2016 (6) TMI 229 - AT - Central Excise

Cenvat credit on various input services - registration number of service provider not indicated in the invoices - input services do not qualify as input services and are not related to manufacturing process - invoices issued by the service provider are in the name of the Head Office and not the factory where the credit is availed. Held that - the various input services involved in the present case are related to the business of the appellant. As far as Custom House Agent Services are concerned, it is found that these services are used for export of finished goods and therefore they qualify as input service and the service tax paid on CHA services are eligible as Cenvat credit as held in CCE, Mysore Vs. Chamundi Textiles Ltd. 2010 (4) TMI 450 - CESTAT, BANGALORE and CCE, Rajkot Vs. Rolex Rings Pvt. Ltd. 2008 (2) TMI 770 - CESTAT, AHMEDABAD . In view of the various judgments and circular issued by the CBEC dated 20.10.2014, mere non-mentioning of the registration number of the service provider on invoices is not fatal to the case of the appellant as it is only a procedural violation and substantive rights cannot be denied on mere procedural violations. I also hold that the appellant cannot be denied the cenvat credit with regard to the service tax paid on the invoices issued to the Head Office rather than the factory which has actually utilized the services so long as the inputs services are received and utilized by the appellant. This at best can only be termed as procedural violation which is not fatal to the right of the appellant. Therefore keeping in view the submissions made by both the parties and the law cited at bar, I am of the considered opinion that the impugned order is not sustainable in law and the same is set aside. - Decided in favour of appellant with consequential relief

Summary

Issues:
Denial of cenvat credit on various input services claimed by the appellant.

Analysis:
The appellants filed seven appeals against the common impugned order passed by the Commissioner (Appeals) denying cenvat credit on input services. The appellant, engaged in manufacturing pharmaceutical products, used various input services during export activities. The Commissioner found inadmissible cenvat credit on certain services like custom clearance, courier charges, and others. The appellant contended that denial based on technical lapses was unjust as pre-2007, service provider registration numbers were not mandatory on invoices. The appellant argued that the disputed services qualified as input services under Rule 2(l) and were upheld as such by various Courts and Tribunals.

Analysis Continues:
The AR reiterated the Commissioner's findings, stating that services like Rent-a-Cab, Courier, and others were not directly related to manufacturing and thus ineligible for cenvat credit. The AR also argued that the Head Office must be registered as an input service distributor for credit distribution, which the appellant failed to comply with. The Tribunal analyzed the definition of "input services" under Rule 2(1) of Cenvat Credit Rules 2004, emphasizing services related to business activities qualify as input services. The Tribunal found the disputed services directly related to the appellant's business. It held that procedural violations like non-mentioning of registration numbers on invoices do not invalidate cenvat credit eligibility. The Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing all appeals with consequential relief.

Conclusion:
The Tribunal's decision favored the appellant, emphasizing that the disputed services qualified as input services under the Cenvat Credit Rules. Procedural lapses like non-mentioning of registration numbers on invoices did not warrant denial of cenvat credit. The Tribunal's ruling set aside the Commissioner's decision, allowing all appeals of the appellant with any consequential relief.