2015 (9) TMI 620 - AT - Central Excise

Denial of CENVAT Credit - whether the Appellant is eligible to take CENVAT Credit on the ISD invoices issued by Head office situated in Mumbai - services of Professional Fees & Brokerage for sale of Land is not in relation to manufacturing activity and is not eligible for CENVAT Credit - Held that - Bench in the case of Cadmac Machinery Co. (P) Ltd Vs CCE Ahmedabad (2011 (8) TMI 709 - CESTAT AHMEDABAD) has held that the services regarding valuation of property have to be considered as an activity relatable to the business of the Appellant and accordingly eligible for CENVAT Credit under Rule 2(l) of CENVAT Credit Rules 2004. While deciding the issue, this Bench has relied upon the case of Commissioner Vs Ultratech Cement Ltd 2010 (10) TMI 13 - BOMBAY HIGH COURT and also a case law of Commissioner Vs ABB Ltd 2011 (3) TMI 248 - KARNATAKA HIGH COURT decided by Hon ble Karnataka High Court. As the period involved in the present proceedings is also prior to 01.04.2011, therefore, it has to be held that the services availed in relation to Professional Fees & Brokerage for sale of Land belonging to Appellant are eligible to CENVAT Credit. This Bench has not gone into the jurisdictional issue and time barred aspect of the appeal as on merit, CENVAT Credit has been held to be admissible to the Appellant. - Decided in favour of assessee.

Summary

Issues involved: Eligibility of CENVAT Credit on ISD invoices issued by Head Office; Qualification of services for CENVAT Credit under Rule 2(l) of CENVAT Credit Rules 2004; Time-barred aspect of the appeal.

Analysis:

1. Eligibility of CENVAT Credit on ISD invoices issued by Head Office:
The appeal was filed against the order upholding the denial of CENVAT Credit by the First Appellate Authority. The Appellant argued that the credit was taken based on valid ISD invoices from the Head Office in Mumbai, meeting all prescribed details. The Appellant contended that the jurisdictional issue arises as the Central Excise officers in Gujarat have no authority to question ISD invoices issued by the Head Office in Mumbai. The Appellant's representative relied on the case law of CCE Vs Godfrey Philips India Ltd to support their argument. It was emphasized that the Headquarter of the Appellant complies with the necessary rules and undergoes periodic audits by Central Excise officers.

2. Qualification of services for CENVAT Credit under Rule 2(l) of CENVAT Credit Rules 2004:
The Appellant's case revolved around certain services availed by the Head Office concerning land transactions in Andhra Pradesh and Uttar Pradesh, conducted in the name of another entity. The Appellant argued that these activities were related to their business and should qualify as input services under Rule 2(l) of CENVAT Credit Rules 2004. The Appellant highlighted that the relevant period was before the amendment to Rule 2(l) in 2011, citing the Cadmac Machinery Co. (P) Ltd case where similar activities were deemed eligible for CENVAT Credit. The Appellant also contended that the demand was time-barred, as all necessary details were available to the Department during the relevant period.

3. Time-barred aspect of the appeal:
The Appellant further argued that the entire demand should be considered time-barred, as the Department had access to all relevant information from the Appellant's records. It was emphasized that during the period in question, services related to the Appellant's business were eligible for CENVAT Credit, citing the Larger Bench judgment of CESTAT Bangalore in the case of ABB Ltd.

In the final judgment, the Tribunal considered the eligibility of the Appellant for CENVAT Credit on ISD invoices issued by the Head Office. The Bench noted that the services in question, specifically Professional Fees & Brokerage for land transactions, were deemed eligible for CENVAT Credit under Rule 2(l) of CENVAT Credit Rules 2004 during the relevant period. The Tribunal relied on previous case laws to support this decision, emphasizing that the activities related to business should qualify for credit. As the period in question predated the amendment to Rule 2(l), the Tribunal allowed the appeal, concluding that the Appellant was entitled to the CENVAT Credit. The jurisdictional issue and time-barred aspect were not addressed, as the merit of the CENVAT Credit was deemed admissible to the Appellant.