2019 (7) TMI 1408 - AT - Central Excise

CENVAT Credit - Input Service Distribution - invoices were addressed to their head office at Hadapsar, Pune, but credit was availed at their Nasik unit - period 2013-2014 - HELD THAT - The Appellant had instructed the service provider to render the service at their factory at Nasik and also raise bills at their Nasik address. The description of service mentioned in the purchase orders tallies with the services rendered by the service provider as mentioned in the respective invoices addressed to their head office. In these circumstances, there cannot be any doubt that these services had been received at their Nasik unit and utilised in the manufacture of their excisable goods - the Appellants are eligible to avail the credit on the respective input service invoices as the services were used in or in relation to use of the finished goods at Nasik unit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Admissibility of CENVAT Credit on input services addressed to head office but utilized at a different unit.

Analysis:
The appeal was filed against an Order-in-Appeal by the Commissioner (Appeals) regarding the admissibility of CENVAT Credit on input services availed by the Appellants at their Nasik unit, even though the invoices were addressed to their head office in Pune. The Appellants, engaged in manufacturing rail bogies/wagons, claimed that the services were exclusively for their Nasik unit's production. The Appellants argued that despite the invoices being addressed to the head office, the services were utilized at the Nasik unit for manufacturing specialized units like rope roller units (RRUs) and railway bogies. The Appellants contended that the credit should be admissible based on specific purchase orders and utilization of services at the Nasik unit.

The Appellants referred to various judgments to support their argument, emphasizing that the mere addressing of invoices to the head office should not deny the credit. The Revenue, represented by the learned A.R., reiterated the findings of the Commissioner (Appeals). After considering the submissions and records, the Tribunal observed that the Appellants had indeed instructed the service provider to render services at the Nasik unit and raise bills accordingly. The Tribunal noted that the services described in the purchase orders aligned with those rendered at the Nasik unit, as reflected in the invoices addressed to the head office. Consequently, the Tribunal concluded that the services were received and utilized at the Nasik unit for manufacturing excisable goods, making the Appellants eligible for the credit.

In light of the above analysis, the Tribunal set aside the impugned order and allowed the appeal, emphasizing that the services were used in or in relation to the production of finished goods at the Nasik unit. The decision highlighted the importance of the actual utilization of services at the specific unit for determining the admissibility of CENVAT Credit, irrespective of the invoicing details.