2016 (12) TMI 798 - AT - Service Tax

Levy of Interest on reversal of CENVAT credit - online information and data base access or retrieval service - Cenvat Credit in respect of input services received by them at the various branch offices denied - Held that - It is not disputed that the assessee has availed Cenvat Credit in respect of input services received by the head office as well as by the branch offices situated in different places. It is also not disputed that the Cenvat credit has been used to discharge service tax liability pertaining to all the above offices. In the impugned order the learned Commissioner (Appeals) has held that the lapse on the part of the assessee is of technical nature, not affecting the Revenue in as much as due service tax stands discharged by the assessee. Accordingly, he has absolved the assessee from any contravention of the provisions of the Finance Act, 1944. We are in agreement with the views expressed in the Impugned Order and find no reasons to interfere with the same - the impugned order is upheld and Revenue s appeal is rejected - decided against Revenue-appellant.

Summary

Issues Involved:
- Eligibility of Cenvat Credit for input services received at branch offices
- Liability of interest for wrongly availed Cenvat Credit

Eligibility of Cenvat Credit for input services received at branch offices:
The appeal filed by Revenue challenged an Order-In-Appeal regarding the eligibility of the assessee to avail Cenvat Credit for input services received at branch offices. The assessee, providing online information and database access services, had obtained registration for service tax payment for their head office but also had branch offices across India. The Revenue contended that the assessee should not be eligible to avail Cenvat Credit for input services received at the branch offices. However, both the Commissioner (Appeals) and the Tribunal found that the assessee had indeed availed Cenvat Credit for input services received at both the head office and branch offices, and this credit was utilized to discharge the service tax liability for all offices. The Tribunal upheld the Commissioner's decision, stating that the lapse was technical in nature and did not impact the revenue since the service tax was duly discharged by the assessee.

Liability of interest for wrongly availed Cenvat Credit:
The Revenue also raised the issue of the assessee's liability to pay interest for wrongly availed Cenvat Credit used for service tax payment. However, the Tribunal, after considering the arguments presented, concurred with the Commissioner (Appeals)'s decision that there was no contravention of the provisions of the Finance Act, 1944. The Tribunal found no reason to interfere with the Commissioner's ruling, as the service tax had been discharged by the assessee despite the technical lapse in availing Cenvat Credit for input services at branch offices. Consequently, the Tribunal rejected the Revenue's appeal, upholding the impugned order.

In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the decision of the Commissioner (Appeals) regarding the eligibility of Cenvat Credit for input services received at branch offices and the absence of liability for interest on wrongly availed Cenvat Credit.