2014 (9) TMI 182 - AT - Service Tax

Recovery of Cenvat Credit refunded under Rule 5 of CCR - export of services - input services - providing Management Consultancy Services - credit availed for the period when assessee was registered - Held that - There is no dispute that the earlier the appellant s Bombay branch had service tax registration and subsequently when the Delhi branch started operating, for some period there was no separate registration till the centralized registration was obtained in respect of Delhi branch. There is no dispute about the receipt of the services. The Tribunal in case of C. Metric Solution Pvt. Ltd. (2012 (7) TMI 379 - CESTAT, AHMEDABAD) has held that in clear terms that Cenvat Credit in respect of inputs/input services received by an output service provider during period prior his obtaining service tax registration is admissible and denial of Cenvat Credit on the ground that at the time of receipt of inputs/input services by a output service provider, there was no registration with the Central Excise, is not correct. - demand set aside - Decided in favor of assessee.

Summary

Issues:
Claim for cash refund of accumulated Cenvat Credit, Adjustment of interest on wrongly taken Cenvat Credit, Denial of Cenvat Credit due to lack of registration, Appeal against orders of Assistant Commissioner and Commissioner (Appeals).

Analysis:
The appellant, providing 'Management Consultancy Services' to overseas clients, filed claims for cash refund of accumulated Cenvat Credit for specific quarters. The Assistant Commissioner sanctioned partial refunds but ordered the adjustment of interest on wrongly taken Cenvat Credit against the refund claims. The appellant appealed to the Commissioner (Appeals) but the orders were dismissed, leading to further appeals.

During the hearing, the appellant's counsel argued that Cenvat Credit cannot be denied based on the lack of centralized registration at the time of service receipt. Citing relevant case laws, the counsel contended that Cenvat Credit for inputs/services received before obtaining service tax registration is admissible. On the other hand, the respondent's counsel defended the orders, emphasizing that registration is a prerequisite for claiming Cenvat Credit.

The Tribunal examined the dispute regarding the appellant's eligibility to claim Cenvat Credit during the period without registration. It was noted that the appellant's Bombay branch had registration, and the Delhi branch operated without separate registration until centralized registration was obtained. Referring to precedent cases, the Tribunal clarified that Cenvat Credit for services received before registration is permissible. Consequently, the interest charges on wrongly taken Cenvat Credit were set aside, modifying the impugned order accordingly. The appeals were disposed of in favor of the appellant.

In conclusion, the Tribunal's decision was based on the admissibility of Cenvat Credit for services received before registration, as established by relevant case law. The interest charges on the wrongly taken credit were deemed unjustified, leading to a modification of the impugned order in favor of the appellant.