2024 (10) TMI 616 - AT - Central Excise

Partial rejection of refund claims - Incorrect address mentioned in invoices - Invoice were in name of unregistered premises - Invoices pertain to service which do not have any nexus with the output service rendered by the Appellant. Denial of credit for the reason that invoices do not contain proper details such as address etc. - HELD THAT - The clarification issued by the Board is very categorical and clear and that refund claims could not have been denied or modified for the reasons that certain details are missing in the invoice. The only requirement this is to be fulfilled is that the service against which the appellant is claiming the input credit and subsequently refund under Rule 5 have been used for providing output services. Once that requirement is satisfied there are no reason as to why the CENVAT Credit on this account could have been denied - Since appellant have centralized registration at NOIDA, the input credit in respect of the services received at Pune and Chennai gets reflected in the common cenvat credit account maintained at NOIDA and in the ST-3 return filed in NOIDA. By taking the credit against the invoices addressed to their premises at Pune and Chennai appellant have not contravened any provision of the Cenvat Credit Rules, 2004 for which the said credit could have been denied. Refund claim denied/modified on the ground that invoices have been issued in unregistered premises - HELD THAT - The refunds could not have been modified/denied placing reliance on M/S RAAJ KHOSLA CO. PVT. LTD. VERSUS CST, DELHI 2008 (7) TMI 122 - CESTAT NEW DELHI where it was held that 'We find the registration certificate was subsequently amended included the address mentioned in the invoices with retrospective effect. In these circumstances, order whereby credit was disallowed on this ground is set aside and the appeal of the appellant in this regard are allowed.' Cenvat Credit has been sought to be denied on various services by the impugned order holding the services to be ineligible as input services in terms of Rule 2 (l) of the CENVAT Credit Rules, 2004 - HELD THAT - The impugned order does not specify the services in respect of which the credit is sought to be denied. Even in the said impugned order credit has been allowed in respect of all the services except for management, maintenance repair services and hospitality services. Establishment of nexus between the input services and output services - HELD THAT - It is a settled law that no nexus was required to be established after the amendment made in Rule 5 of CENVAT Credit Rules, 2004 in the year 2011. Only what was required while examining the refund claim under Rule 5 was that credit has been taken during the quarter for which the refund claim is prescribed - there are no justification for denial of CENVAT credit or the refund claim in respect of these input services. There are no merits in the impugned orders and the same are set aside. The matters in respect of the refund claim are remanded back to the original authority for redetermination of amounts to be refunded to the appellant in terms of rule 5 of CENVAT Credit Rules, 2004 by holding that the disputed credit is admissible. Appeal allowed by way of remand.

Summary

Issues Involved:

1. Denial of CENVAT Credit due to incorrect or incomplete details in invoices.
2. Denial of credit for services deemed ineligible or lacking nexus with output services.
3. Denial of refund claims based on the timing of service tax payment under reverse charge mechanism.
4. Denial of credit for invoices issued to unregistered premises or different addresses.
5. Demand for interest and imposition of penalties.

Issue-wise Detailed Analysis:

1. Denial of CENVAT Credit due to incorrect or incomplete details in invoices:

The tribunal addressed the issue of denial of credit due to incomplete invoices, emphasizing the Board's Circular No.120/01/2010-ST, which advises a liberal view on incomplete invoices. It was clarified that as long as the nature of the service, tax paid, and other required details are ascertainable, and the input service has a nexus with the exported service, the refund should be allowed. The tribunal found that the appellant met these requirements, and therefore, the denial of credit on this ground was unjustified.

2. Denial of credit for services deemed ineligible or lacking nexus with output services:

The tribunal reviewed the denial of credit for various services, such as management, maintenance, repair, hospitality, and others, which were considered ineligible. It was noted that after the 2011 amendment to Rule 5 of the CENVAT Credit Rules, no nexus between input and output services was required. The tribunal cited multiple precedents, including Cross Tab Marketing Services Pvt. Ltd. and Microsoft Global Services Center (I) Pvt. Ltd., affirming that the establishment of such a nexus is not necessary for refund claims under Rule 5. Thus, the tribunal found the denial of credit on these grounds to be without merit.

3. Denial of refund claims based on the timing of service tax payment under reverse charge mechanism:

The tribunal addressed the issue of denial of refund claims due to the timing of service tax payments under the reverse charge mechanism. It referenced the decision in WNS Global Services Pvt. Ltd., which held that service tax paid under reverse charge in the subsequent month of the quarter is permissible. The tribunal also cited Virtusa India Pvt. Ltd., which clarified that refund claims should not be linked to the period when CENVAT credit was taken. Consequently, the tribunal found the denial of refund on this basis to be unsustainable.

4. Denial of credit for invoices issued to unregistered premises or different addresses:

The tribunal examined the denial of credit for invoices issued to unregistered premises or different addresses. It was established that the appellant had centralized registration, allowing them to claim credit for services received at different locations. The tribunal referred to several decisions, including Ribbit Studios and ABM Knowledge Ltd., which supported the appellant's position. Therefore, the tribunal concluded that the denial of credit on this ground was unjustified.

5. Demand for interest and imposition of penalties:

The tribunal addressed the imposition of penalties and demand for interest, noting that the adjudicating authority had not imposed penalties in most proceedings. Given that the tribunal found no merit in the denial of CENVAT credit or refund claims, it also found no justification for the demand for interest and penalties. Consequently, these were set aside.

Conclusion:

The tribunal set aside the impugned orders, remanding the matters back to the original authority for redetermination of refund amounts under Rule 5 of the CENVAT Credit Rules, 2004, affirming the admissibility of the disputed credit. The original authority was directed to resolve the refund claims within 90 days, considering the age of the issue.