2017 (5) TMI 134 - AT - Central Excise

CENVAT credit - duty paying invoices - denial on the ground that the appellant is not eligible to avail CENVAT credit on the strength of invoices raised on sales office and not on manufacturing unit - Held that - the appellants are entitled to avail CENVAT credit on the input services availed at the Branch Office - reliance placed in the case of Manipal Advertising Services Pvt. Ltd. vs. CCE 2009 (10) TMI 434 - CESTAT, BANGALORE - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility to avail CENVAT credit based on invoices issued to sales offices
- Time limitation for invoking demand
- Interpretation of Rule 3 and Rule 9(2) of CENVAT Credit Rules, 2004
- Dispute regarding input services utilized at branch offices
- Wide interpretation of input services definition
- Applicability of various decisions on CENVAT credit

Eligibility to avail CENVAT credit based on invoices issued to sales offices:
The appellant, a manufacturer of excisable goods, appealed against the rejection of CENVAT credit by the Commissioner (A) due to invoices being raised on sales offices and not the manufacturing unit. The appellant argued that whether credit is based on invoices to the appellant or sales offices, the essence remains the same. The Tribunal found in favor of the appellant, citing previous decisions and emphasizing that if service tax liability is discharged from registered premises, credit cannot be denied solely based on the invoice recipient. The Tribunal highlighted that the input services used at branch offices were directly related to the business, falling under the wide definition of input services.

Time limitation for invoking demand:
The appellant contended that the demand was time-barred as they regularly disclosed information in returns. The Tribunal did not delve into this aspect as the appeal was allowed on other grounds.

Interpretation of Rule 3 and Rule 9(2) of CENVAT Credit Rules, 2004:
The appellant argued that they satisfied the requirements of Rule 3 and Rule 9(2) of CENVAT Credit Rules, 2004, allowing CENVAT credit on input services. The Tribunal agreed, stating that the appellant met the criteria and could not be denied credit based on the recipient of the invoices.

Dispute regarding input services utilized at branch offices:
The Department did not dispute the receipt and utilization of input services at branch offices for manufacturing dutiable final products. The Tribunal noted that the show-cause notice lacked discussion on input services and only focused on the invoicing issue, which was deemed incorrect.

Wide interpretation of input services definition:
The Tribunal emphasized the broad interpretation of input services, encompassing various services directly or indirectly related to the business operations. Citing legal precedents, the Tribunal highlighted that services such as event management, consultancy, security, and communication fell within the definition of input services, supporting the appellant's claim for credit.

Applicability of various decisions on CENVAT credit:
The Tribunal extensively referred to previous decisions supporting the appellant's entitlement to CENVAT credit on input services used at branch offices, reinforcing the appellant's position and ultimately allowing the appeal.