2019 (6) TMI 325 - AT - Service Tax

CENVAT Credit - duty paying documents - denial on the ground that the invoices were in the name of their call centre whereas the same should have been in the address of the head office, which is the registered premises with the Service Tax department - HELD THAT - Inasmuch as the orders were being placed from the call centre, all the invoices of the service providers were issued by them at the address of the call centre. All the activities are undertaken at their call centre from Sector 58 and the output services are also being provided from the said premises - We also find favour with the assessee s contention that inasmuch as output services were being provided from Sector 58 Call Centre and the services were being received at the said premises, the invoices showing the address of sector 58 i.e. the place of actual receipt of the inputs services and their consumption for providing output services, is appropriate. CENVAT credit - denial on the ground that some of the invoices were not even in the name of the assessee, though the address in the invoices matches with the address of the assessee - HELD THAT - The invoices in question were issued by the input suppliers under the name of the previous companies, as the orders were placed prior to the date of merger, which could not be intimated and changed in the name of the freshly situated merged company. This is only for a limited period and thereafter all the invoices were issued in the name of the present appellant - The invoices under dispute and issued in the name of the erstwhile name of the company, related to the input services which were actually received by the appellant at their call centre premises and were used for output services. The denial of the credit on the said ground is not justified. CENVAT credit - denied on the ground that the same was availed prior to the registration - HELD THAT - The credit availed prior to the actual date of registration for providing output services has been held to be admissible inasmuch as there is no requirement in the Cenvat Credit Rules by an assessee to be registered for availing credit - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Dispute over Cenvat credit availed by the appellant during 2011-2014.
2. Denial of credit due to invoices being in the name of call center instead of head office.
3. Denial of credit for invoices not in the name of the appellant.
4. Denial of credit for availing Cenvat credit prior to registration.

Analysis:

Issue 1: Dispute over Cenvat Credit
The appellant, engaged in providing call center services, availed Cenvat credit of around ?20.22 Crores during 2011-2014. The dispute arose from a show cause notice proposing denial of credit on various grounds. The Commissioner confirmed the demands and imposed penalties, leading to the present appeal.

Issue 2: Denial of Credit due to Invoices
Around ?18.35 Crores of credit was denied to the appellant because the invoices were in the name of the call center instead of the registered head office. The appellant argued that all activities and services were provided from the call center premises, making the invoices valid. The Tribunal noted the absence of any legal requirement for invoices to be in the name of the head office, citing relevant case laws.

Issue 3: Denial of Credit for Invoices not in Appellant's Name
A part of the demand, approximately ?89.00 Lakhs, was denied as some invoices were not in the appellant's name. The appellant clarified that the invoices were issued during a transitional period of company name change and merger, which the Revenue did not dispute. The Tribunal held that denial of credit on this ground was unjustified, supported by previous Tribunal decisions.

Issue 4: Denial of Credit for Availing Cenvat Credit Prior to Registration
Cenvat credit of ?98.00 Lakhs was denied for being availed before registration. The Tribunal cited legal precedents and the Hon'ble Karnataka High Court's judgment to support the admissibility of credit even before registration for providing output services. The impugned order was set aside on this ground as well.

In conclusion, the Tribunal set aside the impugned order confirming demands and imposing penalties, allowing the appeal with consequential relief to the appellant. The judgment highlighted the importance of substance over procedural lapses in determining the eligibility of Cenvat credit, emphasizing the need for a nexus between input and output services for credit availment.