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2020 (1) TMI 367 - AT - Central ExciseCENVAT credit - input services - labour service - denial on the ground that the service provider is registered for service namely, private security agency service - denial also on the ground of nexus - HELD THAT - As regard the reason for denial of credit that the service provider is registered under private security agency service and the invoice for the service was raised under the head of labour service, there is no dispute that whatever service was mentioned in the invoice was received by the appellant and the same was used in their manufacture, with these facts credit cannot be denied. As regard the classification it is the subject matter of the service provider. The classification cannot be disputed in the hands of the recipient of the service as has been held in the case of M/S. NEWLIGHT HOTELS RESORTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE ST., VADODARA 2014 (11) TMI 209 - CESTAT AHMEDABAD , therefore, for this reason the cenvat credit cannot be denied. Scope of SCN - discrepancies pointed out in the service invoice issued by the service provider as regard incorrect address - HELD THAT - Firstly there is no charge in the Show Cause Notice regarding the said discrepancy, therefore, the adjudicating authority cannot go beyond the scope of Show Cause Notice as the appellant was never put to notice about the new issue raised in the adjudication order. Secondly, it was not disputed by the department that the service was received by the appellant and used in the manufacture however, even if, there is any error in mentioning the address so long the service is received by the appellant, credit cannot be denied. Appeal allowed - decided in favor of appellant.
Issues:
1. Denial of cenvat credit for input service - labour service due to service provider's registration under a different category. 2. Discrepancies in the address mentioned on the service provider's invoices affecting credit denial. Analysis: Issue 1: The appellant faced denial of cenvat credit for labour service due to the service provider being registered under private security agency service. The Adjudicating Authority dropped the charge of non-use in or in relation to manufacturing but denied credit based on the service provider's registration. The Commissioner (Appeals) upheld this decision, leading to the present appeal. The appellant argued that the labour service was indeed used in manufacturing the final product, emphasizing that the service recipient has no control over the service provider's classification errors. Citing the Tribunal Judgment in Newlight Hotels & Resorts Ltd., it was contended that the appellant should not suffer due to the service provider's misclassification. The Tribunal found that since the service mentioned in the invoice was received and used in manufacturing, credit could not be denied based on the service provider's registration. Issue 2: The Revenue also highlighted discrepancies in the address on the service provider's invoices as a reason for credit denial. However, the Tribunal noted that the Show Cause Notice did not include this discrepancy as a charge, preventing the adjudicating authority from introducing new issues without prior notice to the appellant. Moreover, it was undisputed that the service was received and utilized in manufacturing. Even if there were errors in the address details, as long as the service was received, credit denial was unwarranted. In conclusion, the Tribunal set aside the impugned order, allowing the appeal and emphasizing that credit cannot be denied based on the service provider's registration or minor discrepancies in invoice details when the service was actually received and utilized in manufacturing.
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