2016 (1) TMI 299 - AT - Service Tax

Cenvat Credit - duty paying document / invoice were issued to the non registered unit - supply of goods ( natural gas) through pipeline to local consumers and others - appellant had obtained Centralised Registration on 25.2.2010 which included Vaghodia compressor station - Held that - Decisions of this Tribunal in Manipal Advertising Services Pvt. Ltd. Vs. C.C.E.,Mangalore - 2009 (10) TMI 434 - CESTAT, BANGALORE and Well Known Polyesters Ltd. Vs. C.C.E., Vapi - 2011 (1) TMI 664 - CESTAT, AHMEDABAD , have clearly declared the principle that if a person is discharging service tax liability from his registered premises, the benefit of cenvat credit on the service tax paid by the service provider cannot be denied, only on the ground that the invoices are in the name of branch offices which were not separately registered. - Benefit of credit allowed - Decided in favor ofassessee.

Summary

Issues: Denial of cenvat credit on input services; Entitlement to cenvat credit on service tax paid from registered premises

In this case, the appellant, an instrumentality of the Union, was involved in the supply of natural gas to consumers. The issue revolved around the denial of cenvat credit amounting to Rs. 1,30,494/- by the Commissioner, Central Excise & Service Tax, LTU, New Delhi, for the period from 1.10.09 to 24.2.10. The denial was based on the grounds that the appellant had availed cenvat credit on input services prior to 25.2.2010, which was before obtaining Centralised Registration. The appellant's conveyance of gas through various stations and the process of compression and conversion into LPG were scrutinized during the audit. The impugned order directed the recovery of the denied cenvat credit along with interest under Rule 14 of Cenvat Credit Rules, 2004, and Section 75 of the Finance Act, 1994, but dropped the penalty.

The crux of the matter lay in whether the appellant was entitled to avail cenvat credit on the input service for which service tax was remitted based on invoices issued by its Vaghodia compressor unit. The Tribunal referred to previous judgments in Manipal Advertising Services Pvt. Ltd. Vs. C.C.E., Mangalore and Well Known Polyesters Ltd. Vs. C.C.E., Vapi, which established that if a person is discharging service tax liability from registered premises, the benefit of cenvat credit on the service tax paid by the service provider cannot be denied solely on the ground that the invoices are in the name of branch offices not separately registered. As a result, the Tribunal found the impugned order unsustainable and quashed it, ruling in favor of the appellant. The appeal was successful, and no costs were awarded.