demand of Interest - HELD THAT - The CENVAT credit availed and utilized by the Appellant on the inputs, capital goods and input services received in the premises other than the registered premises cannot be denied as long as the said inputs, capital goods and input services are utilized in providing the output services. As there is no dispute regarding the utilization of the said inputs, capital goods and input services in providing output services in this case, we hold that the impugned order denying the credit is not sustainable. Since the demand of irregular credit is not sustainable, no question of demanding interest. Penalty - HELD THAT - There is no evidence brought on record by the department to substantiate the allegation of wilful misstatement or suppression of any facts. Accordingly, the extended period not invocable in this case. For the same reason penalty imposed under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994, is also not sustainable. The impugned order set aside - appeal allowed.
Issues involved:
The judgment addresses the irregular availment of CENVAT credit on inputs, capital goods, and input services received at places other than the registered premises of the Appellant. The issues include the applicability of CENVAT Credit Rules, 2004 to registered assesses, the requirement of registration of premises for claiming CENVAT credit, and the eligibility of credit when goods and services are received at unregistered premises. Details of the Judgment: Issue 1: Applicability of CENVAT Credit Rules, 2004 The Appellant had availed CENVAT credit on goods received at unregistered premises, leading to a demand for irregular credit. The Commissioner held the credit irregular as the rules apply only to registered premises. However, the Appellant argued citing precedents that registration with the service tax department is not mandatory for claiming CENVAT credit. Issue 2: Eligibility of CENVAT Credit The Appellant contended that they utilized the disputed inputs, capital goods, and input services for providing telecommunication services. They highlighted that there was no dispute regarding the procurement of goods/services with appropriate duties paid or their utilization for output services. The Tribunal held that denial of credit solely based on the location of receipt was not justified, following precedents that emphasized the utilization of goods/services for output services. Issue 3: Allegation of Misstatement and Suppression The Appellant argued that there was no evidence of willful misstatement or suppression of facts, and the Show Cause Notice (SCN) was time-barred for a certain period. They asserted that without intent to evade tax, penalties should not be imposed. The Tribunal concurred, stating that the extended period was not applicable without evidence of willful misstatement or suppression. Conclusion: Based on the precedents and the lack of evidence supporting irregularities, the Tribunal set aside the impugned order, allowing the appeal filed by the Appellant. The judgment emphasized that the registration of premises with the service tax department is not a prerequisite for claiming CENVAT credit, as long as the goods and services are utilized for providing output services. Therefore, the denial of credit based on the location of receipt was deemed unsustainable, and penalties were not justified in the absence of willful misstatement or suppression.
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